A Fiat Chrysler Automobiles sign is seen at the U.S. headquarters in Auburn Hills, Michigan on May 25, 2018.Rebecca Cook/Reuters
There will be face masks, no handshakes and fewer people at the bargaining tables when contract talks for Canada between the Big Three Detroit automakers and the Unifor union officially kick off in Toronto on Aug. 12. But the COVID-19 pandemic precautions are not the only remarkable features of the talks, which come amid tough questions about the futures of General Motors, Ford and Fiat Chrysler in Canada.
The union is grappling with the possible losses of jobs at Ford and General Motors plants, and the recent loss of 1,375 jobs at a Chrysler minivan factory in Windsor. The backdrop is a steep decline in economic activity due to COVID-19 that was preceded by a global drop in vehicle sales.
“We’ve got huge problems,” said Jerry Dias, president of Unifor. “We’ve got major issues with all of our assembly plants.”
The union, which represents more than 20,000 workers at the three automakers, will designate one company as its strike target and main negotiating adversary on Sept. 7, Labour Day. It has also set a possible strike date against that company in the third week of September. Bargaining with each of the three has already begun, Mr. Dias said.
The main issue for union negotiators will be securing commitments and investments in Ontario’s auto plants that will ensure they continue making vehicles. Hugely important are the electric models that are expected to account for half of global sales by 2040, up from 3 per cent now, he said.
“The key piece is, what do our plants look like in the long term?” Mr. Dias said in a phone interview. “Everybody already knows what’s at stake, including the companies, so there’s a lot of conversations already going on. But the bottom line is the global [automakers] have already announced $300-billion worth of investments for electric vehicles. And not one nickel is in Canada. If you don’t get into the investments today then you’ll likely be shut out by the future. So there’s a lot at stake right now.”
The talks are “critical” for both sides, said Joe McCabe, chief executive officer of AutoForecast Solutions in Chester Springs, Penn. He said the three traditional U.S. car makers are looking to cut costs, preferring to manufacture in countries where they sell as they move toward models that share parts globally and are, increasingly, electric.
Ontario’s big auto plants make products that are not made elsewhere – Dodge muscle cars for Fiat Chrysler in Brampton, Chrysler minivans in Windsor and Ford’s Edge crossover in Oakville. But this advantage vanishes as the manufacturers revamp their product lines, Mr. McCabe said in a phone interview.
The Canadian auto sector is centred in Ontario, and has seen production and employment plunge as manufacturers have shifted to lower-cost regions, including Mexico and the southern United States. In 1999, Canada produced three million vehicles, only to see that number decline to 1.9 million in 2019.
As Unifor negotiators try to secure new work for the Ontario factories, they face a grim outlook at the assembly lines:
- As Ford moves to a new version of the Edge that shares platforms with vehicles made elsewhere in North America, it has not signalled if anything will replace the current Edge, made at its Oakville plant, beyond 2023. Mr. McCabe, who correctly forecast GM’s shutdown in Oshawa, said the loss of the Edge could mean the end of the plant, which opened in 1953 and employs more than 4,000 people. A Ford Canada spokesman did not respond.
- At GM’s 1,100-employee power train factory in St. Catharines, some of the transmission and engine work is scheduled to end in less than three years. GM’s CAMI Automotive factory in Ingersoll, not involved in the new round of contract talks, makes the Chevrolet Equinox and employs 2,400. The Equinox is also made in Mexico. A GM spokesman was not available.
- Fiat Chrysler employs 4,600 people in Windsor who make the Chrysler Pacifica and the 2021 Grand Caravan minivans, which Fiat Chrysler spokesman Bradley Horn said will begin production later this year. The Chrysler 300, Dodge Charger and Dodge Challenger are made in Brampton, with 3,100 workers. Demand for minivans has dropped, Mr. McCabe said, as consumers buy more SUVs and crossovers.
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