US finished vehicle carrier Allied Systems Holding has withdrawn its services for Chrysler and GM following a dispute over employee pay and haulage rate rises, leaving the carmakers to seek alternative means of distributing their vehicles from plants in Canada.
Facing strike action related to a proposed 20% wage cut it had proposed to staff to reduce costs, Allied backed off and instead tried to raise the haulage rates charged to the carmakers last week. Neither carmaker would comment on whether the reason behind the withdrawal of service was because this rate increase was rejected, Chrysler stating only that it had been informed by Allied that it was unable to provide the service, and GM adding simply that Allied had made the decision to discontinue its services for the company. “You will need to ask Allied about [the reason], this was their action,” said a Chrysler spokesperson.
Allied has not responded to calls on the subject, but Rick LaPorte, president of the Canadian Auto Workers (CAW) Local 444 chapter based in Windsor, Ontario, confirmed to Automotive Logistics News that it was indeed Chrysler and GM’s rejection of the proposed haulage rate increases that had prompted the withdrawal of service by Allied.
The OEMs rejected the increase as there is another year and a half left on the current contract,” said LaPorte.
He went on to say that Allied members were still being paid because the company did not want to lose the skill set of these drivers and the situation was “a day by day thing”. CAW Local 444 represents 160 Allied drivers in Windsor.
In the meantime, both carmakers are faced with the task of finding other means to move their vehicles.
“We are closely monitoring the situation and assessing our options to ensure continuity of vehicle supply to our dealers," said Chrysler in a statement.
A spokesperson added: "We have adequate days supply of inventory and will ensure our dealers have the vehicles to support their sales."
However, Chrysler is reported to be stocking minivans produced at its Windsor Assembly Plant at a number of storage yards throughout the city as numbers build up at the plant. There has been no affect on production so far.
GM said that it was “taking immediate steps to re-source the work previously performed by Allied,” and that “no production disruptions are expected as a result of the transition.”
GM is also reported to be storing vehicles in lots throughout Oshawa and Ingersoll.