Unifor releases details of new pact with Ford with wage, pension improvements

Unifor, the Canadian autoworkers' union, says its new three-year deal with Ford Motor Co. "delivers in a very big way" on members' priorities around pensions, wages and working in the electric-vehicle transition, with top-scale workers poised to see their wages increase more than 19% over the life of the agreement.

The deal includes the single largest negotiated general wage increase in Unifor and the Canadian Auto Workers union history, with increases of 10% the first year, 2% in the second year and 3% in the third year, plus cost-of-living adjustments. The pact also reduces the time for in-progression employees to reach top scale from eight years to four years and raises the percentage of top-scale pay those workers receive in years 1-3.

As an example, a new hire's wage would rise from $24.26 per hour in Canadian dollars to $29.67 per hour in the first year of the pact, an increase of 22.3%.

Over the life of the agreement, senior employees would see their hourly rate rise from $37.33 Canadian to $44.52, an increase of 19.2%. The Canadian dollar is equivalent to 74 cents in U.S. currency.

The deal affects 5,600 Ford workers at three Ontario plants: Oakville Assembly in Oakville, and Essex Engine and Windsor Engine, both in Windsor across the river from Detroit. Workers at distribution centers are also affected by the agreement. Voting on the deal started at 10 a.m. Saturday and ends at 10 a.m. Sunday.

"To respect the ratification process, we will not discuss the specifics of the tentative agreement," Ford spokesperson Said Deep said in a statement to The Detroit News. The details of the deal were released as members of the United Auto Workers entered the ninth day of a strike at selected facilities of Ford, General Motors Co. and Stellantis NV.

On Friday, UAW President Shawn Fain said its made progress in talks with Ford and spared the company from a strike expansion that hit crosstown rivals Stellantis NV and General Motors Co. Workers at Ford's Michigan Assembly in Wayne remain on strike. They've been on picket lines since the UAW contract expired with Ford at 11:59 p.m. Sept. 14.

Even if the Unifor deal has historic gains for its Ford members, experts say those folks will still be watching what UAW members get.

"It's the best contract we've seen in the Canadian auto sector for quite some time. But will it be enough given that UAW members are seemingly holding out and fighting for more south for the border? I don't know," said Larry Savage, a labor studies professor at Brock University in Ontario. "I think Shawn Fain will be the elephant in the room at the Unifor ratification meetings, whether Unifor likes it or not."

But, Savage added, "there is a lot of money on the table. And that makes it much harder for workers who are struggling to vote down the agreement."

Beyond significant wage gains, the Canadian union won a new investment for its Essex Engine plant. Ford will add additional capacity to support production of the 7.3-liter V-8 engine there. Facility upgrades at Essex should start in late 2025 with the launch planned for the first quarter of 2028.

Ford agreed to renew its commitment to no closures of facilities over the life of the agreement. It also recommitted to its plans of transforming Oakville Assembly into the Oakville Electric Vehicle Complex. In April, the Dearborn automaker said it would invest $1.3 billion (1.8 billion Canadian dollars) to transform the plant to assemble multiple EVs and battery packs. Details have not been released on which vehicles will replace the gas-powered Ford Edge and Lincoln Nautilus midsize SUVs currently built at Oakville.

Ford's plan is to launch the first EV at Oakville in 2025.

To support the transition to electric vehicles, Unifor negotiated with Ford "special transition measures," which focus on Ford's Oakville plant. The measures, which will be in effect during the plant's upcoming retool period and up to eight months after layoff, focus on income security in the transition.

Unifor was also able to negotiate cutting the time it takes to reach the top wage rate in half to four years.

Other wage gains include:

• A special skilled trades adjustment in the first and third year of the contract.
• Skilled trades workers will receive two additional wage adjustments: a 2.75% adjustment in year one — on top of the 10% general wage increase — and 2.5% in year three, which is on top of the 3% general wage increase. They will go from $44.77 to $55.97 an hour by the end of the agreement.
• A cost-of-living increase of $1.21 per hour upon ratification with additional adjustments in year two and three of the agreement up to a maximum of $2 over the life of the pact.
• A $10,000 productivity and quality bonus paid to each full-time employee (not including temporary part-time workers) at ratification — marking the largest productivity and quality bonus the union has ever negotiated.
• Eligible temporary part-time workers will receive a bonus of $4,000 on the Monday following ratification.

The union notes a "key achievement" was to improve pension security for members since there have been no negotiated increases to pensions at Ford since 2005. Workers hired after Nov. 7, 2016, who have a defined contribution plan will be rolled into the College of Applied Arts and Technology defined benefit plan, a multi-employer fund.

Marick Masters, a business professor at Wayne State University, called the Unifor-Ford deal "an impressive win for the workers."

He added that the agreement "bolsters the case the UAW is making for improvements in its potential agreement with Ford. Although the bargaining environments and legal systems differ across Canada and the U.S., the unions on both sides of the border face similar challenges with common objectives to secure jobs, improve workers' economic lot, and expand union representation in auto manufacturing."

Fain on Friday noted some of the proposed contract improvements the union received from Ford so far including: the previously-announced move to bring workers at Ford's Rawsonville Components Plant and Sterling Axle Plant onto the same wage scale as assembly plants workers; the restoration of the cost-of-living adjustment that was suspended in 2009; and, for the first time, the right to strike over plant closures.

Fain also said Ford has agreed to new job security provisions, including guaranteeing income security for up two years, with healthcare, for laid-off workers. He also cited improvements to the profit-sharing formula Ford has offered but did not mention any movement on wages; the latest known offer from Ford was a 20% wage increase over the length of the contract.

While there's pressure on Unifor to ratify this contract amid the UAW's intense talks, a ratified deal in Canada with Ford is likely to put pressure on the UAW.

"If the Ford-Unifor deal is ratified, Ford may try to use the agreement to whipsaw the UAW into settling," Savage said.

"Pressure will flow in both directions. There's no question about it."

khall@detroitnews.com

Twitter: @bykaleahall

Staff Writer Jordyn Grzelewski contributed.