Ford, Canadian Auto Workers reach strike-saving labor pact (Pt. 2)

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Canadian flag and the world “Canada.”

Canadian Auto Workers' concerns were not completely addressed by Ford. (Photo Credit: CC BY/Government of Canada/Wikipedia)

The tentative labor agreement between Ford Motor Co. and Canadian Auto Workers labor union have staved off layoffs and plant closures for now. However, the province of Ontario continues to struggle. CLICK HERE if you missed the beginning of this article.

Dark times for Canadian Auto Workers

Negotiations between Canadian Auto Workers and Ford cover a total of eight assembly plants across Ontario. The rising value of the Canadian dollar (up 60 percent so far in 2012) and exodus of production jobs to the U.S. and Mexico have severely hampered Ford’s output in Canada. Other automakers have experienced similar production problems, such as General Motors, which will shut down its assembly line in Oshawa, Ontario, in June 2013. This will cause 2,000 jobs to go dark, according to the Canadian Auto Workers union. Production of the Chevrolet Equinox and Cadillac XTS full-size luxury sedan will shift to a plant in Tennessee, where U.S. workers will be paid under $17 per hour.

Detroit’s Big 3 depend upon North American production a great deal, particularly when in comes to light vehicles. Approximately 18 percent of all such vehicles made this year in North America through August come from Canadian assembly plants, such as Ford’s engine plants in the area of Windsor, Ontario, as well as the Oakville assembly plant located near Toronto.

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‘The smallest footprint in Canada’

Ford’s Canadian payroll is reportedly smaller than the 8,000 workers apiece held by General Motors and Chrysler. According to Tony Faria of the University of Windsor, Ontario’s Office of Automotive and Vehicle Research, that means Ford has the “smallest footprint” and hence the least to lose if an unfavorable labor agreement were to be reached. This is why Ford was the first of the Big 3 to acquiesce to Canadian Auto Workers’ demands in 2008, the last time contracts were negotiated, noted Faria.

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Cutting expenses has proven to be a major theme for automakers, but labor unions like the CAW have a bottom-line standard beneath which they will not sink, in light of the 2009 deal made necessary by the government-backed bankruptcies of GM and Chrysler. The “two-tier” wage system approved in the U.S. is another stumbling block that the CAW will not accept from the Big 3.

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