GM General Motors Company

By Mike Colias 

Workers at a General Motors Co. sport-utility plant in Canada are threatening to strike unless a new labor deal is reached by Sunday night, jeopardizing the supply of GM's top-selling SUV model.

GM faces a 10:59 p.m. ET deadline to ink a tentative contract with Unifor Local 88, which represents about 2,450 workers at GM's CAMI Assembly plant in Ingersoll, Ontario. The union scheduled a meeting for Sunday to instruct members on picket plans and how to apply for strike pay and benefits.

A tentative contract "does not appear achievable," read a notice on the union's website posted Saturday. The union local has said it wants improved wages and benefits as well as commitments for further investments in the plant that would bolster job security.

GM said in a statement Sunday that it "will work with our Union partners toward another innovative and mutually beneficial competitive agreement."

The plant produces the compact Chevrolet Equinox, which competes in the most popular category of vehicles as consumers gravitate toward crossover SUVs and away from passenger cars. Equinox sales have been surging as GM winds down production of an old model and rolls out an all-new version.

U.S. sales rose 17% to about 185,000 vehicles this year through August, making it GM's second-highest-selling product behind the Chevy Silverado pickup. It also sold about 17,000 Equinox SUVs in Canada.

For years, the plant in Ingersoll has strained to meet demand. Early this year, GM began producing limited numbers of the SUV in Mexico, giving it another option in the face of a strike in Canada. GM made about 161,000 SUVs at the CAMI plant this year through July, according to WardsAuto.com.

GM invested more than $600 million in the Ingersoll plant to gear up for the new Equinox. It also laid off several hundred CAMI workers earlier this year amid slimmed-down production plans as Mexico takes on more work.

GM a year ago agreed to a four-year contract with Unifor for its other Canadian operations, including an engine plant and another vehicle-assembly facility. The CAMI factory operates under a separate contract.

The Canadian auto sector has been shrinking in recent years as auto makers pour investment into Mexico and the U.S., partly to avoid Canada's relatively high manufacturing costs.

Write to Mike Colias at Mike.Colias@wsj.com

(END) Dow Jones Newswires

September 17, 2017 11:52 ET (15:52 GMT)

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