BUSINESS + ECONOMY

Canadian autoworkers union reaches tentative labor deal with Ford, averting strike

Sep 20, 2023, 8:00 AM

The Ford logo is seen on the automaker's headquarters in October 2009 in Dearborn, Michigan. The un...

The Ford logo is seen on the automaker's headquarters in October 2009 in Dearborn, Michigan. The union representing Canadian autoworkers at Ford has reached a tentative deal with the US automaker, keeping the more than 5,000 union members on the job. Photo Credit: Carlos Osorio/AP/FILE

(CNN) — The union representing Canadian autoworkers at Ford has reached a tentative deal with the US automaker, keeping more than 5,000 union members on the job and providing some good news for an industry dealing with unprecedented labor disruptions.

Details of the deal between Ford and Unifor, the Canadian union, were not immediately available. But it is likely very good news for Ford, which is already grappling with a strike by more than 3,000 members of the United Auto Workers union and facing the possible expansion of the US strike this coming Friday.

Unifor had been prepared to go on strike late Monday night until a last-minute offer from Ford led to a 24-hour extension of its union contract and an extra day of negotiations.

“We leveraged our union’s most powerful weapon: the right to strike,” Unifor said in its statement Tuesday evening. “When faced with the prospect of an all-out strike… the company made a significant offer to the union.”

The union said its bargaining committee has unanimously recommended the deal to the union’s rank-and-file membership for a ratification vote. Ford was limited in its comment on the deal Tuesday evening ahead of that vote.

“To respect the ratification process, Ford of Canada will not discuss the specifics of the tentative agreement,” the company said in a statement.

A strike would have shut Ford’s three Canadian factories as well as numerous parts distribution centers, halting production of the Ford Edge and Lincoln Nautilus SUVs, which are built at an assembly plant outside of Toronto, as well as two models of the V-8 engine that are built in two engine factories in Windsor, Ontario, across the river from Detroit.

The lack of those engines would have halted production of two of the company’s top models at US factories – the best selling F Series pickups and the Mustang sports car. In some ways, a strike in Canada would have been more consequential for Ford sales than the strike at the one US factory in Wayne, Michigan, where more than 3,000 UAW members have been on strike since Friday.

It’s not immediately clear what impact this deal might have on the negotiations between the UAW and Ford, as well as General Motors and Stellantis, the automaker that builds vehicles for the North American market under the Jeep, Ram, Dodge and Chrysler brands.

The issues in the Canadian labor negotiations greatly mirrored the issues behind the UAW strike against those three automakers.

Unifor had been seeking improved wages and benefits for members, especially pension benefits, as well as job security guarantees as the automakers prepare to shift their lineup of vehicles from traditional gasoline-powered cars to electric vehicles, or EVs, in the years and decades ahead.

EVs typically take about 30% less labor than a traditional car to assemble, due to having fewer moving parts. Many engine and transmission plants are at risk since their products won’t be needed in an EV.

Neither Unifor nor Ford had revealed where their offers in the Canadian negotiations stood ahead of Tuesday’s agreement.

That’s not the case in the US talks. The companies, which are reporting record or near-record profits, all say they have offered the UAW members raises totaling about 20% during the life of the contracts, including immediate 10% raises.

The UAW, which began talks demanding an immediate 20% pay increase and raises totaling 40%, is insisting the companies’ offers are not enough to make its members whole for past concessions they gave the automakers and modest raises that did not keep pace with rising prices in recent years.

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Canadian autoworkers union reaches tentative labor deal with Ford, averting strike