Wage gains, bonuses, shorter grow-in period

Editor’s note: All figures in Canadian dollars. As of Sept. 27 $1 U.S. equals $1.34 Canadian.

Unifor members were set to begin a ratification vote today that will decide whether the union’s tentative contract with Ford Motor Co. goes into effect.

The three-year deal includes a commitment from Ford to invest $1.8 billion in its Oakville, Ontario, plant to begin building battery-electric vehicles by 2026, following a retooling in 2024, according to a document posted on Unifor’s website. Wage gains for members include a two-year reduction in the contentious 10-year wage grow-in period, two $2,000 “inflation protection” bonuses, a $7,250 “productivity and quality bonus” and two general wage increases of 2.5 percent for workers at the full pay rate, according to the union.

“This is one of the most significant investment announcements in Canadian automotive history, and is a game-changer for the Canadian auto sector,” union leaders said in a statement.

A ratification meeting, moved online due to the COVID-19 pandemic, was set to take place at 10 a.m. EDT Sunday. Online voting was scheduled to begin at 11 a.m. and continue until 10:59 a.m. Monday.

If ratified, the Ford investment would secure production for the Oakville plant in the coming years after months of speculation over its future. In a letter from Ford to Unifor President Jerry Dias outlining the investment plans, Ryan Kantautas, Ford Canada’s vice-president of human resources, confirmed that production of the front-wheel drive Ford Edge and Lincoln Nautilus crossovers would be phased out in the second quarter of 2023. The all-wheel-drive Edge would be built for the duration of the contract, which would expire in September 2023.

‘Significant change’

“The parties acknowledged that this is a period of significant change in the automotive industry with the rapid development and implementation of new technologies, such as electrification, autonomous driving, and connected vehicles,” Kantautas wrote in the letter. “In the context of such change, the company and union agreed that a viable and thriving automotive industry in Canada is predicated on both competitive operational practices and government support in order to build a strong business case for future investment.”

Results of the ratification vote were expected to be known by Monday afternoon. If ratified, Unifor will next negotiate with Fiat Chrysler Automobiles and will seek to pattern that deal off of the Ford contract.

If the tentative contract is ratified, it would now take eight years for new hires to get to full pay, down from 10 years. In addition, workers would be paid more each year. For example, a new hire would now make 65 percent of the prevailing rate, up from 61.25 percent under the previous contract.

The 10-year wage grid, which the union agreed to in the wake of the bankruptcies of General Motors and Chrysler, has been contentious among members. In 2016, a majority of workers at the Oakville plant voted against a contract with Ford that year in large part due to the continuation of the 10-year grid. It was ratified due to overwhelming support from workers at the company’s Windsor, Ontario, engine plants.

The $7,250 productivity bonus would be doled out the Monday following ratification, while the $2,000 lump-sum bonuses would be handed out in December 2021 and December 2022. In addition to the bonuses, workers at full pay will receive a 4 percent lump-sum payment in the contract’s second year and two 2.5 percent raises, one this year and one in 2022.

Pension unchanged

The terms of Ford’s pension plan remain unchanged, according to the union. That could prove to be important for the ratification vote. According to its letter to Unifor, Ford will employ about 3,000 workers at the Oakville plant by 2027, down from about 3,400 today. Dias said during a news conference last week that he anticipated retirements would account for that reduction.

Ford will offer a $40,000 retirement incentive for “up to” 350 employees, including 20 skilled-trades workers, in early 2021, according to Unifor. The union said it would meet with Ford to “discuss implementation across Unifor locations,” which include the Windsor engine plants and a parts distribution center in Brampton, Ontario.

The automaker will also make retirement incentive packages of $60,000 for production workers and $70,000 for skilled-trades workers in the event of “indefinite layoffs that will not result in recall.” The packages also include a $20,000 vehicle voucher.

In addition to the Oakville investments, the Windsor plant will receive a $148 million investment to build a new engine beginning in 2022. Dias last week said it would be a 6.8-liter engine for the Ford F-150 pickup and Mustang pony car.

Ford also confirmed its plans to close the Brampton parts distribution center, eventually splitting the operations between two new warehouses, one west of Toronto and the other in the Ottawa region. The Brampton warehouse will close and be sold during the life of the contract, according to the Ford letter.

In the wake of widespread protests over racism and police brutality, Unifor and Ford have also agreed to create an “Anti-Racism Action Plan,” which includes the creation of a “Racial Justice Advocate” position.

“This new Racial Justice Advocate will work through the Employment Equity rep and offer support to those who face anti-Black and anti-Indigenous discrimination,” the union said.

Ford will also provide up to 10 days of leave if an employee or an employee’s child “has experienced or been threatened with domestic or sexual violence” if the worker is not eligible for sickness and accident benefits.

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