An auto analyst says the ratified deal for Ford employees will raise the bar during talks with General Motors and Stellantis.
Unifor members at Ford ratified a new three-year collective agreement on Sunday. The deal was approved by 74 per cent of members.
The deal includes three per cent annual wage increases over the life of the contract, a $10,000 productivity and quality bonus for active employees, pension improvements, and a $500-million investment at Windsor’s Essex Engine Plant to maximize 5.0-litre engine and machining capacity, with a forecasted third shift in 2029.
Sam Fiorani, Vice President of Global Vehicle Forecasting at Auto Forecast Solutions, says during contract talks where multiple companies are involved, you want to set a precedent.
He says that’s exactly what was done with Ford being negotiated first.
Fiorani says choosing Ford first gives the union a stronger position heading into talks with GM and Stellantis.
“Usually, like in this case, the low-hanging fruit is the first choice. So when you pick Ford, who has an established plant, they have plans for products going out into the future; it sets a nice precedent for the union, for the workers, for everybody involved on that side. When you look at the other teams, the General Motors and Stellantis, their future is a little more cloudy.”
He says setting the precedent with Ford will give Unifor leverage as it moves to companies facing greater uncertainty.
“You want to make sure that there is established product going forward so that when you go to the other companies that don’t have products locked in for the future, they can come back and say, ‘well, Ford gave us a guarantee for the next five years that they’ll have a product on this line and that they’ll have two or three shifts of workers coming in and established pay.’ It’s much easier to go with them and set the precedent.”
He says while the agreement provides stability for Ford workers, the broader industry is facing significant challenges tied to trade tensions and the evolving North American auto market over the last 60 years.
“The North American market has become more and more consolidated. We got U.S. and Canada working together. Then we added Mexico into the mix. It has become a team that has been looking towards competition around the world, and now suddenly we’re looking against each other. It’s a different time. It’s a different perspective and is unlike any time we’ve seen in at least 60 years.”
Fiorani adds that there’s still a lot of uncertainty as negotiations on a new CUSMA agreement are underway.
He adds there is also continued uncertainty as North America moves slowly compared to the rest of the world when it comes to electrification of vehicles.
-with files from AM800’s The Shift with guest host Michelle Maluske