The Canadian Auto Workers union has fought off what it called a threat by Ford Motor Co. to pull its manufacturing operations out of Canada, but will endure the closing of another vehicle assembly plant, cuts in benefits and time off, and a wage freeze until 2012.
The tentative agreement reached Friday provides Ford with the same cuts the union has already agreed to give Chrysler Canada Inc. and General Motors of Canada Ltd. in what is known as pattern bargaining, where a deal reached with one company applies to all three.
Ford's assembly plant in St. Thomas, Ont., will close in 2011. In return for the cuts, the auto maker agreed that its assembly plant in Oakville, Ont., will manufacture the redesigned versions of two crossover utility vehicles it makes now and add a global family of vehicles some time after 2012.
"Ford was very aggressive," CAW president Ken Lewenza told reporters after four days of intense bargaining that led to a deal announced Friday. "They actually talked about disinvesting in Canada unless we extended the pattern to them," Mr. Lewenza said.
The deal includes commitments that Ford's remaining assembly plant will manufacture 10 per cent of the vehicles the company makes in North America and will produce more vehicles in Canada than it sells here.
A $400-million buyout package that includes lump sum payments ranging from $75,000 to $100,000, continued health care benefits after retirement and vouchers to buy new vehicles will be offered to about 1,400 workers in St. Thomas.
Nonetheless, Mr. Lewenza said the union would have preferred to keep open the plant, which puts together Ford Crown Victoria, Mercury Grand Marquis and Lincoln Town Car models mainly for police and taxi fleets.
The union would have been playing "Russian roulette with the jobs and lives of our members," if it had insisted on keeping St. Thomas open and sticking to an earlier demand that Canada represent 13 per cent of Ford's North American manufacturing, he said.
The union also won a commitment from Ford to continue manufacturing a 5.4-litre engine at its Windsor Engine Plant until 2014 and that its Essex Engine Plant, also in Windsor, Ont., will be the sole source of a new V8 engine.
The total investment in the Canadian operations for the new vehicles in Oakville and the engines in Windsor will amount to about $630-million, Mr. Lewenza said.
Early retirement programs will be offered in Oakville and a parts depot in Brampton, Ont., in 2011 to attempt to create some openings for workers from St. Thomas.
The agreement came several months after the union agreed to concessions at Chrysler and GM so the companies could qualify for a bailout by the federal and Ontario governments.
It will reduce the size of Ford's unionized work force from the current 7,000, but Mr. Lewenza said the union hopes the new vehicles added to the Oakville plant will led to the addition of a third shift of workers there. That would add about 1,000 jobs.
The union leader noted that Ford is still in financial difficulty, in part because it stayed out of Chapter 11 bankruptcy protection and was thus unable to walk away from a major chunk of debt, unlike its two Detroit-based rivals.