Canadian auto workers reach tentative contract with Ford

Detroit – The union representing Canadian auto workers has reached a tentative three-year contract agreement with Ford Motor Co. of Canada to build five new electric vehicles at a factory near Toronto, securing the future of the plant and marking what union leaders say is the first major investment in electric vehicles in Canada.

The deal was reached early Tuesday after an all-night bargaining session, Unifor President Jerry Dias said at a news conference.

"Today is a historic day," said Dias. "Today is a day where we not only talk about solidifying the footprint of the auto industry here in Canada for the short term, but more important it's an announcement about the long term."

The tentative pact includes $1.95 billion Canadian ($1.46 billion) in factory investments at Ford’s three Canadian factories that employ about 5,400 workers.

Most of the money will go to an assembly plant in Oakville, Ontario. The first electric vehicle will start rolling off the assembly line in 2025 with production of the fifth starting in 2028, according to Unifor.

The Oakville plant’s current products, the Ford Edge and Lincoln Nautilus, will go out of production in 2023.

Canada’s federal government on Monday had told Ford it’s willing to provide as much as $500 million Canadian ($376 million) to bring electric vehicle production to Oakville.

Engine plants in Windsor also will get a new 6.8-liter engine. Dias says the deal includes assembly of batteries for the new electric vehicles.

"Ford of Canada and Unifor have reached a tentative agreement on a three-year national labour contract covering nearly 5,400 unionized employees in Canada," Ryan Kantautas, vice president of human resources for Ford of Canada, said in a statement. "The agreement is subject to ratification by Ford-Unifor members. To respect the ratification process, Ford of Canada will not discuss the specifics of the tentative agreement."

Fiat Chrysler is next up for negotiations, followed by General Motors. Dias said he’s confident in reaching agreements with both, but said the talks will be difficult.

Unifor has indicated one of its goals will be to secure a plan for GM's Oshawa plant northeast of Toronto, which the automaker transitioned from an assembly plant to a stamping facility. The agreement to change the plant's use rather than closing it saved 300 of 2,600 jobs.

The union is also looking for investments in GM's St. Catharines plant near Niagara Falls, where two powertrain programs are expiring.

Unifor will seek new investments for FCA's Windsor plant and Brampton plant near Toronto. The union has said it will push for at least one new product commitment for Windsor, in order to restore the third shift there. FCA cut that shift after ending production of the Dodge Grand Caravan minivan, resulting in 1,500 job losses.

Earlier this month, Unifor selected Ford as the lead company with which it would negotiate. The contract it strikes with the Dearborn automaker will serve as a pattern for its negotiations with FCA and GM. 

Dias has said the union selected Ford because leaders felt the future of the Oakville facility was the most pressing issue at hand for their members: "We were determined to ensure that we solidified a product for our Oakville plant," he said Tuesday. "I think it's fair to say today that, as an organization, we hit a home run."

The negotiations come after the United Auto Workers last year secured $20 billion in investments for U.S. auto plants. 

That is why Unifor opted this year to seek three-year agreements, so in the future it would be in talks with the automakers at the same time as the UAW.

Dias has said securing electric-vehicle programs is be crucial to the future of the Canadian auto industry: "To date, there has been over $300 billion of announcements globally as the auto industry starts to transform from internal combustible engines to battery electric vehicles. Up until today ... not one nickel has been allocated to Canada. But with today's announcement, that changes."

The significance of Ford's EV investment goes beyond Oakville, he said: "It starts the discussions about the supply chain and the jobs that are created that will follow this type of an announcement."

Collectively, the Detroit Three now operate just four assembly plants in Canada. 

Unifor represents 9,000 workers at FCA, 6,300 at Ford, and 4,100 at GM. The contracts under negotiation this year cover about 17,000 workers.

The Associated Press contributed.

jgrzelewski@detroitnews.com

Twitter: @JGrzelewski