Automotive News Canada - August 2023 - 27

* AUGUST 2023
27
Inflation, EVs are new wrinkles for Detroit Three talks
CONTINUED FROM PAGE 1
ers and their U.S. counterparts in the
UAW will be bargaining simultaneously.
The UAW's contracts with the automakers
expire Sept. 14, four days before Unifor's.
Before the official handshake
ceremonies in downtown
Toronto began the latest
round of talks, Automotive
News Canada interviewed
NEWS
ANALYSIS
insiders about how each automaker was
positioning itself to bargain with Unifor.
FORD
The automaker aims to " draft a blueprint "
that will steer the company
through the transition to EVs while " recognizing
the hard work " of staff at Ford
plants and distribution centres.
Balancing these two goals, among other
priorities, will be the challenge for both
the company and union as contract talks
progress, said a senior Ford Canada official
speaking on background.
" There has never been an easy round
of collective bargaining ... so this is going
to be a challenge, and it's going to be complex.
But I'm confident that we can find a
way through it. "
Unifor represents nearly 5,700 workers
at Ford plants in Canada, including
the Oakville Assembly Complex southwest
of Toronto and two engine plants in
Windsor, Ont. Production workers at the
plants earn an average of $36 per hour,
not including pension or retirement benefits,
while new staff start at $24.15 an
hour, the company said.
While Ford must make the shift to EV
UNIFOR MEMBERS
BY FORD FACILITY
TOTAL: 5,680
* Oakville Assembly Complex: 3,400
* Essex Engine Plant, Windsor: 1,000
* Annex Engine Plant, Windsor: 900
* Bramalea and Paris, Ont.,
parts distribution centres: 120
* Casselman, Ont., parts distribution
centre: 100
* Edmonton parts distribution
centre: 100
* Windsor office and clerical: 40
* Bramalea office and clerical: 20
Source: Unifor
Unifor President Lana Payne toured Brampton Assembly Plant in July with
Stellantis North America COO Mark Stewart, who praised the union for helping end
a dispute with Ottawa over incentive funding for the automaker's new battery plant
in Windsor. PHOTO: DAVID KENNEDY
production cost-competitively, the outlook
in Canada remains positive, the Ford official
said.
" If you look at the vantage point that
we're at right now as the Canadian automotive
industry, with where we stand
with everything going on in the global
marketplace, I feel really good and really
bullish about the future of Canada. "
On April 11, the company pledged to
spend $1.8 billion to retool Oakville to
build EVs as well as add a battery-pack
production line.
The Ford Canada official did not delve
into the details of how the company plans
to address Unifor's priorities but acknowledged
the challenges workers face.
" It has been a tough environment in
recent years between [the COVID-19 pandemic],
between the economic pressures
with inflation, with housing prices, and
that's something the entire industry is
having to reconcile. " A counterbalance
to high levels of inflation is " something
that's going to be on the table through
these negotiations, " the official said.
From the automaker's side, the official
pointed to competitiveness and the role of
new technology as among the top areas of
emphasis.
" Over the course of this agreement,
we're going to need to talk about how we
work, how our best competitors are working;
and we're going to need to work as
they do, or better, to make sure that we
continue to grow these jobs. "
GENERAL MOTORS
Between reopening its Oshawa
Assembly Plant after a short-lived closure,
starting up Canada's first large-scale EV
plant in Ingersoll, Ont., and pushing into
battery-material production in Quebec,
GM Canada has retooled and expanded its
UNIFOR MEMBERS
BY GM FACILITY
TOTAL: 5,780
* Oshawa Assembly complex and
Stamped Products unit: 3,100
* CAMI Assembly in Ingersoll: 1,500
(part of a separate collective agreement)
* St. Catharines Propulsion Plant:
1,100
* Woodstock, Ont., parts distribution
centre: 80
Source: Unifor
Canadian footprint considerably since the
last round of contract talks with Unifor in
2020.
The string of big-ticket investments is
expected to alter the bargaining dynamic
between GM and Unifor, from a focus on
product allocation in past years to contract
economics and local plant issues in 2023,
said a source with knowledge of the matter,
speaking on background.
GM Canada employs about 4,300 Unifor
members in Oshawa, St. Catharines and
Woodstock, Ont., whose contracts expire
Sept. 18. An additional 1,500 Unifor members
work at GM's CAMI Assembly plant in
Ingersoll under a separate collective agreement
that ends in 2024.
According to the wage grid released by
Unifor after 2020 bargaining, production
workers under Unifor's main agreement
with GM start at $24.26 per hour today.
