Canadian Auto Workers Win Some, Lose Some With Ford

Ford’s new labor contract with Unifor, the union representing 6,400 auto workers across Canada, calls for a sweeping overhaul of the automaker’s engine operations in Windsor, ON, which have shrunk in recent years as Ford expanded its EcoBoost lineup.

Jerry Dias, president of Unifor, the successor to the Canadian Auto Workers union, said shortly after both sides agreed to the tentative contract the substantial part of Ford’s promised new investments in Canada will focus on Windsor, specifically the Essex engine plant that Ford opened in1981.

Under the tentative deal, Ford will spend C$700 million ($630 million) on its Canadian operations.  The bulk of the investment will go into retooling the Essex plant to produce a new engine to become part of the powertrain in key Ford vehicles, Dias says. “The new engine will be more fuel-efficient,” he says.

Dias also says the Essex plant will build the new engine beginning in 2019. Ford also will continue to operate a second engine plant in Windsor that will continue producing V-10 engines used in Ford heavy-duty pickup trucks and vans through the life of the 4-year labor agreement which would expire in 2020.

The union president says new investment in the Windsor engine plant, which opened in 1923, still is  subject to discussion between Ford and Unifor. Dias says he hopes the Windsor factory will get a commitment for a new engine.

Nonetheless, the Essex project is expected to bring new life to Windsor complex whose workforce has shrunk from 6,300 in the late 1990s to about 1,400 today, according to Chris Taylor, president of Unifor Local 200 in Windsor and chairman of the Ford bargaining committee.

The tentative agreement includes raises of about 2% of the contract’s first two years in addition to a $6,000 signing bonus and three annual $2,000 bonuses. the Detroit Free Press reported.

Ford has said little about the tentative agreement pending the outcome of a ratification vote scheduled for Nov. 5-6.

“To respect the ratification process, Ford of Canada will not discuss the specifics of the tentative agreement until unionized employees have had the opportunity to review and vote on the agreement,” Steve Majer, Ford vice president-human resources said in a statement released after negotiations concluded.

The Essex plant currently builds 5.0L V-8 engines used in cars such as the Ford Mustang. It also built the V-6 Duratec engine, which has faded from the Ford lineup.

Investment to Transform Essex Plant

Dias says the investment will elevate Essex from a third-tier plant among Ford engine plants into a top-of-the-line facility that once again will build one of the automaker’s key engines in a completely refurbished plant.

Ford’s commitment follows the pattern set in earlier settlements with General Motors’ and Fiat Chrysler Automobiles’ Canadian subsidiaries. GM has promised to invest in its Oshawa, ON, assembly plant and FCA has agreed to build a new paint shop at a plant in Brampton, ON.

Unifor had believed it had a commitment from Ford to at least consider the Windsor/Essex factories for a new line of engines. Those hopes disappeared after Ford announced in 2014 it instead would build a new engine plant in Mexico.

Dias says Unifor plans to help Ford press Canadian federal and provincial officials to supplement the automaker’s investment in Windsor and Oakville, ON, where a Ford assembly plant will undergo modifications over the next four years under the proposed contract.

“The Ford Edge built in Oakville is also built in China, but we secured a commitment that the Oakville plant will remain the lead export plant,” Dias says.

In today’s automotive industry governments around the world are willing to step up and offer incentives to manufacturers because of the jobs they generate, he says.

“We are much better off today than we were yesterday,” the union leader says, noting global companies are free to make investments in any number of locations such as Mexico. “We're dealing with a global company with global options, and Ford is right up there at the top of that food chain.”

Ford had complained throughout the negotiations about the difficulty of remaining competitive in Canada even while the Canadian dollar’s decline in value has benefited manufacturers operating in the country.

The final hurdle for the proposed Ford agreement is the ratification vote. Key officials at Unifor Local 707, which represents some 4,400 workers at the Oakville assembly plant, have expressed dissatisfaction with the pattern contract union negotiators established at GM in September.

The new agreement does not modify the 2-tier wage system that many Canadian workers dislike as much as their counterparts in the U.S., where it was phased out last year under new labor agreements with the UAW. Unifor bargainers tried to mollify critics of the system by raising the lower-seniority second-tier workers’ wages between C$5 ($3.70) and C$7.50 ($5.60) per hour over the next three years.

The current wage for Canadian second-tier workers is about C$20 ($15) The top-tier wage is C$34 ($25.40) Canadian.

The current and tentative agreements, however, require Unifor members to wait up to 10 years before they reach the top of the wage scale, which has made it very unpopular with Ford's new employees, workers at Oakville have told Ward’s.

Meanwhile, criticism of the tentative agreement with Ford has been circulating on social media and a rejection could lead to a renewed standoff and possible strike.