The Canadian Auto Workers may have reached an agreement with Ford, but the struggle isn’t over yet. Chrysler and GM are going over the deal between the CAW and Ford to see if they can match the numbers—and if they can’t, the threat of a strike might actually carry itself out.
Ford was the first company the CAW reached out to, as the union believed that it would be the most receptive of the three companies. They reached an agreement on Monday regarding a single wage structure: newly hired workers will start with 60 percent of a full wage, and reach the top in 10 years, instead of 6. Ford will demonstrate this by adding 600 jobs to its plants, where it plans to build the next-generation Edge and Lincoln MKX. (The Flex, above, is built in Ford’s plant in Oakville, Ontario.)
The strike deadline for GM and Chrysler ended Monday too, but both parties chose to use more time to hash things out. GM and Chrysler want a separate wage structure for new workers, similar to the contract they have with America’s auto workers in Detroit. The situation is even more complicated by the fact that GM is willing to move production back to the States in order to avoid further dealings with the CAW. Here, GM has the upper hand—its Spring Hill plant in Tennessee, which used to famously build Saturns, could come back online again.
And Chrysler? The CAW has to deal with the fiery-tempered Sergio Marchionne, who has rarely been known to mince his words. He is saying one of two things: 1.) if the union strikes, Chrysler will move production out of Canada, possibly to lower-cost Mexico; and 2.) there needs to be a labor cost parity between Canada and the US. Over the past 10 years, the Canadian dollar has risen in value 60 percent against American currency, negating any effective “toonie” and “loonie” jokes.
Likewise, “we have agreed with the CAW to extend the agreement,” Chrysler said in a terse statement. “We are currently reviewing the tentative agreement that has been reached with Ford.”
All parties are in a stalemate right now: if the CAW gets what it wants, with GM and Chrysler falling in line with Ford, then the auto workers will go back to work. But if GM and Chrysler end things by threatening to pull out of Canada, then, well…we get the scenario outlined earlier. We hope it doesn’t come down to that.