CAW braces for job cuts at Ford

[Marc]

We hear a lot about job lossers in the US. What is going on in Canada?

CAW braces for job cuts at Ford; tentative labour deal could come Monday

TORONTO (CP) - The Canadian Auto Workers union is trading the rich wage increases it has negotiated in the past for reduced job cuts at Ford Canada in a new three-year labour agreement that could be reached Monday.

The CAW president said his union is bracing for "significant" layoffs in Ontario over the next three years at Ford, which is restructuring its North American operations due to profit challenges and lost market share in recent years.

In hopes of reducing the impact of the restructuring on Ford's 11,600 Ontario workers, the CAW said it may accept Ford's Sunday proposal that offers workers only "moderate" wage and benefit improvements, but prevents wider layoffs as the company reorganizes its workforce.

Hargrove wouldn't quantify the number of possible Ford layoffs though observers suspect it's in the hundreds.

The proposed contract will be reviewed Monday morning by top CAW negotiators. If accepted, it would have to be ratified by rank-file workers on Saturday. The union would then open talks with a second Big Three company - DaimlerChrysler - the following Monday.

In a trade-off for more job security, an agreement with Ford will include lower raises - below the three per cent annual base wage increases workers enjoyed in their 2002 contract, he said. Hargrove wouldn't specify what new wage increases are likely but observers expect Ford will offer between one and 1.5 per cent annual hikes.

The union also hopes to reduce layoffs through early retirement.

"This is not the richest settlement that we've ever negotiated as a union," Hargrove told reporters late Sunday, calling the potential deal a "responsible" one that has the union recognizing Ford's difficulties while ensuring Ford's "continued commitment" to Ontario.

"We're trying to minimize the job losses," Hargrove said earlier Sunday. "We're not going to come out of this without some pain."

DaimlerChrysler and General Motors workers in Ontario would also end up with the same raises under so-called "pattern bargaining," which sees the union strike a deal on economic issues with one Big Three company that it expects the other two will match.

The CAW represents some 43,000 Big Three workers in Ontario.

The job security at Ford would come in new investments at its Ontario operations that would prevent mass layoffs from the automaker's North American restructuring plan, which could be announced by December.

Industry observers have said two of Ford's Ontario factories - a 2,700-worker site in St. Thomas that makes aging Crown Victoria and Grand Marquis sedans, and its roughly 1,500-worker Essex engine plant in Windsor - are vulnerable to downsizing or closure.

Auto analyst Dennis DesRosiers suspects Ford may promise to add the Lincoln Town Car to the production mix in St. Thomas to prevent that site's closure. The Town Car is built on the same platform as the Crown Victoria and Grand Marquis models.

Production could be shifted from a Wixom, Mich., plant, according to an industry source.

If Essex is downsized, workers there could be offered transfers to St. Thomas, DesRosiers predicts.

Hargrove wouldn't comment on the St. Thomas and Essex scenario but said a tentative deal could include "layoffs at one location and an opportunity to work at some other location."

Ford wasn't expected to comment on specifics of the negotiations until a tentative agreement is reached.

Essex could eventually close but DesRosiers suspects Ford will announce it's placing the factory "under review."

Essex largely builds engines for Ford's minivan plant in Oakville, Ont., but much of Oakville's supply will come from Cleveland after an expansion of the Oakville operations some time next year.

The analyst also noted that Ford has excess engine manufacturing operations on the continent and needs to trim that capacity.

Hargrove has said the talks with Ford have been tough yet amicable. He's warned that negotiations with DaimlerChrysler could prove much more difficult.

Hargrove said DaimlerChrysler's demands for outsourcing could result in a strike later this month by the 11,400 of the company's Ontario workers who are represented by the CAW.