Canadian Auto Union to Negotiate Labor Pact With Fiat Chrysler -- Update
September 22 2016 - 4:29PM
Dow Jones News
By Christina Rogers
The union representing Canada's auto workers will turn to Fiat
Chrysler Automobiles NV next to negotiate a new four-year labor
contract, aiming to win pay raises and factory investments similar
to the ones secured earlier this week in a proposed agreement with
General Motors Co.
Unifor, the country's largest private-sector union, has been
bargaining with Fiat Chrysler, GM and Ford Motor Co. since August
for the new labor deals that will help protect Canada's auto
manufacturing sector amid a surge in new factory investment flowing
to Mexico, where labor costs are far cheaper.
Fiat Chrysler, employing 9,750 hourly workers in Canada, is one
of the country's largest auto makers with two large assembly plants
in Ontario, producing high-profile models such as the Chrysler
Pacifica minivan.
Separately, Unifor said it would hold a vote Sunday for factory
workers at GM to ratify a new tentative deal reached Monday that
secures "hundreds of millions of dollars" in new investment from
the U.S. car maker and pledges to keep open a vehicle assembly
plant in Oshawa, Ontario, beyond a potential 2019 closure.
In a statement, Unifor President Jerry Dias reiterated that
securing new factory investment from Fiat Chrysler will take
priority. "We have one simple message for all the Detroit auto
makers: there will be no deal without commitments to new
investments in Canada," Mr. Dias said.
Analysts say this round of talks will be critical to preserving
Canada's auto manufacturing sector, which has been in decline since
the late 1990s because of rising labor costs. Failure to secure new
factory pledges from the Detroit car makers could precipitate the
move of auto-parts suppliers out of the country.
Today, Canada is among the most expensive countries in the world
to build cars and the highest-cost market for car assembly in the
North American free trade zone.
Fiat Chrysler recently invested $2 billion to retool its factory
in Windsor, Ontario, to build the next-generation minivan but the
company's plant in Brampton, Ontario, is in need of a costly new
paint shop to secure its longevity. The company makes several large
car models in Brampton, including the performance Dodge
Challenger.
The U.S.-Italian auto maker is in the midst of a massive
overhaul of its manufacturing facilities in North America, where it
is phasing out production of low-margin cars to boost output of
more profitable sport-utility vehicles and trucks.
The shuffle will include sending at least one U.S.-built Jeep
model to Mexico, where Fiat Chrysler has two factories, and moving
truck production from one aging plant in Michigan to a more
recently upgraded facility.
Chief Executive Sergio Marchionne said earlier this month the
onus will be on the union to make a business case for investing in
Canada, after previous attempts to win government support became a
political football during the 2014 election season.
A tough and seasoned negotiator, Mr. Marchionne is known for
taking direct involvement in union negotiations. During Fiat
Chrysler's talks with the United Auto Workers union last year, he
took a seat at the bargaining table and led negotiations, often
working late nights to reach a deal.
Mr. Dias, for his part, has made clear that he is willing to
take his workers on strike if new factory work can't be
secured.
The tentative agreement reached with GM gives blue-collar
workers pay raises and converts roughly 700 temporary workers to
full time. However, it also includes some retirement concessions.
Specific details on the GM pact won't be released until after union
members have voted on the proposal Sunday.
Write to Christina Rogers at christina.rogers@wsj.com
(END) Dow Jones Newswires
September 22, 2016 16:14 ET (20:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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