A cloud was raised over the Chrysler Brampton assembly plant and its 2,500 jobs last year when FCA chief executive officer Sergio Marchionne walked away from negotiations with the federal and Ontario governments.PETER JONES/Reuters
There could be good news for Unifor in the deal reached this week between its sister union and FCA North America (Chrysler): The auto maker has billions of dollars to invest in its plants and is prepared to increase hourly wage rates for U.S. workers.
The task for Unifor president Jerry Dias will be to siphon some of that FCA money into Canada to keep an assembly plant in Brampton, Ont., operating and to give his members a raise in negotiations on a new contract next year.
The future of the company's Brampton plant will be the critical issue in those talks.
"Wage increases and making gains are important for us, but clearly the issue for us is product," Mr. Dias said Thursday. "What type of investment will be made in Brampton? What are the commitments?"
A cloud was raised over Brampton and its 2,500 jobs last year when FCA chief executive officer Sergio Marchionne walked away from negotiations with the federal and Ontario governments on a $3.6-billion plan to upgrade that plant and a factory in Windsor, Ont. The company has gone ahead with retooling to assemble a new minivan in Windsor without government financial aid.
Mr. Marchionne has cited costs in Canada as an impediment to investment, but the fall in the value of the Canadian dollar has helped make the company's factories in this country more competitive versus the company's U.S. plants.
Those U.S. plants will be upgraded with about $5.3-billion (U.S.) worth of investments, according to reports from Detroit on the deal reached between FCA and the United Auto Workers earlier this week.
Some of that investment involves shifting production of cars now made in U.S. plants to Mexico.
On the face of it, turning Mexico into the centre of FCA passenger car production in North America would seem to be a negative development for workers in Brampton, who assemble FCA's largest passenger cars, the Chrysler 300, Dodge Charger and Dodge Challenger.
But analysts said Thursday that the transfer of production of FCA vehicles between plants in Toledo, Ohio; Warren, Mich.; Sterling Heights, Mich.; Belvidere, Ill., and Mexico may leave little room at any other plant for the vehicles now made in Brampton so they're likely to stay put.
"I don't know where else they put that footprint for the Brampton product," one industry source said.
Another source, however, said the Warren, Mich., plant, which is losing some truck output in the production shift, could be a home for the vehicles now made in Brampton.
The focus on single plants in Unifor's negotiations with Chrysler will be repeated in bargaining with Ford Motor Co. and General Motors Co.
The union is fighting to keep a Ford engine plant in Windsor alive and win new product mandates for a GM assembly plant in Oshawa, Ont., that has no new vehicles allocated for it later this decade.
"We've got a problem at all three," Mr. Dias said. "GM in Oshawa has to be settled. Ford in Windsor has to be settled [and with] Chrysler, there's no question we need a commitment for the Brampton facility."
Reports from Detroit said the UAW-FCA deal addresses the issue of two-tiered wages, which were agreed to by the union during the 2008-09 recession to help FCA – then called Chrysler – GM and Ford survive the crisis. Lower-tier employees received a raise and the ability to reach the same wage level as so-called legacy employees, who are paid about $28 an hour and get better benefits than newer employees.
In Canada, newly hired workers start at $20.50 (Canadian) an hour. Their wages rise over a 10-year period to the full rate, which at the moment is $34.15 an hour.