Labor contracts between Ford, General Motors, and Chrysler and the Canadian Auto Workers union have expired, and, while the CAW won’t strike yet, it’s still deep in negotiations with all of the Big Three automakers.
Ford is currently in the best shape – as of yesterday afternoon, the Dearborn, Michigan-based automaker managed to form a tentative agreement with the CAW. The new deal is a four year contract and includes the equivalent of over $9000 in bonuses for Ford’s Canadian plant workers as well as adjustments in the two-tier wage system, according to the Detroit News. In return for those benefits, Ford’s CAW workers gave up guaranteed cost of living increases over the length of the new contract. While the new labor agreement has yet to be approved by the workers, there’s little doubt it will be ratified. Ford executives can now breathe more easily, too; the Ford Edge and Flex, and Lincoln MKX and MKT are all built at the company’s Oakville Assembly facility in Oakville, Ontario and the V-8 engines for the Ford Mustang are built at Ford’s Essex Engine Plant in Essex, Ontario outside of Windsor.
The CAW has given GM and Chrysler the opportunity to review – and potentially adopt – the same deal struck with Ford. Despite going past the midnight deadline last night, the union has agreed to indefinitely extend the current contract with both automakers while they review the Ford agreement. The Detroit News has also reported that the CAW has agreed to let GM and Chrysler know 24 hours in advance before striking. “We weren’t looking for a strike, we’re looking for a settlement,” CAW President Ken Lewenza told The Detroit News.
However, as the Detroit Free Press points out, the CAW is at a disadvantage in negotiations with GM and Chrysler. Both companies have shown willingness – and the ability – to move production elsewhere if labor costs are too high. Fiat-Chrysler’s CEO Sergio Marchionne famously told workers at Fiat’s Pomigliano plant outside of Naples, Italy to shape up and agree to a new deal, or that the company would take the work elsewhere. According to the Freep, Marchionne has made the same kind of statement to the CAW: meet our terms or we’ll take production out of Canada.
General Motors, on the other hand, has recently made numerous investments to expand production at some of its U.S. plants, including ones in Spring Hill, Tennessee and Detroit-Hamtramck, Michigan. Both of those facilities are being readied to build vehicles that are currently also built in Canada (the Chevrolet Equinox and Impala, respectively).
It’s also worth noting that just 13 percent of the CAW’s workforce is employed by the Big Three, according to the Freep. Honda and Toyota also have large manufacturing facilities in Canada, but as its workers are not represented by the CAW, their production isn’t as affected by the current contract negotiations.