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Ford picked as Canadian bargaining target by Unifor

The Unifor union selected Ford Motor Co. as the target company for this year’s contract talks in Canada, less than two weeks before its pacts with the Detroit 3 expire at 11:59 p.m. ET on Sept. 21.

Unifor, which represents about 17,000 Canadian autoworkers under those contracts, will look to pattern deals with General Motors and Fiat Chrysler Automobiles after the agreement it negotiates with Ford.

With Ford, Unifor seeks long-term product commitments at its plant in Oakville, Ontario, following a report from the forecasting firm AutoForecast Solutions that stated the factory would not build the next-generation Edge crossover. That would leave the plant without a production mandate beyond 2023. Ford neither confirmed nor denied that report.

“Wherever my biggest problem is, I’d like to attack it first, and that’s what I’m doing,” Unifor President Jerry Dias told Automotive News Canada on Tuesday morning.

Ryan Kantautas, vice president of human resources at Ford of Canada, said in an emailed statement: “Ford of Canada has a long history of working collaboratively with Unifor and looks forward to reaching a collective agreement in order to remain operationally competitive amidst intense global competition.

“In light of global economic uncertainties, it’s more important than ever to maintain jobs in Canada. We’ll be asking our employees to work with us to help shape this new reality.”

Three-year contract

Dias said the union is negotiating a three-year contract instead of a traditional four-year deal. That would mean Unifor would next negotiate with the Detroit 3 automakers in 2023 — the same year contracts with the UAW are set to expire in the U.S.

“We’re sick and tired, frankly, of going to bargaining a year following the U.S. contract negotiations and fighting for product. We’d rather negotiate product in 2020 and then go head-on in 2023,” Dias said during the news conference.

The UAW, in an emailed statement, said: “We support our brothers and sisters at Unifor and will not interfere in their contract discussions. However, the real product issue is not between the U.S. and Canada, but instead the offshoring to Mexico, China, and other nations of existing products and new products. Only fair trade and trade enforcement will fix that problem.”

The Oakville plant, which currently builds the Edge and Lincoln Nautilus crossovers, was subject to job cuts in 2019 and 2020 as Ford adjusted to a weakening North American new-vehicle market and ended production of the Ford Flex and Lincoln MKT crossovers.

While Oakville accounts for the bulk of Unifor members employed by Ford, contracts also expire for about 1,700 workers at the automaker’s engine plants in Windsor, Ontario, as well as workers at distribution centers in Brampton and Edmonton.

Ford plans to close its Brampton parts distribution center and split the work currently done by about 200 employees there between new locations in the eastern and western parts of Ontario, Automotive News Canada reported in August.

Bargaining in 2023 would mean Unifor would negotiate with Ford as production of the Edge is reportedly set to end. Asked if he was concerned if this could incentivize Ford this year to push long-term product questions to that round of bargaining, Dias said he is confident the company needs to make its plans clear now.

“The Ford Edge will live the life of this collective agreement, I would expect,” he said. “So it really is talking about what comes beyond the Edge. You need to solidify those investments today for years down the road. That’s the way the industry works. Decisions aren’t made overnight.”

The decision to move to a three-year contract makes sense for the union as it looks to secure the Canadian assembly footprint amid a global pandemic and reduced North American new-vehicle demand, said Kristin Dziczek, vice-president of industry, labour and economics at the Center for Automotive Research in Ann Arbor, Michigan.

“You don’t want to be locked into a contract that was negotiated in a down year when three years out the industry is healthier,” she said. “If the cupboard is a little bare this year, it’s not going to be three years from now.”

By looking to move the next round of negotiations up a year, Unifor feels it has a better chance of securing production than it does in the current contract cycle, when it often has few options for investments following UAW negotiations the previous year. Still, Dziczek said Unifor could remain at a disadvantage to the UAW in 2023 because the U.S. union is larger and thus has more flexibility.

“I think it’s still going to be a struggle,” she said. “There’s never a good time to be the little brother.”

