Ford has told the Canadian Auto Workers that labour costs must come down if the union wants a share of future investment, which the automaker intends to channel to wherever it gets “the biggest bang for its buck,” the head of the CAW has said.
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Reuters noted that the two sides reopened formal contract negotiations a day earlier, when Ford’s global manufacturing chief, Joe Hinrichs, laid out the company’s position to the union.
“Joe’s message to us was that there are no guarantees,” CAW president Ken Lewenza told the news agency.
Ford is seeking the same cost savings that the union gave to Chrysler and General Motors last spring as those companies struggled to survive. The three-year collective agreements cut about C$19 (US$17.75) an hour from labour costs.
The CAW said it offered Ford the same deal as it sealed with GM and Chrysler, but on the condition that Ford guaranteed to maintain the current level of its North American manufacturing presence in Canada, which is about 13%.
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By GlobalData“It’s not likely that we’re going to get a 13% footprint at this point in time,” Lewenza told Reuters. “In fact he (Hinrichs) made it clear that there are no such guarantees in the automotive industry today.”
GM and Chrysler agreed to maintain Canadian production at about 17 and 20 percent, respectively, of their North American footprints, but the guarantees were tied to billions of dollars in government aid money.
Ford is the only one of the Detroit-based automakers that avoided restructuring through bankruptcy proceedings. It was the only automaker that did not ask either the Canadian or U.S. governments for a bailout.
The company has no new vehicles planned for its St. Thomas, Ontario, plant after the large sedans being manufactured there now are phased out in 2011. The plant employs about 1,500 of the company’s 7,000 Canadian workers, and without it, Ford’s Canadian manufacturing footprint would fall below 10%, the report noted.
Lewenza said the union was still trying to extend the life of the plant, but the union’s bargaining team was now largely focused on investment commitments.
“Ford is making decisions not for tomorrow, but for two or three years down the cycle plan, and we want to be part of that,” he said. “If you get investment commitments, product follows.”
Reuters noted that Ford has made recent progress in gaining concessions from its US labor force [though some plants are not ratifying the latest UAW recommendations] and labor costs now run about $16 per hour higher for Ford in Canada than they do in the United States.
The company’s other Canadian operations are in Windsor and Oakville, both in Ontario.
