The Canadian Auto Workers union Unifor announced its new three-year contract with Ford Motor Co. The transition to electric vehicles “very significantly delivers” on members’ priorities on pensions, wages and work, with senior workers set to see their wages rise by more than 19% over the term of the agreement.
The deal includes the largest overall wage increase negotiated in Unifor and the history of the Canadian Auto Workers union, with increases of 10 per cent in the first year, 2 per cent in the second year, and 3 per cent in the third year. The wage increase will bring the production member from $24.26 per hour in Canadian dollars to $29.67 per hour in the first year of the agreement.
Over the term of the agreement, senior employees will see their hourly wages rise from C$37.33 to C$44.52, an increase of 19.2%. The Canadian dollar is equivalent to 74 cents in US currency.
The deal affects 5,600 Ford workers at three Ontario plants: Oakville Assembly in Oakville, Essex Engine and Windsor Engine, both in Windsor across the river from Detroit. Workers in distribution centers are also affected by the agreement. Voting on the deal began at 10 a.m. on Saturday and ends at 10 a.m. on Sunday.
“To respect the certification process, we will not discuss the details of the initial agreement,” Saeed Deeb, a Ford spokesman, told the Detroit News. Details of the deal were revealed as UAW members entered the ninth day of a strike at select Ford and General Motors facilities. and Stellantis Nevada.
UAW President Sean Fine said Friday that he had made progress in talks with Ford and saved the company from expanding a strike that hit rivals Stellantis NV and General Motors Co. Workers at the Michigan Ford Association in Wayne are still on strike. They have been on the picket lines since the UAW’s contract with Ford expired at 11:59 p.m. in September. 14.
Even if the Unifor deal has historic gains for its Ford members, experts say those people will still keep an eye on what UAW members get.
“It’s the best contract we’ve seen in the Canadian auto sector in some time,” Larry said. “But will it be enough given that UAW members seem to be holding out and fighting for more south of the border? I don’t know.” Savage, professor of labor studies at Brock University in Ontario. “I think Sean Fine is going to be the elephant in the room at the Unifor ratification meetings, whether Unifor likes it or not.”
But Savage added: “There is a lot of money on the table. This makes it more difficult for workers who are struggling to vote against the agreement.”
Aside from the big wage gains, the Canadian union has won new investment for its Essex Engine plant. Ford will add additional capacity to support production of the 7.3-liter V-8 engine there. Facility upgrades in Essex should begin in late 2025 with launch planned for the first quarter of 2028.
Ford agreed to renew its commitment not to close facilities for the duration of the agreement. It is also recommitting to its plans to convert the Oakville complex into an Oakville electric vehicle park. In April, the Dearborn automaker said it would invest $1.3 billion (C$1.8 billion) to convert the plant to assemble several electric vehicles and battery packs. Details have not been released about the vehicles that will replace the gas-powered Ford Edge and Lincoln Nautilus midsize SUVs currently manufactured in Oakville.
Ford’s plan is to launch the first electric car in Oakville in 2025.
To support the transition to electric vehicles, Unifor has negotiated “special transition measures” with Ford, which focus on Ford’s Oakville plant. The measures, which will be in place during the next plant retooling period and up to eight months after shutdown, focus on securing income during the transition period.
Unifor was also able to negotiate the time it takes to reach the highest pay rate to be cut in half to four years.
Other wage gains include:
- Special amendment for skilled trades in the first and third years of the contract.
- Skilled workers will receive two additional wage adjustments: a 2.75% adjustment in the first year – on top of a 10% general wage increase – and 2.5% in the third year, on top of a 3% general wage increase. It will rise from $44.77 to $55.97 per hour by the end of the agreement.
- A cost-of-living increase of $1.21 per hour upon ratification with additional adjustments in the second and third years of the agreement up to a maximum of $2 over the term of the agreement.
- A $10,000 productivity and quality bonus paid to each full-time employee (not including part-time temporary workers) upon certification – representing the largest production and quality bonus the union has ever negotiated.
- Eligible part-time temporary workers will receive a $4,000 bonus on the Monday following certification.
The union notes that the “key achievement” was improved pension security for members as there had been no negotiated pension increases at Ford since 2005. The workers were hired after November 2005. As of November 7, 2016, the People with a defined contribution plan in the College of Applied Arts and Technology’s defined benefit plan, a multi-employer fund.
Marek Masters, a business professor at Wayne State University, called for the Unifor-Ford deal ““An impressive win for workers.”
He added that the agreement “strengthens the case the UAW is making for improvements in its potential agreement with Ford. Although bargaining environments and legal systems differ across Canada and the United States, unions on both sides of the border face similar challenges with common goals.” To secure jobs, improve the economic situation of workers, and expand union representation in the automobile industry.
Fine on Friday pointed to some of the proposed contract improvements the union has received from Ford so far including: the previously announced move to bring workers at Ford’s Rawsonville Components plant and Sterling Axle plant to the same pay scale as assembly plant workers; restoring the cost of living adjustment that was suspended in 2009; For the first time, the right to strike due to factory closures.
Fine also said Ford agreed to new job security provisions, including guaranteed income security for up to two years, with health care, for laid-off workers. He also cited improvements to the profit-sharing formula offered by Ford, but did not mention any movement on wages. Ford’s last known offer was a 20% pay increase over the life of the contract.
While there is pressure on Unifor to ratify this contract amid intense UAW talks, its ratification deal in Canada with Ford will likely put pressure on the UAW.
“If the Ford-Unifor deal is ratified, Ford may try to use the agreement to force the UAW to settle,” Savage said.
“The pressure will flow both ways. There’s no doubt about that.”
Staff writer Jordyn Grzelowski contributed.
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