Fate of Canadian auto industry at stake in Unifor talks – Detroit Free Press
At least three of the eight unionized auto plants in Ontario could close in coming years unless union leaders during contract negotiations this summer persuade the Detroit Three to commit to more products at those factories..
Unifor, the union that represents the workers, is worried about the future of General Motors’ assembly plant in Oshawa, Ontario; Ford’s engine plants in Windsor and Fiat Chrysler’s Automobiles plant in Brampton, Ontario. Together, those plants employ 7,200 workers or about one-third of union members employed by the Detroit Three in Canada.
Each make products scheduled to be phased out or that could be moved elsewhere unless the automakers decide to overhaul the plants with new equipment and make new or redesigned engines and vehicles there.
“This really is about the future of the auto industry in Canada. Plain and simple, no way around it,” Unifor President Jerry Dias told the Free Press.
‘One hell of a dilemma’
There has been growing alarm in Canada about the loss of investments as the Detroit Three and other automakers plan to build most new auto new plants in Mexico in recent years.
Prime Minister Justin Trudeau and Ontario Premier Kathleen Wynne appeared at events with GM, FCA and Michigan Gov. Rick Snyder in recent weeks to talk about the importance of keeping auto industry investments in the country.
Unifor represents about 23,500 autoworkers in Canada at plants operated by the Detroit Three and another 16,000 employed by automotive suppliers.
It doesn’t represent workers at six plants operated by Honda and Toyota. Canadians became alarmed last year when Toyota announced plans to move production of its popular Corolla sedan to a new plant in Mexico in 2019 and would replace it with increased production of its RAV4 crossover in Canada.
“We are in one hell of a dilemma here in Canada, and if we do not fix it in 2016, then we are not going to fix it,” Dias said. “If I can’t solidify our footprint when things are going well, then we are not going to solidify it at all.”
Unifor’s four-year contract with GM, Ford and FCA expires on Sept. 19. Preliminary discussions have already started and formal discussions are expected to ramp up next month.
Dias said Unifor also plans to push for a raise for his members and wants to persuade automakers to shorten the time it takes a newly hired worker to get to the top pay rate.
New workers hired by the Detroit Three in Canadastart at C$20.40 per hour and reach the top wage of C$34 per hour after 10 years. Many Unifor autoworkers who haven’t received a raise in 10 years are expecting wage increase in this round of negotiations.
Losing jobs to Mexico
Dias said Unifor members understand Canada’s automotive industry is slipping away.
Last year GM moved production of its Camaro from Oshawa to its Lansing Grand River plant. In 2014, Ford considered a new engine program for its in Windsor and Essex
“We are going to bargain some increases in economics, but I have no intention of negotiating economic suicide,” Dias said. “It doesn’t matter what your wages are, or your benefits, if you don’t have a plant or a product.”
Unifor’s plant investment goals will help determine which automaker is picked to lead discussions.
“It will all be tied into the employer that makes the strongest commitment to the Canadian operations,” Dias said.
Unifor, like the UAW in the U.S., will begin negotiating with all three automakers at the same time. On Labor Day, Unifor will pick a lead company. Automakers typically vie for pole position in contract talks so they can shape the overall contract to fit their financial and operational needs.
While several plants have uncertain futures, it is GM’s Oshawa plant — where 2,600 hourly workers are employed — that Dias is most concerned about.
The plant has two assembly lines. The Flex Line builds the Chevrolet Impala, the Buick Regal, and the Cadillac XTS. But all three are scheduled to either be discontinued or moved to other plants.
The Consolidated Line builds the Chevrolet Equinox. Last year, GM decided to continue building the Equinox in Oshawa until 2017, temporarily saving 700 jobs. But GM plans to move all Equinox production to GM’s CAMI Assembly plant a few hours down the highway in Ingersoll, Ontario, next year.
“The reality is that they don’t have anything earmarked for Oshawa right now,” Dias said. “And we need to solidify the footprint because I am 100% convinced that they are going to close Oshawa if we don’t.”
On June 10, GM said it plans to hire 700 new engineers and software developers at Oshawa and will establish a new development center in nearby Markhum, Ontario.
But GM executives said that commitment should not be viewed as a commitment to the keep the assembly plant open.
“I don’t think what we are talking about here today is directly related to the manufacturing footprint (in Canada),” Mark Reuss, GM’s executive vice president and head of global product development, said that day.
Unifor’s Ford’s engine trouble
Ford makes engines at two engine plants in Windsor and at an assembly plant in Oakville, Ontario.
In 2014, workers at engine plants in Windsor and Essex along with Canadian politicians and the community were hoping their plant would be picked for new engine programs.
After all, Unifor signed a contract with Ford in 2012 that guaranteed the union a shot at new engine programs — as long as certain criteria were met, including government support. But the Canadian and Ontario governments said the financial request from Ford was too high to justify the investment and Ford decided to build a new plant in Mexico.
“Once again, I’m completely, 100% certain of the belief that if we don’t solidify a product for Ford in Windsor they are going to close,” Dias said.
Aging Brampton plant
FCA builds the Chrysler 300, Dodge Charger and Dodge Challenger at its plant in Brampton, Ontario. The cars are distinctive members of FCA’s lineup, but they’re made on an aging platform that hasn’t been fully redesigned in years.
In May, FCA CEO Sergio Marchionne said the automaker could make the next Chrysler 300 off the same platform as the 2017 Chrysler Pacifica minivan and suggested it could be made in Windsor.
Last week, Reid Bigland, President and CEO of FCA Canada, said the automaker is not in any discussions right now for government aid for the Brampton plant. Still, Bigland also noted that the company recently spent $100 million to upgrade the paint shop at that plant.
“Brampton is not as big of a problem,” as Oshawa or the Ford engine plants, Dias said. “But we need to make sure we lock in the existing product line and we need to really talk about what the investments look like in the long term.”
Strong political backing
With three plants on the cusp of extinction, the outlook for Unifor and its workers might look more grim than it really is.
Today, there is widespread recognition among Canadian politicians that the automotive industry is on the brink of extinction without hefty government support. The current political environment in Canada and Ontario pales in comparison to just a few years ago when some politicians were criticizing potential support as “corporate welfare.”
“Justin Trudeau is running a much different government than (former Canadian Prime Minister) Stephen Harper,” Dias said. “Harper … didn’t care about manufacturing or the auto industry at all. And the numbers during his reign reflect that.”
Earlier this month Trudeau and Wynne spoke at a GM news conference about the need for more robust partnerships between government and the automotive industry.
On Wednesday, Wynne announced that Ontario would provide FCA with $85.8 million Canadian in grants to the automaker to support research and development as well as investments it already made to retool its Windsor Assembly Plant.
“There was never a question in my mind that the auto sector is critical to Ontario,” Wynne said.
Products on the shelf
Last year, GM, Ford and FCA promised to invest $16.2 billion in U.S. plants over the next four years. That might sound like a lot, but Dias thinks the automakers held some future cars and trucks back for Canada.
“Look, these are major global companies … they know exactly what they are doing. They think years ahead,” Dias said. “That tells me they were smart enough to leave some money for Canada.”
Contact Brent Snavely: 313-222-6512 or email@example.com. Follow him on Twitter @BrentSnavely.