Canada’s Unifor to Walk Pay Hike, Job-Security Tightrope in Contract Talks

The perpetual contest over pay and jobs in the auto industry moves to Canada next month when General Motors, Ford and Fiat Chrysler Automobiles open negotiations with Unifor to replace the current 4-year contract covering 23,000 workers.

The talks, tentatively scheduled to begin in mid-August, a little over a month before the current contract’s mid-September expiration, will mark the first time Unifor representatives will sit across the table from Detroit’s car makers. The union is the successor to the Canadian Auto Workers, which merged with other Canadian unions to form Unifor in 2013.

With the negotiations approaching, Unifor has made it clear it is looking for investment commitments at all three companies that will increase the Canadian auto industry’s shrinking stake. The country’s share of North American car and truck production has declined from roughly 25% to just 15% over the past decade.

Delegates to the Unifor Auto Council recently voted to make new investment in Canada, including new-product allocations at existing plants, the top priority of the upcoming contract talks.

GM’s Oshawa, ON, operation, parts of which date to 1917, employs 2,700 workers, but it has no product assigned beyond 2017. GM has discussed closing all or part of the plant ever since the company’s financial crisis and bankruptcy in 2008-2009.

Sales of vehicles built there, such as the Buick Regal and Chevrolet Impala sedans and Chevrolet Equinox CUV, also built at the CAMI plant in Ingersoll, ON, have declined during the first half of the year.

GM Chairman and CEO Mary Barra confirms the fate of the Oshawa plant is under discussion.

“We are having constructive discussions with Unifor,” she tells reporters ahead of the automaker’s annual shareholders meeting in Detroit, declining to elaborate.

Jerry Dias, the former CAW negotiator who became Unifor’s president after the merger, says new investment in Oshawa is critical to the union.

“They took the (Chevrolet) Camaro out of Oshawa,” Dias notes in a telephone interview with WardsAuto, pointing to the sourcing shift that sent the sports coupe to GM’s Lansing (MI) Grand River plant. “You can’t take 100,000 units of production out of Oshawa and expect the plant to survive.”

Ford’s Windsor, ON, engine plant also needs new investment soon if it is to survive, Dias adds.

“I wouldn’t go so far as to say Ford has reneged on commitments, but clearly something has to be done within the framework of the next agreement,” he says.

That plant builds 5.4L V-8 and 6.8L V-10 gasoline engines that could come under pressure as fuel-economy regulations tighten. Workers have been disgruntled over the lack of a new engine program there as part of a Ford plan to invest $1 billion in its Canadian operations.

Kerri Stoakley, a spokeswoman for Ford of Canada, says in an e-mail the automaker is open to additional investment in Canada.

“What I can tell you is that competition for these investments is fierce,” she writes. “Markets around the world understand the economic benefits of winning an automotive investment. In Canada alone it is estimated that every auto job has the potential to create up to nine additional spin-off jobs.

“We’ve reached competitive agreements in the past and must do it again to win future production for Canada,” Stoakley adds. Ford has 6,400 employees in Canada, including 1,400 in Windsor.

The FCA plant in Brampton, ON, which employs 3,300 Unifor members, also faces challenges in a changing market. The new architecture for the Pacifica minivan, built at the Windsor, ON, plant, also could support a rear-wheel-drive car that could potentially replace vehicles such as the fading Chrysler 300 and Dodge Charger and Challenger made in Brampton.

However, Dias believes that although Brampton needs new investment, it isn’t in as much danger as GM’s Oshawa plant or Ford’s Windsor Engine facility.

“The auto industry is a cyclical business,” he says, and historically the cycle has stretched for six years. “We’re in the seventh year (of the current cycle). It’s basic economics. If we don’t do something now, what’s going to happen when the next downturn comes?”

Wage Hike Also to Be on Table

The length of the expansion and the profits chalked up by all three companies also play into the negotiations.

“We haven’t had a pay raise in 10 years,” Dias says, and that also will be addressed during the negotiations.

With the oversupply on global markets that has reduced the price of crude oil, the value of the Canadian dollar has declined.

Canadian auto workers traditionally have rejected the idea of profit sharing and instead demanded higher straight-time pay, now at C$34 ($30) per hour for workers with 10 years or more seniority and C$20 ($18) per for new hires, who reach the top pay level after 10 years.

U.S. workers with seniority get $29 per hour, and the profit sharing of American workers works out to be roughly equal to the extra compensation paid out in Canada, according to studies by the Center for Automotive Research in Ann Arbor, MI.

But the lack of raises and cost-of-living adjustment has left autoworkers feeling squeezed, says Lindsay Hinshelwood, a worker at Ford’s Oakville assembly plant.

“Ontario is an expensive place to live,” she says, citing the escalating cost of housing around Oakville and the 10-year grow-in to reach the top wage at automotive plants.

Since the 1980s, when strikes at Chrysler and General Motors led to the CAW’s split with the United Auto Workers, autoworkers in Canada have had a reputation for militancy. That was reinforced in more recent years by a blockade at the Oshawa complex in 2008 and by a bitter dispute at a Caterpillar Tractor plant in London, ON, in 2012.

But Canadian workers also have a reputation for building quality products, Dias contends.

“If you look, we build about 15% of the vehicles. But we get 30% of the awards from J.D. Power,” he says. “We hit above our weight.”

Still, the auto industry’s footprint in Canada continues to shrink.

“Eight new assembly plants have gone to Mexico, while they’ve closed two plants in Canada,” Dias points out.

Arthur Wheaton, director of The Worker Institute at Cornell University, says Asian automakers and suppliers may become more critical to the country and its workers than GM, Ford and FCA, even if that is having little positive impact on the union, which has failed to organize many of those operations.

“Toyota, Honda, and other parts suppliers from Japan, China and Korea may have a larger impact on the auto sector,” Wheaton says in an email to WardsAuto. “But little or none of that investment benefits Unifor.”

He predicts the union will not be able to improve its contracts dramatically while at the same time encouraging increased investment, saying it’s likely an either-or situation.

Unifor’s cause wasn’t helped when it lost a recent organizing drive at a Toyota plant in Ontario.

“Organizing (foreign) transplants has proven extremely difficult in the U.S. and Canada,” Wheaton says. “The ability to organize is impacted on the strength or weakness of the labor market. If workers felt they could get a better/equivalent job by leaving, it would lower the risk taken in voting union.

“The weak manufacturing labor market of the past 20 years has made the threat of job loss higher than the perceived benefit of voting union.”

Dias, however, remains optimistic. The union, which joined the CAW with the Communications, Energy and Paperworkers union specifically to increase the political clout of organized labor, already has had a major impact on the political climate in Canada. Unifor defeated an anti-union, right-to-work candidate in a key leadership contest and helped defeat an old nemesis, Stephen Harper, the long-serving Conservative Prime Minister who was replaced by Justin Trudeau.

Trudeau understands the need for keeping a strong auto sector in Canada, which Harper dismissed, Dias says.

“My guess is that Unifor leaders are working to pressure the Trudeau and Wynne (Ontario provincial) governments, (particularly the former), to speak to corporate leaders and find ways to influence new investment,” says Herman Rosenfeld, a former member of the CAW staff.

Indeed, GM invited Trudeau to Oshawa for the announcement it planned to add hundreds to salaried tech jobs in computer science at a research center in the Oshawa complex recently. However, none of the jobs will be on the shop floor that Dias and other Unifor members want to see rejuvenated in the near future.