quick search
Today:

Ford Reaches Tentative Deal With Canadian Auto Union

Sep 20, 2023 Business

DETROIT — Ford Motor’s labor troubles could become an international issue that affects U.S. production of some pickup trucks, as Canadian union Unifor and the company have only hours to reach an agreement for roughly 5,600 autoworkers.

The sides have to reach a deal before an extended 11:59 p.m. ET Tuesday deadline to avoid a potential strike. The initial deadline for the talks was Monday night, but the sides announced a 24-hour extension after the union received a “substantive offer” from Ford “minutes before the deadline.”

The potential Canadian work stoppage adds to pressure facing Ford days after the United Auto Workers called for targeted strikes against Ford and its crosstown rivals, General Motors and Chrysler parent Stellantis.

A Unifor strike would disrupt Ford’s Oakville Assembly Plant that produces the Ford Edge and Lincoln Nautilus crossovers. It would also affect two engine plants that produce 7.3-liter and 5.0-liter V8 gasoline engines used in highly profitable products such as the Ford F-Series Super Duty and F-150 pickups and the Mustang muscle car.

An aerial view shows Ford’s Oakville Assembly Plant in Oakville, Ontario, Canada May 26, 2023.
Carlos Osorio | Reuters

If Unifor strikes against Ford, it would be the first time both unions have simultaneously gone on strike against a Detroit automaker over national contracts — marking another unprecedented labor move after the UAW struck all three of the Detroit automakers last week for the first time.

“Ford doesn’t want a strike anywhere. Having the extra pressure of Unifor is pushing Ford very hard to get a deal,” said Art Wheaton, a labor professor at the Worker Institute at Cornell University.

Unifor, whose auto members were part of the UAW until a split in the mid-1980s, confirmed talks are ongoing after they continued past the deadline into Tuesday morning.

F-Series, Mustang could be disrupted

If a prolonged Canadian strike occurs, the work stoppage could eventually impact U.S. production of the vehicles. The breadth of the effect depends on Ford’s engine stock and how much the company would want to focus on non-V8 gasoline engine models.

For F-150 and Mustang, Ford could increase production of four-cylinder and V6-powered engines, including EcoBoost ones that have made up the majority of sales since 2018. The company also could increase production of diesel engines for its larger Super Duty trucks.

Gasoline V8 models make up about 50% of Mustang and 20% of F-150 models sold in the U.S. Large F-Series trucks exclusively have V8 engines. But a majority of those vehicles sold have diesel V8 engines rather than gasoline, according to the company. Those engines are made at a plant in Mexico, not Canada.

Lana Payne speaks on stage as Unifor, Canada’s largest private sector union, announced her as their new president to replace outgoing leader Jerry Dias in Toronto, Ontario, Canada August 10, 2022.
Cole Burston | Reuters

“We will continue to work collaboratively with Unifor to create a blueprint for the automotive industry that supports a vibrant and sustainable future in Canada,” Ford said in a statement about the talks early Tuesday.

Unifor, which represents 18,000 Canadian workers at the Detroit automakers, took a more traditional approach to its negotiations than its U.S. counterpart did. The Canadian union picked Ford as its “target” company instead of following the UAW’s new strategy of bargaining with all three automakers. It also announced a traditional national strike, if needed, instead of targeted ones.

Hours before the initial deadline, Unifor National President Lana Payne said the union and Ford were “not where we need to be on key priority issues,” including wages and pensions. She noted the last time Canadian automakers went on strike was in 1990.

“We need Ford to deliver more to meet our members’ expectations and demands, it’s as simple as that,” she said.

UAW connection

Payne said the union has been monitoring the UAW negotiations, and she has been “in touch” with the American union, including on Monday with UAW President Shawn Fain. The UAW and Unifor showed solidarity heading up to the talks and have continued to publicly support each other.

Spokespeople with Ford and Unifor declined to comment on details of the company’s proposal that caused the union to agree to extending the deadline.

Extending contract deadlines is historically common during automotive collective bargaining. However, Fain declined to do so. He also unconventionally set a second deadline of noon Friday to announce additional strikes if “serious progress” isn’t made in the talks by then.

“The automakers for decades have used whipsawing where they’re trying to pit the U.S. against Canada … Shawn Fain flipped the tables on them and is using the same or similar strategy to urge the bargaining,” said Wheaton, the Cornell labor professor.

If the Unifor strikes don’t have an impact on F-Series production, expanded UAW strikes could do so, starting Friday. Barclays analyst Dan Levy said Tuesday that “large pickup plants could be targeted” next by the UAW in its strike against the Detroit automakers, also known as the D3.

“As a reminder, large pickups are the profit engines for the D3,” he wrote in an investor note, pointing out that each has robust inventories of the vehicles.

Cox Automotive reports that “days-supply” of Ford’s F-Series pickups was at 87 days to start September, including 64 for the larger Super Duty trucks; GM was at 79 for the Chevrolet Silverado and 70 for GMC Sierra; and Stellantis’ Ram was at 119 days.

Quick Search

Official Affairs is a reliable source for the latest regional news, corporate updates, and official announcements, providing unbiased reporting and in-depth insights into corporate affairs.

© OfficialAffairs