Canadian Vehicle Industry Confronting Huge Difficulties As Contract Negotiations Start With Detroit 3

Powerful Canadian union group Unifor begins contract talks with the Detroit Three in what will be a closely watched development. The existing contract expires on September 19. Auto workers in Canada already made more than their U.S. counterparts.

The month-long arrangements will include every one of the three of the Detroit-based automakers. Talks open in Toronto with General Motors of Canada, while discussions with Ford and Fiat Chrysler open on Thursday. The union says its top priority in these discussions will secure new production for Canadian plants.

“There will be no deals with any of the companies without commitments from each of them for investments in Canada,” said Unifor national president Jerry Dias.

The fate of a GM plant in Oshawa, Ont., for instance, has been clouded in uncertainty since the company moved production of the Camaro to a plant in Michigan.

“We have to find a solution for Oshawa or there will be no agreement,” Dias told a news conference Wednesday afternoon, saying Unifor will be looking for a commitment on new production for GM facilities in Oshawa and St. Catharines, Ont. “There will be no agreement until we have solidified the footprint in Canada.”

There are inquiries, as well, about the fate of Ford’s motor plant in Windsor, Ont. In 2014, it lost a key motor contract to a Mexican plant. Unifor is additionally agonized over the eventual fate of a Fiat-Chrysler get-together plant in Brampton, Ont.

GM said in a statement that it was looking forward to its talks with Unifor. “These negotiations are an important first hurdle in building a business case for future investments in Canada,” the automaker said. “This business case will also include other partners, such as government, suppliers and our communities.”

The Canadian auto division has lost 53,000 employments in the most recent 15 years, according to the Automotive Policy Research Center, as work moved to plants in Mexico and the southern U.S.

Dias, who will lead Unifor’s transactions, says laborers consented to concessions amid the 2008-09  financial crisis and now “deserve to reap the rewards,”contending that industry benefits are solid and automobile sales are at record levels in North America, making it “the ideal time to invest.”

“The union has come up with a very large laundry list,” says Marvin Ryder, a marketing professor at the DeGroote School of Business at McMaster University. “There’s no way they’re going to get all of this.”

Ryder says multinational car companies have a lot of choice about where they can make their cars, meaning the automakers will be in the driver’s seat during these talks.

Unifor was formed in 2013 by the merger of the Canadian Auto Workers and the Communications, Energy and Paperworkers unions. This will be Unifor’s first set of auto contract talks. It represents 23,000 workers at the Detroit Three in Canada.

The union says it will choose one company in early September to set the pattern for deals with the other two. Existing contracts expire in just 40 days, on Sept. 19, putting the parties in a potential strike/lockout position after that date.