Ford Picked bv CAW as Target Automaker in Labor Talks

Ford Motor Co. (F) was chosen by the Canadian Auto Workers as the target for contract talks leading up to tomorrow’s strike deadline, with the union saying the company offers the best prospect among U.S.-based automakers for an agreement.

Negotiations will intensify between the Toronto-based union and the Dearborn, Michigan-based company to avoid a strike by 11:59 p.m. Toronto time tomorrow, when the current labor contract expires. The union will focus on discussions with Ford and work around the clock, Ken Lewenza, the union president, said today.

“Right now we are feeling good that we can get a deal, provided Ford continues to respond as they have in the last couple of days,” Lewenza said today at a press conference in Toronto. “Ford moved forward. But bargaining is fluid. That confidence could be shaken in an hour from now.”

Union negotiators intend to use the terms of an accord with Ford as the basis for agreements to be negotiated with General Motors Co. (GM) and Chrysler Group LLC. Lewenza has said he will resist concessions on wages for existing and new members in the talks, and reiterated today his preference for a deal.

“If we have an agreement at Ford, which we’re trying to get done a couple of hours before the deadline, and we share it with Chrysler and General Motors and they can live with the framework of that agreement, we will not go out on strike,” Lewenza said.

Loonie’s Surge

The Canadian dollar has risen about 60 percent in the past 10 years, making manufacturing more expensive in the country. The CAW accepted a pay freeze and gave up bonuses and time off along with other concessions as part of the restructuring that brought GM and Chrysler out of bankruptcy in 2009.

Ford has “a strong track record of working collaboratively with the CAW,” Stacey Allerton, vice president of human resources at the company’s Canadian unit, said in an e-mail. “We are confident that, working together, we can find innovative solutions to help build a successful future for our Canadian operations.”

GM looks “forward to continuing our discussions with the CAW,” Adria MacKenzie, a spokeswoman for GM Canada, said today in an e-mail. “We are focused on working with our CAW partners to reach an agreement that will improve GM Canada’s competitive position for the future.”

Chrysler’s Reaction

Chrysler is “very concerned by the CAW decision,” LouAnn Gosselin, a spokeswoman for Chrysler Canada, said in an e-mail. Ford isn’t “in the best position to take on this role.” The e- mail cited Ford’s “significant reduction” in Canada. Ford closed a vehicle-assembly plant in Ontario last year.

The union’s latest proposal includes a new “wage progression program” and aims to contain fixed costs while allowing the company to improve productivity, Lewenza said without being more specific. Under the current agreement, new employees start at 70 percent of the top wage and take six years to reach it.

A union goal is to secure commitments from the companies to invest in Canada, Lewenza said.

“When the companies look at future investment, labor is a piece of the pie,” he said. “We want to make sure that our piece of the pie jumps out and says: ‘Come to Canada.’”

The CAW represents about 18,000 employees at GM, Ford and Chrysler in these negotiations. The union accepted a pay freeze and gave up bonuses and time off along with other concessions as part of the restructuring that brought GM and Chrysler out of bankruptcy in 2009. GM was the last carmaker to be hit by a strike in Canada, in 1996.

A walkout “is the last tool in the bargaining toolbox,” Lewenza said. “Our job is to get a deal. I’m not anxious to shut down Chrysler. I’m not anxious to shut down GM. In fact, I’m anxious to build cars so they show more profit and we’re in a better position in three years.”

To contact the reporter on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net

To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net; Jacqueline Thorpe at jthorpe23@bloomberg.net; Ed Dufner at edufner@bloomberg.net

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