After months of negotiations, Ford Motor Company and the Canadian Auto Workers Union Unifor have reached a tentative agreement that will increase wages, pensions, and benefits for about 5,700 Ford employees in Canada. The deal also includes a commitment from Ford to invest $1.8 billion CAD in its Canadian operations, mainly to produce electric vehicles and batteries.
Highlights of the agreement
The agreement, which was announced on Tuesday, September 19, 2023, will be voted on by the union members starting on Saturday, September 23. If ratified, the agreement will be effective for three years, until September 2026. Some of the key features of the agreement are:
- A 2.5% wage increase in the first year, followed by a 2% increase in the second year and a 2.5% increase in the third year.
- A $7,250 CAD signing bonus for each full-time employee and a $500 CAD signing bonus for each temporary employee.
- A $4,000 CAD inflation protection bonus in the third year.
- A $40 CAD increase in monthly pension benefits for current retirees and surviving spouses.
- A $1.50 CAD increase in hourly pension contributions for active employees.
- A $1.00 CAD increase in hourly health care contributions for active employees.
- Improved dental, vision, hearing, and prescription drug coverage.
- Enhanced job security provisions and layoff benefits.
Investment in electric vehicles and batteries
The agreement also includes a major investment plan from Ford to transform its Canadian operations into a hub for electric vehicle (EV) and battery production. Ford has pledged to invest $1.8 billion CAD in its Oakville Assembly Complex in Ontario, which will become the first plant in Canada to produce battery electric vehicles (BEVs). The plant will produce five models of BEVs, starting with the Ford Edge crossover in 2024.
Ford will also invest $148 million CAD in its Windsor Engine Plant in Ontario, which will produce engines for hybrid and plug-in hybrid vehicles. In addition, Ford will invest $50 million CAD in its Essex Engine Plant in Ontario, which will produce engines for conventional vehicles.
The investment plan is expected to create or maintain about 5,400 jobs at Ford’s Canadian facilities, as well as thousands of indirect jobs at suppliers and service providers. The plan is also expected to boost Canada’s competitiveness in the global EV market and reduce greenhouse gas emissions.
A win-win situation for both parties
The agreement between Ford and Unifor is seen as a win-win situation for both parties, as well as for the Canadian auto industry and economy. For Ford, the agreement will help it secure a stable and skilled workforce, reduce labor costs, and expand its presence in the fast-growing EV market. For Unifor, the agreement will help it protect the interests and livelihoods of its members, improve their working conditions and compensation, and secure their future employment.
The agreement is also a positive sign for the ongoing negotiations between Unifor and the other two members of the Detroit Three automakers: General Motors (GM) and Fiat Chrysler Automobiles (FCA). Unifor has chosen Ford as its target company for this round of bargaining, meaning that the terms of the Ford deal will set the pattern for the other two companies. Unifor hopes to reach similar agreements with GM and FCA before the end of October.
