Ford Canada May Face Union Pushback Over 2-Tier Wage

With a new tentative agreement complete at Fiat Chrysler Automobile Canada, Unifor, the union representing auto workers in that country, now faces contract talks with Ford Canada.

So far Unifor negotiators in the new agreement with General Motors Canada and the tentative deal reached late Monday with FCA have been willing to accept a continuation of the contentious 2-tier wage system under which union members must work 10 years before they can earn the top wage.

Union leaders may face resistance by Ford hourly workers, however.

Unifor President Jerry Dias has said since the beginning of the negotiations that securing commitments to overhaul plants was the union’s top priority.

So far the union has achieved success as GM agreed to spend C$554 million ($418 million) on refurbishing and upgrading its Canadian facilities including its aging assembly plants in Oshawa, ON. The last-minute tentative agreement with FCA, which averted a walkout by 9,750 workers, calls for a C$325 million ($246 million) investment in a new paint shop at the automaker’s  Brampton, ON, assembly plant.

FCA CEO Sergio Marchionne conceded in August the Brampton plant, where the automaker builds the Dodge Charger, Dodge Challenger and Chrysler 300, needed help.

“All plants require investments,” Marchionne told reporters. “There are some structural issues that impact on Brampton about its long-term viability without additional investment, which are not product related. They relate to the longevity of the paint shop.”

FCA spokeswoman Lou Ann Gosselin says the automaker will not comment on details of the tentative agreement because it is subject to ratification by Unifor members.

The next step in Unifor’s effort to force the Detroit Three automakers to invest in Canada is winning a commitment by Ford to place new work in an underused engine plant in Windsor, ON.

At the same time, however, there are signs union members at Ford – where more than 40% of the workers are new hires paid lower, second-tier wages – are prepared to make an issue of the 10-year-grow in period contained in the pattern agreement Unifor has signed with GM and FCA.

Dave Thomas, president of Unifor Local 707, recently was quoted as saying the framework GM has set forward won’t win ratification in Oakville, ON, the heart of Ford’s Canadian operations.

“My members have huge concerns,” says Thomas, whose local comprises a majority of Ford’s unionized Canadian workforce.

FCA Ratification Vote Could Focus on 2-Tier Wage System

After Thomas’s comments circulated, Unifor leaders moved to defend the contract and the current bargaining strategy that has made investment a top priority. But the continuation of the 2-tier system is likely to be tested during the Oct. 16 ratification vote at FCA, where workers at its Windsor assembly plant likely will have a large voice. The Windsor plant has hundreds of new hires who will be voting on a tentative contract for the first time.

Dias and the Unifor bargaining team, aware of newer union members’ concerns over wages, last week sought to address the issue in a post on the union website that challenged the assertion that by retaining the 10-year wait for top wages, Unifor had made a significant concession to GM and, by extension, Ford and FCA under the system of pattern bargaining, in which the economic provisions of all three agreements are virtually identical.

“Is this a concessionary agreement? No.” the post states. “Important gains were made for our members in this agreement. There is no way that this could be called ‘concessionary.’ Not getting everything everyone wanted is not the same as concessions.

“A concessionary agreement would include things like cuts to wages, benefits, time off and working conditions; and on balance would move people backward, not forward.

“In this agreement, Unifor negotiated C$12,000 ($9,000) in lump-sum payments for current employees, two 2% (annual) wage increases for traditional members, a significantly improved new-hire wage grid which will deliver many thousands of dollars in new money to our in-progression members, temporary workers were converted to full-time status and we made some improvements to benefits, including: dental, counseling, childcare and new physiotherapy coverage.”

The union’s new contract with GM includes a revised wage scale for new and recently hired workers. With the 2% raises new workers start at C$20.92 ($15.80) per hour and their salary increases every year for 10 years until they are paid C$34.15 ($25.80) per hour at top scale.

The post on the Unifor website also said the overall value of the Unifor-GM contract varies depending upon job classification and seniority. But the economic gains total nearly C$20,000 ($15,110) for traditional production members – those with at least 10 years’ seniority.

FCA representatives had protested the GM agreement was too expensive but as the deadline approached agreed to the union demands. “Our members deserve this and it is only fair, after the years of zeros they have received,” Unifor officials say.

Talks with Ford are to begin Oct. 17 against a union strike deadline of Oct. 31.