Ford to Build Electric Cars in Canada as Part of Labor Deal -- 2nd Update
September 22 2020 - 5:15PM
Dow Jones News
By Paul Vieira
OTTAWA -- Ford Motor Co. has reached a tentative labor deal with
its 5,400 unionized employees in Canada that also secures a nearly
$1.5 billion investment in two plants and a commitment to build
electric cars in suburban Toronto.
The promise from the Dearborn, Mich., auto maker represents a
shot of confidence for Canada's auto sector. Factories in the
country produce roughly two million vehicles annually, but that is
down 25% from 2000 as car makers invested in lower-cost regions
such as Mexico and the U.S. Sunbelt.
The president of Unifor, Canada's largest private-sector union,
revealed the details of the Ford pact covering wages and benefits
at a news conference Tuesday. Ford's Canadian unit issued a brief
statement, saying the three-year agreement is still subject to
ratification by union members. Until ratification, the company said
it wouldn't comment further.
Unifor President Jerry Dias said the settlement, which was
reached early Tuesday, will be put to a vote by members starting
Sunday. He said the biggest accomplishment of the deal was an
investment of 1.95 billion Canadian dollars, the equivalent of
$1.46 billion, in two Ford Motor factories in Ontario -- an engine
plant in Windsor and a vehicle-assembly factory in Oakville. The
latter will be retooled to build five models of electric vehicles,
with production starting in 2025, Mr. Dias said.
Last week, Ford said it would spend $700 million to expand its
largest and oldest factory to make electric pickup trucks in
Michigan, which is next door to Ontario, Canada's most populous
province.
Canada's federal government and Ontario are expected to
contribute toward the investment package, Mr. Dias said, but didn't
disclose how much. An Ontario government spokeswoman said the
province was negotiating the terms of its contribution with Ford
and the Canadian government, and that Ontario was prepared to make
a sizable contribution.
A spokesman for Canada's minister for industrial policy didn't
address questions about a financial contribution from Ottawa. He
said the government has a record of supporting auto workers and it
would continue to do so in partnership with unions and
industry.
Canada's government is set to make investments in clean
technology -- such as batteries for electric vehicles -- a
component of its post-pandemic recovery plan to be unveiled
Wednesday. Research published this year by KPMG suggested Canada
was a laggard in electric-vehicle production, accounting for just
0.4% of global manufacturing.
Mr. Dias said the settlement, including the investment in
plants, was the result of months of talks involving Ford, Canadian
Prime Minister Justin Trudeau and the Ontario government. At the
start of negotiations with Ford, Mr. Dias said Unifor was concerned
about the future of the employees at the Oakville factory because
of the company's lack of long-term commitment to build another
vehicle there beyond the Ford Edge. "We were determined to ensure
we solidified a product for our Oakville plant. I think it is fair
to say as an organization we hit a home run," Mr. Dias said.
Mr. Dias added the agreement also secures production in Oakville
of the batteries required for the electric cars, which could add an
additional 300 jobs.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
September 22, 2020 17:00 ET (21:00 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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