Canadian Manufacturing

After years of record auto sales, Unifor says investment in Canada is key to bargaining

Unifor president Jerry Dias says the automakers have been "making money hand-over-first," and it's time to put some of it into Canadian production



TORONTO—As talks between the Detroit Three automakers and the workers’ union get underway, Unifor president Jerry Dias says he won’t back down from demands for new investment in Canadian assembly facilities.

“The climate today is much different than it was four years ago,” said Dias, referring to the last round of bargaining.

“Four years ago they had come out of the 2008-2009 recession, but there was still a lot of uncertainty. This round of bargaining is really about solidifying the footprint in Canada. There’s no question in my mind that it’s about the future of the industry.”

With the current agreements set to expire on Sept. 19, both sides have entered into early explanatory discussions—what Dias refers to as “kicking the tires.”

Once the deadline draws near, the union will choose a target company to try to hammer out a deal with that will set the tone for negotiations with the others, a process referred to as pattern bargaining.

Unifor has some bargaining chips in its pocket. For one thing, the weak Canadian dollar relative to the greenback makes for lower labour costs.

Furthermore, auto sales have been on fire, with recent data suggesting Canada is on track for another record year.

And the automakers have been “making money hand-over-first,” said Dias.

General Motors, for example, reported Thursday that its second-quarter profit more than doubled to $2.87 billion—the highest it’s been since the company emerged from bankruptcy seven years ago.

“If we can’t negotiate a settlement that gives our members’ security while times are good, we would be naive to believe that we can negotiate stability when times are bad,” said Dias.

“So the stars are aligned for us, candidly.”

While raises and other employee benefits would be welcome, Dias noted that securing investment in Canada from the Detroit Three is key during this round of negotiations.

“I’m completely convinced that GM will close our assembly plant if we don’t nail down future product,” he said, referring to the company’s Oshawa, Ont., plant, which some fear may be shut down given the lack of new production announcements.

Also in the spotlight is Ford’s engine plant in Windsor, Ont., and, to a lesser extent, the Fiat Chrysler Automobiles factory in Brampton,Ont., he added.

“Negotiating wage increases and other things for our members is moot if we don’t have an assembly plant,” Dias said.

Ford Canada also says labour costs and productivity are important issues in the upcoming talks. Canadian auto manufacturing is at an “inflection point,” the organization said, with much of the new investment heading south.

“We’ve reached competitive agreements in the past and must do it again to win future production for Canada,” spokeswoman Lauren More said in an email.

Industry analyst Mark Petro says there’s a risk that the auto companies could try to appease the union by promising work, but in lower volumes.

“They really need to focus on getting some larger-volume products that will be stable in the long term,” said Petro.

“A five-year fix or a 10-year fix on vehicles that can move around any time or to any place is not a good thing…. It’s got to be the right vehicle for the right length of time.”

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