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Union, automakers begin negotiations as uncertain economy raises stakes

TORONTO — The autoworkers' union is set to begin formal negotiations on Wednesday with Fiat Chrysler Automobiles, Ford Motor Company and General Motors, in what one observer calls "the fight of their life".
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TORONTO — The autoworkers' union is set to begin formal negotiations on Wednesday with Fiat Chrysler Automobiles, Ford Motor Company and General Motors, in what one observer calls "the fight of their life".

Unifor, which represents about 20,000 Canadian workers between the three companies, said the recent COVID-19 pandemic has stoked uncertainty about future job security as economies struggle.

"This round of talks is especially unique and challenging," said the union, on its website outlining the auto talks. "This year's contract talks will pivot on good jobs and future investment."

Ford also said that "global economic uncertainties" have stressed the importance of maintaining jobs in Canada.

"We'll be asking our employees to work with us to help shape this new reality together," said spokeswoman Rose Pao in a statement.

The negotiations will focus on collective agreements that expire Sept. 21. The union said that it will identify on Sept. 8 its "strike target" — the manufacturer it will target first to set a pattern for the other agreements.

Unifor national president Jerry Dias says he will be on the lookout for any attempts by the manufacturers to use COVID-19 as an "excuse." He says other than improving wage increases, he expects major battlegrounds will be a new product investment from Ford in Oakville, putting a stop to outsourcing Ford parts depots, and restoring the third shift in Fiat Chrysler's Windsor and Brampton facilities. Dias is also eyeing the 2023 expiration of major programs in GM's powertrain operation in St. Catharines.

While recent trade policy changes, when enacted, will improve the state of play, Dias says the government needs to do more to attract electric vehicle investments to Canada.

"This is an industry that pays a lot of taxes," says Dias. "And it's a lot of jobs. So everybody's going to have to start to row together in the right direction."

Ian Lee, associate professor of management at Sprott School of Business at Carleton University, says the economic pressure on the auto industry has created an uphill battle for unions.

"GM, Ford, FCA, I think they're increasingly in the driver's seat," says Lee.

"Unifor, in these upcoming negotiations, they're in the fight of their life. I think that there is not going to be so much on wages. I think it's going to be, 'Can we save the plants that are left?'"

The new round of negotiations come as the industry is still dealing with fallout from the novel coronavirus. For example, FCA plants in Canada were down from March 18 to May 4, and GM plants were closed between March 16 and May 25, after which they gradually reopened.

Like previous recessions, auto sales also sputtered during the early months of the COVID-19 outbreak. DesRosiers Automotive Consultants Inc. said that auto sales plunged 48 per cent year-over-year in March, but by July, sales had fallen just 4.9 per cent, the smallest decrease since the pandemic began.

Nonetheless, DesRosiers predicted that annual sales rates will remain flat for one to two years.

The new negotiations will be set against the background of the new United States-Mexico-Canada Agreement, which went into force July 1.

The deal included a provision that a significant percentage of the value of a car be produced by workers earning the equivalent of at least US$16 per hour, something the Canadian government said could improve Canadian automotive manufacturing's competitiveness compared to that of Mexico.

While some trade policy changes, when enacted, will improve the state of play, Dias says the government needs to do more to attract electric vehicle investments to Canada.

"This is an industry that pays a lot of taxes," says Dias. "And it's a lot of jobs. So everybody's going to have to start to row together in the right direction."

Between 1999 and 2017, Canada dropped to the No. 10 auto manufacturing country in the world, down from No. 4 in 1999, Unifor previously estimated.

"Mexico is building smaller cars, in a threat to Canada. But I've argued that the biggest threat to Canada is not Mexico. It's the southern United States," says Lee.

"In the American South, it's not only wages that are lower ... taxes are lower, state taxes are lower, land costs are lower, cost of living is lower."

In 2016, GM was targeted by the union, which cited the company's financial surplus and asked for new allocations for vehicles and powertrain and better incentives for new hires and retirees.

The agreements, which can be hundreds of pages in length, ended up converting 700 jobs at GM and securing a $713-million investment and 500 jobs from Ford, among other issues.

Last year marked the culmination of downsizing at a GM plant in Oshawa, Ont. The plant east of Toronto now has about 300 workers, down from about 2,600.

"There's going to be a great temptation for the three companies: When they close down these particular cars as a segment, they will not replace them. If you don't replace them, you close up a plant," says Lee.

This report by the Canadian Press was first published Aug. 10, 2020.

Anita Balakrishnan, The Canadian Press




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