Unifor's Dias mulls Ford or FCA as next target; details of GM agreement emerge
Unifor President Jerry Dias said today there is no definitive timetable as to when he will select the union’s next negotiating target, as details about the tentative pact with GM begin to emerge.
Dias, speaking with Automotive News today, said he will sit down with both Ford Motor Co. and Fiat Chrysler Automobiles to discuss the economics of Unifor’s deal with GM before deciding which company to negotiate with next. That signals a shift for Dias, who early Tuesday said he would pick his next target within 24 hours.
He reiterated the union’s top priority in negotiations with Ford and FCA will be securing investments at key plants, just as it was with GM. He said the union aims to secure the product footprint at FCA’s Brampton assembly plant and will demand Ford commit new products to its Windsor engine plants.
“We need an engine for Windsor, that’s for damn sure,” Dias said.
GM and Unifor reached a tentative deal on a new labor contract this week in Toronto, just minutes before workers were set to strike. The deal, subject to ratification on Sunday, secures investments and new products at two GM plants and wage increases in exchange for a defined-contribution pension plan for new hires.
The GM deal, should it be ratified, will set the pattern for subsequent contracts with Ford and FCA.
Chris Taylor, president of Unifor Local 200, which represents about 1,500 Ford employees in Windsor, Ontario, said he is feeling “really good” after Unifor struck the tentative deal with GM.
“That bodes very, very well with us for our discussions with Ford,” Taylor said. “It tells me we should be successful.”
He’s said he is looking for a high-volume engine product in Windsor but said Ford has told the union there are no plans for a new engine program at this point.
“Whatever it is, it needs to be substantial with a lot of jobs tied to it,” he said.
Taylor said there are 240 members on layoff in Windsor. He said the Essex Engine Plant, which builds the 5.0-liter V-8 engine, has plenty of vacant floor space to house a new product, while the Ford Annex Plant, where parts for the 5.0-liter, 6.8-liter and 2.7-liter engines are machined, has redundant equipment that can be removed to make way for new work.
Unifor plans to use those facts as incentives to lure work to Windsor during negotiations.
“They would not have to build any new facilities,” Taylor told Automotive News Canada today.
Ford passed over Windsor in 2014 when it chose Mexico for a new small-engine plant, a $2.5 billion investment that will create 3,800 jobs in Mexico.
Taylor said Ford could have given that work to Windsor by using the empty space at Essex Engine Plant and adding a small expansion.
Windsor has been bleeding Ford jobs for years. Union membership there peaked in the early 2000s, when 6,300 hourly workers were employed at six plants.
Unifor also faces a key battle in Brampton, where Dias is seeking to secure products and investment in FCA’s assembly plant there. The plant, which builds the Chrysler 300, the Dodge Challenger and the Dodge Charger, is seen as “up in the air” by Dias.
FCA CEO Sergio Marchionne raised eyebrows earlier this year when he suggested the next-generation 300 could be produced on the same platform as the Pacifica minivan, potentially resulting in a shift in production away from Brampton and toward Windsor, where the van is assembled.
Meanwhile, details about the GM contract are beginning to emerge. According to a report from The Globe and Mail in Toronto, workers at GM’s Oshawa, Ontario, assembly plant would install interiors on unfinished SUVs from Arlington, Texas, under the deal; the SUV product has not been identified. It would also extend production of the Cadillac XTS, which is already built at the plant.
Unifor President Jerry Dias would not confirm the report, nor did a GM spokesman.
The product commitments would represent a significant victory for Unifor in negotiations with GM. Dias repeatedly vowed to secure product and investments at Oshawa, which previously had no products slated for it beyond 2019.
Under the deal, the plant’s consolidated line, which builds the Chevrolet Equinox, would close as scheduled in 2017. Oshawa’s flex line will be outfitted to support production of the unidentified SUV, in addition to the XTS.
Investments at the plant will total $400 million Canadian, according to the Globe and Mail. Dias said the investments will make Oshawa the only assembly plant in North America that is able to produce both cars and light trucks.
“I’m feeling great” about the deal, Dias said. “I’m really happy for our members in Oshawa who, frankly, dodged a bullet.”
It is unclear which SUVs would be shipped to Oshawa. GM’s Arlington assembly plant produces the GMC Yukon, Cadillac Escalade, Chevrolet Suburban and Chevrolet Tahoe. Shipping unfinished SUVs to Oshawa could give GM the flexibility to boost production of them as SUV, crossover and pickup sales continue to rise in North America.
The deal also includes millions of dollars in investments at the St. Catharines plant, which builds transmissions and V-6 and V-8 engines for 12 GM models. Under the deal, GM would shift some engine production from Mexico to St. Catharines, a key victory for the union in an era marked by investments south of the U.S. border.
In exchange for the investments and wage gains, new hires would be put on a defined-contribution retirement plan under the deal.
Dias, who framed the retirement-plan change as the tentative deal’s only significant drawback, said the concession reflects economics realities in North America. He said Canadian auto workers were “the last standing” with defined-benefit plans and said GM hadn’t hired in Canada over the last four years in large part due to the pension plan.
“It boiled down to if we wanted the investment, then the (defined-benefit) plan had to go,” Dias said.
While legacy workers will remain on their current plans, the pension plan for new hires could potentially result in significant cost savings for GM. About 95 percent of workers at St. Catharines are eligible for retirement, Dias said, while more than half of Oshawa workers are eligible. That means a large share of workers at the plants could soon be on new defined contribution plans in the coming years.
Legacy workers at the plants will remain on their current pension plans, Dias said. The pension concession follows one the Canadian Auto Workers, Unifor’s predecessor, made in 2012 negotiations, when the union agreed to put new hires on a “hybrid” pension plan that includes both defined-benefit and defined-contribution plans.
Dias called the deal’s economic provisions “fair” but said he “would’ve liked more” from GM.
“But once we solidified the investments, it would’ve been hard” to justify a strike, Dias said. “… For me to strike over nickels, it just wouldn’t make sense.”
Dias said he has been in touch with various government offices at the federal and provincial levels, including Prime Minister Justin Trudeau’s office, to discuss potential financial aid for the Detroit 3 automakers.
In a Tuesday statement, GM said it will “be working with government on potential support.”
The Canadian government has reportedly been discussing changing the Automotive Innovation Fund from a loan-based system to a grant-based system. Changing the fund to a grant-based system is seen as a way to make it more effective in encouraging investment in Canadian plants.
While any changes to the fund have yet to be announced, Dias said Unifor’s agreement with GM does not hinge on government support.
“The agreement is only predicated on my members ratifying it,” Dias said.
While Dias said his “best guess” is that Unifor would have struck a similar deal with GM even without potential government aid, he said having friendlier governments under Trudeau and Ontario Premier Kathleen Wynne aids Unifor in its quest for investments.
About 3,900 GM workers will vote on whether to ratify the deal on Sunday.
Greg Layson contributed to this story.