Ford and Canadian Auto Workers Edge Closer to Settlement

Strategic Insights -

Talks between Ford Motor in Canada and the Canadian Auto Workers (CAW) union have improved, with a settlement now possible as a strike deadline looms. Despite initial anger over Ford's initial wage and benefits offer, the union leader, Buzz Hargrove, is now optimistic about the chances of avoiding a shutdown. The CAW is seeking significant pay and benefits increases over the next three years, mirroring the deal reached between the United Auto Workers (UAW) and DaimlerChrysler in the US. The new US contract includes a 3 per cent annual wage increase and a US$1,350 signing bonus, setting a precedent for future negotiations.

Key Takeaways:

  • The negotiations between Ford and the CAW have improved, with a 65 per cent chance of avoiding a shutdown, according to Buzz Hargrove, the union president.
  • Ford initially offered a 1 per cent annual increase in each year of a three-year contract, as well as a C$500 lump-sum payment in the first year.
  • The company reconsidered its offer after union anger and put forward a new proposal on Sunday, the terms of which remain undisclosed.
  • The CAW is seeking significant pay and benefits increases over the next three years, following several years of record profits in the motor industry.
  • The new US contract between the UAW and DaimlerChrysler includes a 3 per cent annual wage increase, a US$1,350 signing bonus, and a clause pledging "neutrality" over union efforts to organize workers at former Daimler-Benz plants.
  • The UAW is still negotiating with Ford and GM, although talks with the latter are thought to be further advanced.

Statistics:

  • 65 per cent: Chance of avoiding a shutdown of Ford's operations in Canada, according to Buzz Hargrove.
  • 1 %: Annual increase in wages offered by Ford in each year of a three-year contract.
  • C$500: Lump-sum payment offered by Ford in the first year of the contract.
  • 3 %: Annual wage increase in the new US contract between the UAW and DaimlerChrysler.
  • US$1,350: Signing bonus in the new US contract between the UAW and DaimlerChrysler.
  • 13,000: Number of car workers represented by the CAW union at Ford.
  • 1,300: Estimated number of workers eligible for union membership at the Mercedes plant in Alabama.
  • 1999: Year in which the negotiations were taking place.

Sources:

  • Financial Times Limited, Copyright 1999, All Rights Reserved.