Canadian Auto Workers Pres. Ken Lewenza has picked Ford as the union's strike target.
The Canadian Auto Workers Union has selected Ford Motor Co. as the focus of its final push for a new contract. The current agreement expires at 11:59 p.m. Monday and the CAW warns it will strike Ford if no agreement is reached before then.
It would be the first national walkout by Canadian automotive workers since 1996 and the threat underscores the remaining differences in contract talks that have turned quite bitter over industry demands for extensive concessions meant to bring down labor costs north of the border.
During a press conference in Toronto Sunday CAW president Ken Lewenza did offer some positive encouragement, however, indicating progress was made in recent days in its talks with Ford which has been picked as the so-called “strike target.” Like its American counterpart, the union usually settles in on one maker that it sees most likely to yield the best settlement putting talks with the other Detroit makers temporarily on hold.
Lewenza stressed nothing had been settled but there were several agreements in principle in place with Ford, and because of that the CAW would devote its resources on getting a deal with Ford and creating a framework under pattern bargaining for the other two, General Motors and Chrysler.
Ford said in a statement it has a strong track record of working collaboratively with the CAW, and that it was confident that collectively they will find an innovative solution to help build “a successful future” for its Canadian operations.
Meanwhile, Chrysler said Sunday it was “very concerned” about the CAW’s decision to target Ford, adding that the negotiations are pivotal in shaping the automotive landscape in the country.
Chrysler has taken the hardest line in its discussions with the CAW. Chrysler CEO Sergio reiterated Friday the need for fundamental change in its agreement with the union.
“While we respect Ford as a competitor, we don’t think they are in the best position to take on this role given the significant reduction in their Canadian footprint in recent years,” Chrysler said in a statement, adding that it planned to continue to negotiate with the CAW towards a contract that reflected its own needs.
The Center for Automotive Research estimates the all-in labor cost of producing the Detroit Three’s vehicles in Canada is roughly $60 an hour compared to $58 an hour at Ford, $56 for GM and $52 for Chrysler in the U.S.
As a result, the automakers have been pushing the CAW for a two-tier system of wages akin to the one agreed to in the U.S. They also want to move new hires into a cheaper defined contribution pension program, as well as eliminating cost of living increases and the so-called “30-and-out” retirement program.
Lewenza said the union remains fundamentally opposed to a two-tier wage system, and that part of the reason Ford was selected as the target is because it indicated it would be open other possibilities.
The CAW has presented an alternative wage proposal to the three automakers that includes, among other things, lowering the entry level wages of new employees below the current $24 an hour and extending the “grow-in” period for those workers to reach peak wages of $34 an hour from six to years to ten.
The CAW represents about 4,500 workers at Ford, 8,000 workers at GM and another 8,000 at Chrysler. Its contracts with all three automakers expire at 11:59 p.m. Monday. But only Ford currently faces the midnight strike deadline.