‘Good conversations’

While acknowledging that getting Ford to agree to new production for Oakville could be tough, Dias said he has had “good conversations” with the automaker thus far. Negotiations formally began with all three automakers on Aug. 12.

“I’m not convinced that they want a big fight with us like we had with General Motors and Oshawa,” Dias said.

Unifor in late 2018 and early 2019 protested the end of vehicle assembly at GM’s Oshawa, Ontario, plant with a cross-border media campaign, as well as with a temporary blockade of the company’s Canadian headquarters and other measures.

The plant now builds aftermarket parts for GM, which was also the subject of a single-plant strike by Unifor in 2017, when Unifor struck the automaker’s CAMI plant in Ingersoll, Ontario, where the Chevrolet Equinox is built. That plant is not part of negotiations this year. It’s on a different contract schedule.

Dias said he has also been in contact with representatives from Prime Minister Justin Trudeau’s office, as well as with representatives for Ontario Premier Doug Ford and other officials at both levels. He said it would be crucial that the governments come to the table with major incentives for the automakers if Canada hopes to remain a player in auto assembly.

“We are at a critical point in the history of the industry in this country,” Dias said.

EV solution?

In particular, Dias said the Canadian government should do more to attract electric-vehicle mandates to the country. He said the ability to build EVs in Canada will be critical to maintaining auto jobs in the long-term and could be part of production solutions in Oakville and elsewhere.

“Everything is on the table,” Dias said. “But there’s no question we’re spending a lot of time talking about electric vehicles.”

Dziczek said the federal government’s willingness to dole out incentives is an advantage Canada has over the United States. The Canadian government also might be more willing to incentivize EV production, given its goals on climate change and provincial zero-emission vehicle mandates in Quebec and British Columbia.

But she said that because pure battery-electric vehicles have “among the lowest U.S., Canada or North American content” of all models sold in the market, it could be difficult for the automakers to build them in Canada and still comply with regional content requirements in the new United States-Mexico-Canada Agreement. To do so would likely require automakers to either make major investments throughout the supply chain to support production or to be willing to pay tariffs.

“Whereas if you make an EV in the U.S. and sell it primarily in the U.S., you could comply with USMCA or not,” Dziczek said.

FCA, GM

Oakville is one of three assembly plants at which Unifor seeks new production mandates. The other two, in Brampton and Windsor, are owned by FCA.

Unifor wants new production alongside the Chrysler Pacifica, Voyager and Grand Caravan minivans for the FCA Windsor plant, where the third shift was cut earlier this year amid sinking sales in the segment. It also hopes for clarity on FCA’s long-term plans for Brampton Assembly, where the aging but profitable Dodge Charger and Dodge Challenger muscle cars are built. The plant also assembles the Chrysler 300.

Dias said he spoke Tuesday morning with executives at Ford and FCA before making his decision to select Ford as the target.

“After my conversations with the management team, I felt I was better off going to Ford,” he said.

No GM assembly plant will be a part of this year’s discussions, following the end of vehicle assembly in Oshawa in 2019. GM’s CAMI Assembly plant is on a separate contract that expires in 2021. The talks will cover workers at the new Oshawa aftermarket parts operation, as well as those at the St. Catharines, Ont., propulsion plant.

Wage demands

In addition to product demands, Unifor is seeking a reduction in the 10-year wage grow-in for workers, as well as general wage increases.

The wage issue was a divisive one for Unifor Ford members during 2016’s contract talks. The 2016 contract included the 10-year grow-in period’s continuation, sparking the ire of many workers in Oakville.

The contract was narrowly ratified thanks to overwhelming support from workers at the Windsor engine plants, offsetting a majority of Oakville workers who voted against it.

Unifor members last week voted to authorize a strike should one be needed. About 96 per cent of Ford workers voted in favor.

Voicemails left for local union leaders were not immediately returned.

Michael Martinez contributed to this report.

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