Multiple sources indicate that the Canadian Auto Workers (CAW) labor union has reached a “tentative” labor agreement with Ford Motor Co. covering wages and benefits for 4,500 Ford workers in Canada. The agreement reportedly prevent a strike at a Ford Edge assembly plant in Oakville, Ontario, that would have had catastrophic consequences for the local economy.
Ford and CAW agree to ratification bonus
CAW President Ken Lewenza indicated that the new four-year deal between the union and Ford does not specify increases to base wages, but it does spell out a $2,050 lump sum payment per hourly employee over the final three years of the contract. Once the labor agreement is fully ratified, those employees that are eligible for increased compensation will receive an additional $3,076 “ratification bonus.”
Not only will the new contract between Ford Motor Co. and the Canadian Auto Workers union spare the Oakville assembly plant, but it will create 600 new jobs for Ford’s operations in Canada, noted Lewenza. This was a key negotiation point between CAW and Detroit’s “Big 3” throughout the past year. Securing future Ford products was also desired by the CAW, but this provision is not addressed by the new agreement. There will also be no change in employee pension plans.
“It’s a damn good deal in these economic times,” Lewenza said. “We weren’t able to achieve cost of living improvements with our retirees… We wanted retirees to share in recent success of the companies, but that too wasn’t possible.”
CAW workers will vote on ratification of the new agreement this weekend, Automotive News reports. Negotiations with Ford will serve as an outline for potential future agreements with General Motors and Chrysler Group. CAW currently represents over 18,000 Detroit Big 3 employees.
Laid off workers may apply
A CAW representative revealed to the automotive press that the 600 new jobs will be added at the Oakville assembly plant, where the Ford Edge, Ford Flex, Lincoln MKT and Lincoln MKX are assembled. Previously laid off workers in Canada will be eligible to fill new openings, a union official indicated.
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Concessions are part of the deal
It’s not all wine and roses for the Canadian Auto Workers union, however, as one of the largest concessions made to Ford by the CAW in the agreement suggests. New hires will have to work more years at lower pay before they can become eligible for top-tier wages. Cost-of-living adjustments will also be held back until June 2016, according to a union representative.
“We believe it meets the objective of our union, our membership and of Ford Motor Co.,” Lewenza remarked. “There’s still some work that has to be done with local issues.”
Lewenza noted that continued bargaining between CAW and General Motors and Chrysler will hopefully prevent the first CAW strike against a U.S.-based automotive company in over 16 years.
‘Expensive’ Canadian labor
According to representatives from Ford Motor Co., Canadian labor costs are among the most expensive in the world. The CAW’s U.S. counterpart agreed to give up increased base wages last year in order to alleviate Ford’s labor costs. As a result, new jobs and products were secured, a compromise that Chrysler and GM have thus far been unwilling to grant.
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Press conference tentative deal between CAW and Ford Motor Company on 9/17/2012