High inflation was key to a handful of strikes in Ontario’s auto parts sector this spring and could prompt further contract disputes across the industry. Unifor, which represents thousands of workers at Canadian suppliers, also said more plants are likely to unionize as employees seek higher wages to offset increases in living expenses.
Inflation behind auto strikes and calls for wage hikes
Unifor sees the ballooning cost of living as triggering more clashes at supplier plants
HIGH COST OF INFLATION
Business leaders’ expectations for wage growth outpace those of workers.
- Canadian business leaders expect to raise wages 5.8 per cent over the next 12 months.
- Private-sector workers expect wages to grow 2.9 per cent over 12 months.
- Businesses are increasing wages to retain and attract workers.
- Nonwage compensation such as vacation and remote-work offerings are more generous than they were before the COVID-19 pandemic, businesses say.
Source: Bank of Canada, Business Outlook Survey, Survey of Consumer Expectations
Recent strikes at Util Canada in Vaughan and both THK Rhythm Automotive and Autoneum in Tillsonburg, were a reaction to rising costs for food, fuel and other necessities, said Shane Wark, who leads the automotive file at the union as assistant to the national president.
“[With high inflation], workers are, in my mind, rightfully demanding higher wages, and their expectations have gone up as a result,” Wark said.
Compared with May 2021, consumer prices were up 7.7 per cent. It’s the largest year-over-year increase since 1983, according to Statistics Canada.
As long as inflation stays high, Wark said, both union and nonunion workers are going to “demand more in terms of wages, and that may lead to more disputes.”
CAN’T KEEP UP WITH COSTS
So far, Wark said, Unifor negotiators have typically come away from the bargaining table with deals that please union members. But securing concessions from employers that match worker expectations has not been easy, he said.
“It’s really tough trying to meet the inflation target with the wage demands, but we’re doing the best we can.”
In some instances, Wark said, union leadership has taken workers out on strike to get a fairer deal. In other instances, members have turned down initial agreements, leaving the union to initiate a strike to try to improve the next settlement.
Employers recognize that “they’re going to have to offer higher wages than they otherwise would in a low-inflation environment,” Wark said, but suppliers remain “very resistant” to raising pay.
In this environment, he said, collective bargaining pays dividends for workers. “I don’t see many nonunion auto parts companies just handing over large wage increases,” Wark said.
GOOD REASONS FOR RAISES
Although Unifor has about 120 bargaining units in the auto parts sector, unionized workforces are more the exception than the norm among Canadian suppliers. Nonunion staff make up 85 per cent of the supplier workforce in the country’s parts sector, said Flavio Volpe, head of the Automotive Parts Manufacturers’ Association (APMA).
To Volpe, that skew indicates that “parts suppliers are thoughtful and fair employers.” Many, he said, have already been raising wages for two key reasons.
“One, you want to make sure your employees have a proper living wage. An employee that’s worried about the bills is not going to be good for business in any case.
“And then No. 2, there is such a labour shortage out there, there’s increased competition to fill positions.”
APMA members are seeing wage pressures across the board, from entry-level to management roles, Volpe said.
Parts makers are not the only employers struggling to find workers. The Canadian unemployment rate reached a record low of 5.1 per cent in May.
SCHEDULES CAN’T FLEX
Meantime, the rise of hybrid work environments has put suppliers at a disadvantage, Volpe said.
“[Employees] can’t work from home in manufacturing. So, while some industries might be able to succeed in their [compensation] package with a flex schedule, we can’t. That is making for a lot of very, very busy HR directors in automotive.”
The abrupt return of high inflation could also lead to long-term changes.
Wark said he expects Unifor’s organizing department to be fielding additional calls from employees at nonunionized workplaces.
“I think workers are going to recognize … if they really want to be able to make any sort of important inroads or progress at their own workplace,” he said, “I think they’re going to come to the recognition that they’re going to have to do that through collective bargaining.”
CORRECTION: A previous version of this story misidentified the location of a Unifor strike. While members working for Pilkington Glass in Whitby rejected an initial tentative agreement, the employer came back with an offer that was accepted without a strike.