The head of Ford’s Canadian operations says the company wants to reopen its contract with the Canadian Auto Workers in the hope of securing terms similar to those the union has already negotiated with General Motors Corp. and Chrysler LLC.
The CAW has signed new contracts with both of those companies that include substantial wage and benefit concessions. Though Ford has avoided following GM and Chrysler into bankruptcy court, Ford Canada President David Mondragon said Ford needs a similar deal if its Canadian operations are to remain competitive.
“We are very anxious to sit down with the CAW,” he said. “We’ve got to bring ourselves in line, not only with our competitors here in Canada, but with our other manufacturing facilities in the United States.”
The CAW’s new contracts with GM and Chrysler brought labor costs in line with those at Toyota Motor Corp.’s operations in the country. New hires now start at 70 percent pay and do not reach full wages for six years; a new health care trust will oversee retiree health benefits; pensions are frozen until 2015; and a number of benefits and a vacation bonus were eliminated.
These concessions cut Chrysler’s costs by about $17 an hour and GM’s by about $20 an hour.
In announcing the deal with GM on May 22, CAW President Ken Lewenza said the union was open to negotiating a similar deal with Ford.
“We will have to look at Ford operations and make sure the CAW is not a deterrent to future investment,” he said. “We will do due diligence on that in the next few months.”