This is from Reuters.
Although the CAW members ratified the Ford contract it was not by a large mention. Only 67 per cent voted in favor. There is not much to cheer about in the contract but then the North American automakers have little to cheer about either. There should be pressure on GM and Chrysler to cut a deal as well or they could be left even further behind.
WRAPUP-Ford adds Canada production under union contract
Mon May 5, 2008 8:07pm EDT
By John McCrank and David Bailey
TORONTO/DETROIT, May 5 (Reuters) - Ford Motor Co (F.N: Quote, Profile, Research) has agreed to build another vehicle at a key Canadian plant under its new union contract, a person familiar with the agreement said on Monday, a move that steps up pressure on GM and Chrysler.
Canadian Auto Workers members ratified a new three-year contract with Ford on Sunday that the union plans to use as a pattern for still-pending negotiations with General Motors Corp (GM.N: Quote, Profile, Research) and Chrysler LLC [CBS.UL].
Under the agreement, Ford Canada will add production of an unspecified fourth vehicle at its Oakville, Ontario, assembly plant sometime during the three-year contract, which takes effect in September, an industry source told Reuters.
Ford Canada spokeswoman Lauren More would not comment on new production plans for Oakville.
Ford builds the Ford Edge and Lincoln MKX crossovers at Oakville and is set to produce the Ford Flex crossover for release this summer. Ford plans to hire up to 500 new workers to increase production in Oakville for the crossovers.
The union and Ford reached the three-year agreement in April, shocking industry analysts by reaching a new contract almost five months before the current one expires.
CAW President Buzz Hargrove said on Monday he expected GM and Chrysler Canada to follow the pattern set by the Ford deal.
"We believe General Motors will meet this pattern, and they'll see it, as Ford did, once they understand it as a very very major step by our union to try to assist them with the problems the companies face," Hargrove told reporters.
Hargrove said the CAW will not sign an agreement with GM, where 15,000 workers are represented by the union, unless it includes new investments in the company's plants in Windsor, Oshawa and St. Catharines, all of which are in Ontario.
If GM rejects the pattern, Hargrove said the union would likely start talking to Chrysler Canada, which employs 8,000 CAW members. The CAW will meet Chrysler officials on Tuesday to try to set a date to start contract talks.
The agreement with the CAW comes as investors show increased confidence in Ford, which posted a $2.7 billion loss in 2007 but bounced back to post a surprise first-quarter profit of $100 million. The automaker holds its annual meeting Thursday in Delaware.
Billionaire investor Kirk Kerkorian has taken a stake of just under 5 percent in Ford, stoking expectations among other investors for a faster turnaround by the No. 2 U.S. automaker.
SAVINGS FROM CANADA
Ford's new agreement with the CAW avoided adoption of a two-tier wage system of the kind agreed to by the United Auto Workers in its bargaining with Ford, GM and Chrysler in 2007, but it generated savings in other ways, executives said.
"We are confident that the overall collective agreement, as struck, makes our Canadian operations competitive," said Stacey Allerton Firth, lead negotiator at Ford Canada.
As part of the savings, Ford will outsource work considered "noncore" at its Oakville plant, Firth said.
The CAW also agreed to changes that create 30 more minutes of production per 24 hours at the Oakville plant and to other productivity changes, Ford's global head of manufacturing, Joe Hinrichs, said in an interview.
Ford has not disclosed its potential savings from the new three-year contract covering about 8,900 CAW-represented workers that was ratified over the weekend. The union has said it would save the automaker hundreds of millions of dollars.
"Based on previous agreements, it certainly saves a lot of money," Hinrichs said, declining to give a dollar figure.
The CAW agreed to a wage freeze, no pension increases or lump sum payments, no cost-of-living increases until the end of 2009 and for workers to take on more health care costs. It also gave up one week of vacation for a one-time C$3,500 bonus.
Ford agreed to extend the life of its St Thomas, Ontario, plant by a year to 2011, but has made no further commitments to products at the plant beyond the life of the new contract.
Ford is committed to producing a new five-liter engine at its Windsor plant, conditional on financial support from the Canadian government and the Ontario provincial government.
The government of Ontario has said it would support the venture, but the federal government has not committed funds.
(Editing by Phil Berlowitz)
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