Auto industry retools

Sector rebounds with new investments, renewed push by organized labour
By Sabrina Nanji
|Canadian HR Reporter|Last Updated: 02/20/2015

In Canada, the auto industry has long been a delectable slice of the economic pie and, for union leaders, it has been a breeding ground in which to cut their teeth. The automotive sector’s past is a storied one of hard-fought contracts and tough negotiations. 

So when the Great Recession hit in 2008, both sides of the bargaining table had to reach a deeper understanding than that provided in a collective agreement. 

Since then, economic forecasters have noted the industry is on the rebound — and however slight that uptick may be, it has already begun to manifest in the employment relationship. Here’s a look at some of the trends related to the auto industry the editors of Canadian Labour Reporter ( covered in the last year. 

Pattern bargaining task force

When the Canadian Auto Workers (CAW) merged with the Communications, Energy and Paperworkers to become Unifor, it didn’t take long for the new body to flex its muscle and attempt to grow the practice of patterning bargaining.

Earlier this year, Unifor announced a new task force devoted to pursuing a pattern bargaining model across the auto parts industry. Previously, the tactic has successfully been applied at the Big Three (Ford, General Motors and Chrysler). 

Such a rubric would include standardizing provisions such as wages, recall rights and employment conditions across similar employers.

While the union toasts the pattern model as a bastion of standardization and consistency, legal labour experts are a bit more wary. 

“Theoretically, there is more predictability,” said David Amyot, a labour lawyer on the automotive file at McTague Law Firm in Windsor, Ont.

“But the reality is employers have their own unique set of circumstances, whether it be financial or employment, which pattern bargaining probably wouldn’t take into consideration as much as those employers would want it to.”

Though the auto parts industry may be a long way off from legislated pattern bargaining — akin to the industrial, commercial and institutional (ICI) construction contracts in Ontario — only time will tell if the auto parts industry will follow the lead of the Big Three when it comes to collective agreements. 

Chrysler investments

Not only did the economic downturn affect dealings at the bargaining table, it has also affected investment and development. In the spring of 2014, Chrysler said it would go ahead with a major redevelopment — regardless of whether the Ontario and federal governments would provide financial assistance. 

Then, the company abruptly withdrew its funding request for $700 million of the $3.6 billion it had planned to invest at two Ontario plants — one in Brampton and one in Windsor — after the issue became a political hot potato. 

Now, the automaker is in the midst of a $2-billion investment at its assembly plant in Windsor — home of the minivan. The plant, which employs more than 4,500 workers, is in the midst of a 14-week shutdown and is scheduled to come back on line in late May. As of press time, Chrysler hadn’t revealed any investment plans for the plant in Brampton. 

Toyota unionization

An investment of a different nature, again in Ontario, did not go as initially planned. For years, the Toyota plants in Woodstock and Cambridge have weathered certification drives: The International Association of Machinists and Aerospace Workers attempted and failed in 2008; the CAW was equally unsuccessful in 2009.

This past year saw Unifor step into the ring again, initially reporting it had 40 per cent of union cards signed — the number required for a certification vote. But the union put off the vote after the company said 7,500 bargaining unit employees would be eligible — almost 1,000 more than Unifor initially believed.

The latest numbers indicated Unifor had about 3,000 of the votes, union president Jerry Dias said at the time, saying he remained confident certification would happen.

Wage hikes at Ford, right-to-work laws in Michigan 

South of the border, signs are pointing to a more fruitful labour relationship. At Ford, for instance, the company announced its intention to raise pay for new hires by US$19,000 a year, or 50 per cent. 

The two-tier wage system, where a veteran autoworker would make more than his entry-level counterpart, had been agreed to by the United Auto Workers (UAW) when all automakers were taking a hit and before GM and Chrysler received federal bailouts from the United States government. 

Ford said a two-tier wage system eased financial pressures and allowed the company to hire and invest in plants in recent years. 

With the U.S. Labor Department reporting union membership as down slightly, Michigan has seen the sharpest drop — from 16.3 per cent in 2013 to 14.5 per cent in 2014. The decrease came in the first full year after the state enacted right-to-work laws. 

With contracts between the UAW and Detroit automakers expiring at the end of this year, Michigan will be the place to watch for all stakeholders in the labour game.

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