Ford Motor Co. and the union representing its workers in Canada reached a last-minute agreement on a new contract, averting a strike.
The auto maker agreed to terms of a contract that Unifor signed earlier after negotiations with General Motors Co. and Fiat Chrysler Automobiles NV.
The tentative deal with Ford addresses the union’s key demand – that Ford agree to new investments in its Windsor, Ont., engine plants.
“It was about solidifying the footprint,” Unifor president Jerry Dias told a news conference at a Toronto hotel early Tuesday. “The challenge in Windsor was significant. When you're dealing with global corporations they have a lot of options.”
The Essex Engine Plant in Windsor has won a major new program that will provide engines for the auto maker's best-selling vehicles, Mr. Dias said.
The tentative deal will be voted on by Unifor's Ford Motor Co. of Canada Ltd. members on Sunday and there is a danger it could be defeated, although the deal has been recommended unanimously by all members of the bargaining committee.
The union's two biggest Ford locals have been at odds over a deal, with local 707 in Oakville, Ont., seeking changes in the new hire provisions of the contract already signed by GM and Fiat Chrysler.
The 5,000-member strong Oakville unit wanted newly hired workers to progress to full wages more quickly than the 10-year grid in the GM and Fiat Chrysler deal.
The leadership of local 200 in Windsor, which represents 1,700 workers, said that stance meant the Oakville local was gambling with the future of Ford's operations in Canada.
“It has been a trying set of bargaining,” Bob Scott, vice-chairman of the Ford bargaining committee and local 707's representative on the committee told the news conference.
But he said “we are leaving here with an incredible agreement.”
The contract is the best deal the union has negotiated in several years, he said, although he noted that the Oakville local did not succeed in cutting the 10-year grid for newly hired workers to eight years.
The tentative deal includes $700-million in investments, including the new engines for the Essex plant. Production of those engines is expected to start in mid-2018.
Chris Taylor, president of local 200 in Windsor, said the new engine will solidify “a lot of jobs in Windsor.”
The nearby Windsor engine plant will continue assembling the 6.8-litre engine it now makes, through the four years of the new contract, Mr. Taylor said.
“Are we better off in Windsor today than we were yesterday?” Mr. Dias said. The answer is yes, he said.
Workers will receive $12,000 in bonuses during the four years of the agreement, as well as 2 per cent wage increases in each of the first and fourth years of the contract.
Ford had resisted those terms during the talks, but was most troubled by how the 2016 agreement treats newly hired employees.
The 2012 contract established a 10-year grid for newly hired employees to progress from the starting wage of $20.49 an hour to full wages of about $34. But starting wages were frozen until employees had worked at least three years.
The new contract maintains the 10-year progression, but gives newly hired employees wage increases every year. Wage increases for newly hired employees will amount to about $18,000 during the four years of the 2016 agreement.
Ford said those terms put it at a competitive disadvantage to its rivals in Canada because it has hired about 2,000 new employees since 2012. Fiat Chrysler has hired about 1,600 and General Motors of Canada Ltd. has been shedding employees in Oshawa, Ont., since 2012.
The deal covers 5,000 workers in Oakville, Ont., who assemble Ford Edge and Flex and Lincoln MKX and MKT crossovers. Oakville is the only plant where those vehicles are assembled. They have been among Ford’s better performing vehicles in the market this year amid booming crossover sales.
In Windsor, 1,700 employees work at two plants that assemble engines that go into Ford’s F-Series pickup trucks, the Mustang sports car and the Econoline full-sized van.
The tentative agreement, if approved by workers in votes scheduled for Saturday and Sunday, would bring to a close the 2016 set of negotiations between Unifor and the Canadian units of the Detroit Three auto makers.Report Typo/Error