Today Detroit’s Big Three will begin negotiating contracts with Canadian auto workers. Union officials hope to preserve auto jobs in one of America’s most fundamental manufacturing industries despite the disproportionate amount of auto investments already headed to Mexico and its lower-waged workforce.
California’s largest private-sector union is called Unifor, and its negotiators are primarily focused on keeping future product commitments secure despite ambitions of many automakers to move to Mexico. Unfortunately for Unifor’s 20,000 representatives, one industry expert said a handful of US car companies is still unlikely to make those commitments before their current contracts expire in mid-September. Unifor has made it clear that it is willing to strike if its demands are not met during the negotiation period.
This negotiation period is beginning one year after the UAW (United Auto Workers) successfully secured raises and healthy bonuses for all US factory workers employed by General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV. Still, Unifor workers have been given only the most modest cost-of-living wage adjustments since 2007’s financial crisis and are not offered profit-sharing agreements of any kind.
According to Unifor President Jerry Dias, most important to the benefit of the workers is auto manufacturers’ guarantee that each company will continue to build in Canada.
On the American auto makers’ side, the expectation is that there will be a push for a more variable compensation model in the talks, potentially involving profit-sharing, according to industry experts. Detroit recently overhauled its entire cost structure when it offered UAW workers profit-sharing arrangements that resulted in payouts as high as 11,000.
Mr. Dias made it clear that while the union will push for regular wage increases as opposed to bonuses, the entire initiative will be completely meaningless if there is no future work to begin with due to the movement of jobs to Mexico.
“I’m dead serious that if we don’t have product [commitments] in this set of negotiations, we’re not going to have an auto industry in the long term,” said Mr. Dias in a recent interview. “If you lose a major assembly or engine plants, you lose the supply base that goes with it.”
The most relevant car factories in the discussion include a GM factory in Oshawa, Ontario and a Fiat Chrysler sedan plant in Brampton. The two plants make up an entire fifth of the Canadian vehicle assembly, and the surrounding economic ecosystems would be wrecked by a closure of either plant.
GM is allegedly unwilling to make any firm product commitments to the factory in Oshawa, where at least one of the two assembly lines is expected to close in the next twelve months. The largest line at Oshawa has products scheduled until 2018 at the very latest, another indication of the factory’s impending doom.
Before currency conversions, Unifor’s auto employees currently make a maximum of $34 an hour. With benefits, total compensation reaches a maximum of $65 an hour according to Ann Arbor, Mich.-based Center for Automotive Research of CAR. The rate is the auto sector’s second-highest wage in the world excluding wages in Western Europe.