Ford Seeks Labor Givebacks to Close Canadian Cost Gap

Ford Motor Co. aims to close a US$15-per-hour labor cost disadvantage in contract negotiations that begin next month with the Canadian Auto Workers union, Bloomberg News reports.

The news service cites an unidentified senior Ford official who says the company pays $79 per hour in wages and benefits to its 4,500 CAW members compared with $64 per hour to U.S. workers represented by the United Auto Workers union.

The union disputes the wage-and-benefits total, contending that the Canadian figure includes benefits to retirees that Ford no longer covers in the U.S. But Bloomberg's source says the total also includes a wage gap between hourly pay of $34 in Canada vs. $28 in the U.S.

Canada has lost its labor cost advantage as the country's currency rose, and the CAW refused to match the UAW's acceptance of a two-tier wage system and profit sharing in lieu of pay raises.

Auto industry researcher Polk estimates Canada's share of North American output may slip to 12.6% in 2017 and 12.1% in 2022 from 15.8% this year.

Ford closed its assembly plant in St. Thomas, Ont., last September and shed 1,200 jobs when it ended production of the fullsize sedans built there. The company still has an assembly plant in Oakville, Ont., and several components factories.