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Big Three Open Negotiations With Canadian Union

Aug. 12, 2016
Before the financial crisis of 2008, about 25% of all vehicles manufactured in North America were assembled in Canada. Now the country assembles around 15%, and the drop in production has had a knock-on effect for shrinking automotive suppliers in Ontario.

Difficult negotiations between Detroit’s Big Three automakers and Canadian employees have opened with the workers’ union taking a hard line over warnings that the country’s auto industry is under serious threat.

Canadian plants have steadily lost jobs to Mexico during the last 25 years, and unless the negotiations produce job guarantees and investment commitments, the auto industry will continue to contract, according to Jerry Dias, president of Unifor, the union representing 23,000 workers for General Motors, Ford Motor Co. and Fiat Chrysler Automobiles in Canada.

“We are at a crossroads,” Dias told reporters during a news conference after negotiations with Fiat Chrysler and Ford opened in Toronto on Thursday. “There will be no deals with any of the companies without commitments from each of them for investments in Canada.”

Negotiations with GM began on Wednesday.

The union wants guarantees that GM will build new products at the company’s assembly plant in Oshawa, Ontario, a commitment from Ford to build a new engine at its motor plant in Windsor, Ontario, and an investment by Fiat Chrysler at the automaker’s plant in Brampton, Ontario.

The factories in Windsor and Oshawa could close in two years without new investments, wiping out hundreds of jobs, Dias said.

New investments by the three automakers — all of which have heavily invested in new factories in Mexico during the last decade and refurbished plants in the United States — would also create hundreds of spinoff jobs that would bolster the Canadian economy, which is overly dependent on the energy sector, he added.

The union would not hesitate to use strikes to enforce its demands, Dias warned. “We hope we don’t have to go there, to be candid,” he said, adding that a walkout in Canada would cross the border, forcing GM to close as many as nine U.S. assembly plants.

The union also expects workers at all three Detroit automakers to get raises in any new contracts.

“We have zero interest in concessions,” Dias said. “There is no reason for us to step backward. … The reality is they are making a heck of a lot of money,” he added, saying it would be only fair for workers who have not seen a raise in a decade to share in the profits.

Roughly 25% of the vehicles manufactured in North America were assembled in Canada before the industry’s financial crisis in 2008. Now the country assembles only around 15% of the cars and trucks built on the continent, according to figures supplied by Unifor. The drop in production has had a knock-on effect for shrinking automotive suppliers in Ontario.

Manufacturers are also concerned about the cost of utilities and logistics, as well as the fluctuating value of the Canadian dollar. But analysts have said the union faces a tough battle against automakers that have the upper hand.

Representatives from General Motors, Ford and Fiat Chrysler have said little publicly about the negotiations so far.

GM said in a statement issued as the talks got under way that it looked forward to the negotiations with Unifor, which replaced the Canadian Auto Workers union in 2013 after it merged with other unions in the communications, energy and paper industries.

“These negotiations are an important first hurdle in building a business case for future investments in Canada,” GM said. “This business case will also include other partners, such as government, suppliers and our communities.”

Fiat Chrysler cited its recent investment in the company’s Windsor assembly plant. The company “has a longstanding history of working collaboratively with Unifor, which has helped strengthen our position in the Canadian market since 2009,” it said in a statement. “As we head into these negotiations, we look forward to continuing that partnership while reaching a labor agreement that will sustain the company’s competitiveness over the long term.”

Ford also stressed its need to remain competitive.

“We approach the process with a shared goal — to pursue long-term viability for Canadian auto manufacturing,” the company said in a statement emailed to reporters after negotiations opened. “The global landscape has significantly changed in four years, and through our discussions we’ll need to find innovative ways to be competitive and support our employees’ quality of life.”

The autoworkers could strike if no agreements are reached by the time existing contracts expire in little more than a month.

By Joseph Szczesny

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