With eight years of seniority or more,
wages rise to $37.33 per hour.
While GM is expected to pursue an
agreement with Unifor that keeps the
company competitive, it will also look to
reward employees for their contributions,
the source said.
As with other automakers in Ontario,
GM is transitioning to EVs. CAMI began
building electric BrightDrop delivery
vans late last year, while the company
announced plans in February to begin
building EV motors at the St. Catharines
Propulsion Plant no later than 2025.
Meantime, GM has given no indication
whether production of internal combustion
engine pickups in Oshawa will end in the
near future.
STELLANTIS
Unlike UAW President Shawn Fain,
who publicly threw Stellantis' early bargaining
proposals in a trash can on a live
video stream, Unifor President Lana Payne
is taking a more diplomatic approach.
On July 21, Payne, along with Unifor's
auto bargaining team, toured Stellantis'
Brampton Assembly Plant alongside Mark
Stewart, the automaker's COO for North
America.
Speaking with reporters following several
stops on the plant floor, Stewart said
Stellantis' recent battery-plant deal with
the Canadian and Ontario governments
will secure the company's footprint in the
country for the next 80 to 100 years. He also
credited Unifor for helping end the sevenSEE
STELLANTIS NEXT PAGE
UNIFOR MEMBERS BY
STELLANTIS FACILITY
TOTAL: 8,230
* Windsor Assembly Plant: 4,500
* Brampton Assembly Plant: 3,200
* Etobicoke (Ont.) Casting Plant: 220
* Mississauga, Ont., parts distribution
centre: 105
* Windsor Assembly Plant fire and
security: 60
* Windsor office and clerical: 60
* Brampton office and clerical: 40
* Red Deer, Alta., parts distribution
centre: 30
* Etobicoke office and clerical: 15
Source: Unifor
Automakers are using incentives to offset rising finance costs
CONTINUED FROM PAGE 4
midsize pickups that are popular.
" When [pickup] payments started
to become $1,300 a month on 84-month
financing packages, ... clearly [sales]
slowed. "
The average transaction
price of all new vehicles sold
in Canada through the first
six months was about $49,500,
up about three per cent over
the same period last year.
SALES
ANALYSIS
JULY STATS
JULY STATS
P29
But incentives were also up, at $4,000
compared with $3,000 a year ago.
" This is almost entirely a reaction
to what the Bank of Canada has
done to control inflation, " Karwel said.
" Manufacturers have been absorbing
some of that increase. They know what's
going to happen to payments. It's not so
much because of a drop-off in demand. "
The average monthly new-vehicle payment
in Canada for the period stands at
about $875, up about $100 over last year.
" Most of that is because of an increase
in financing, " Karwel said.
JULY SALES 18.8 PER CENT BELOW 2019
Demand for new vehicles continues to
be strong, and inventory is slowly building.
Most automakers still reporting
monthly saw July sales increase compared
with the same month in 2022.
DesRosiers Automotive Consultants
estimates that automakers sold 140,942
new light vehicles in July, up eight per
cent from 130,480 a year ago.
" There is still significant ground to
cover in order to return to pre-pandemic
levels, " DesRosiers said in a news release.
" July new light-vehicle sales in 2019
reached 173,519 units sold, meaning July
2023 remains 18.8 per cent behind.
" However, the market continues to
show consistent promise, even outside of
numbers. The automaker sold 5,133 vehicles,
up 63 per cent over July 2022 and
down just half a per cent from 2019, when
it sold 5,159.
While pickup sales were down in the
first half of the year, smaller cars
were up. The Honda Civic posted a
three-per-cent sales increase for the
period. PHOTO: HONDA
the spring selling season. "
Sales have increased in nine consecutive
months, DesRosiers said.
Of the brands reporting monthly, only
Subaru could justifiably say it is back to
normal, with July sales closest to its 2019
In the latest AutoForecast Monthly,
analyst Sam Fiorani of U.S.-based
AutoForecast Solutions wrote that sales
are steady. He raised concerns, however,
over potential strikes by Unifor in
Canada and the UAW in the United States
as Detroit Three bargaining began this
summer.
" Manufacturers are upping their production
plans for the summer to keep
inventory levels adequate in the fall, but
this may not be enough to keep sales from
sagging in [the fourth quarter], " Fiorani
said.
" Like in the U.S., Canada could be influenced
by a labour strike in the last quarter
of 2023. But anticipating that issue, the
forecast for sales this year remains at 1.64
million units. " - ANC
Automotive News Canada - August 2023

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