Detroit automakers, the union will open negotiations against the background of prices, CUSMA review
Against a backdrop of US tariffs hitting local auto manufacturers, uncertainty linked to upcoming trade talks and the “infiltration” of Chinese electric vehicles into Canada, the union representing nearly 19,000 Canadian auto workers says it is preparing for the most important labor negotiations in its history.
Negotiations between Unifor and the Detroit Three automakers will begin Monday in Toronto as their current agreements expire on September 20.
Unifor, which often uses pattern bargaining in its auto sector negotiations, will meet with Ford Motor Co. first, as it did three years ago. Negotiations with Stellantis and General Motors are expected to follow.
The decision by Canada’s largest private sector union to target Ford reflects the “difficult” conditions the industry is currently facing, said Unifor national president Lana Payne.
Unifor will launch this year’s contract negotiations with the Big Three automakers in June, starting with Ford, then using the agreement reached as a model for negotiations with General Motors and Stellantis. It comes at a time of turmoil in the auto industry, as costs and uncertainty loom. CBC Windsor’s Emma Loop reports.
Auto workers were facing “unprecedented uncertainty” in the ongoing trade war, he said, and there was little sign that a resolution was imminent, despite the looming July 1 deadline to formally extend the Canada-United States-Mexico deal.
“This is the most important auto negotiation round we’ve done in our history, and I say knowing that we went through the global financial crisis in 2008-2009 where two of the automakers, it wasn’t a guarantee that they would survive,” Payne said in an interview.
The federal and Ontario governments spent billions bailing out Chrysler and General Motors after the financial crisis, when the automakers appeared to be on the verge of collapse.
“But this is … on a much larger scale, I would say, if we can resolve the tax situation and find a way forward here with the CUSMA review, it will have a huge long-term impact on the Canadian auto industry.”
He called Ford “the most stable employer” of the three since U.S. tariffs on the industry began last year, citing Ford’s engine plants in Ont., which “were not missed” at the time, and the company’s ongoing $5 billion investment in its operations.
Speaking to reporters on Wednesday, US President Donald Trump considered terminating the Canada-US-Mexico Agreement, while at the same time suggesting he might ‘sign’ the trilateral agreement. “It’s not holding, it’s going to be cut,” Trump said. ‘I consider it to be out of date soon.’ The agreement will expire in 2036 if not renewed before then.
25 percent off all US-built cars and trucks, and their parts, remain in place. CUSMA-compliant auto and truck parts are not currently subject to that amount.
“As a union we cannot sit idly by and wait for those conditions to improve,” said Payne.
“All of this is going to be a big challenge, but negotiation does one thing for us. There are a lot of things out of our control right now. Negotiation is one thing we have control over.”
When it comes to union priorities, job security is key.
Both General Motors’ Ingersoll and Stellantis’ Brampton assembly plants remain idle. The union says nearly 6,500 jobs will be lost in the auto manufacturing sector by February 2025, citing Statistics Canada data.
Meanwhile, the Detroit Three faced new competition after the federal government opened the door to Chinese-made electric vehicles. In an agreement announced earlier this year, Ottawa pledged to reduce its 100 percent tariff on Chinese EVs to 6.1 percent, for an annual volume of 49,000 vehicles.
“Obviously wages and pensions are important to how we can improve the quality of life of our members and they are the best, there’s no doubt about it, but job security and investment in our industries is important right now,” said Payne.
Finance and National Revenue Minister Francois-Philippe Champagne confirmed Friday that $464 million will build gas-powered heavy-duty trucks at Ford’s Oakville, Ont.
For Ford, both stability and flexibility are important as it faces a changing environment, as it says rising costs, new competitors and changing product demand are reshaping its thinking about potential investments.
The company said its $5 billion in spending, most of which it has already committed to, includes a major overhaul of its Oakville, Ont., plant to support the launch of its Ford Super Duty trucks. Funding also went into Ford’s first stamping plant in Canada, which he said will provide jobs for 100 workers in the area.
Other pieces of funding have been allocated to Ford’s Windsor facilities, including its Essex engine plant which was expanded to support production of the 7.3 liter engine line.
Ford said he hopes those ties, along with his long-standing relationship with the union, can be a basis for negotiations.
But while a union win would mean securing strong product-sharing commitments for the three companies, it could face a tough road getting there, said Ryan Robinson, head of auto research at Deloitte.
The CUSMA review will play an important role at the negotiating table, he said, but manufacturers should prepare for many different outcomes given the possibility that one will appear in the short term. That includes a potential scenario where manufacturers must meet stricter requirements for a vehicle to qualify for CUSMA compliance.
Robinson added that if tariffs survive the CUSMA review, an outcome that seems likely, it will be a “very tough sell” for manufacturers to increase the allocation of their products to Canadian plants.
“It all depends on how comfortable the Detroit Three are when the CUSMA negotiations are resolved,” Robinson said.
“For the manufacturers, I think it’s about having that luxury that they can make money building cars or distributing cars in their Canadian manufacturing facility. And that’s a big question right now.”
In 2023, Unifor’s negotiations with the Detroit Three led to an agreement that saw production workers’ base wages increase by nearly 20 percent, along with a long list of other improvements including pensions, job security, a fast track to retirement, bonus pay and more vacation days.
At the time, the union entered the negotiations in a strong position, said Larry Savage, a professor of labor studies at Brock University. This cycle, tends to negotiate “from a position of relative weakness” due to external pressure.
“That makes it very difficult for the union to make a consistent strategy,” said Savage.
“As a result, I think it is unlikely that Unifor will get the same benefits it was able to win in the last round.”
The heated debate at the G7 saw Prime Minister Mark Carney talking to US President Donald Trump about Canada’s deal to import Chinese electric vehicles. Carney was heard reassuring Trump about the limited number of cars coming in.
Savage said workers should prepare for “intense” negotiations, which could include “credible threats” by their employers to move production to Canada. As Chinese EVs may increase low-cost competition in the Canadian auto market, Savage said he downplays the union’s ability to use strikes as a potential tool to protect new investment or job guarantees.
“I think it’s going to be a very difficult round of bargaining for Canadian auto workers,” he said.
Payne acknowledged the difficult task ahead, but said the union believed it could “do our part” at the negotiating table.
“We are not in a situation where we say we accept approval,” said the president of the union.
“The truth is that this tax problem cannot be solved by allowing work. It is much bigger than that. It has to be solved at the negotiating table between Canada and the United States.”
