July 19, 2016 / 7:22 PM / 3 years ago

New production to take priority in Canadian auto contract talks

TORONTO/MONTREAL (Reuters) - Getting automakers to commit to new vehicle models in Canada will be a top union priority when contract talks kick off with Fiat Chrysler Automobiles (FCHA.MI), Ford Motor Co (F.N) and General Motors Co (GM.N) in August, but with General Motors Co already pushing back, reaching consensus may not be easy.

FILE PHOTO -- A Chrysler Group LLC employee works on the assembly line during the production launch of Chrysler vehicles at the assembly plant in Brampton January 7, 2011. REUTERS/Mike Cassese/File Photo

A four-year contract covering some 20,000 Canadian autoworkers at Fiat Chrysler, Ford and GM expires in September.

GM’s Oshawa plant is on the verge of shutting one of its two assembly lines, with several vehicles either already produced elsewhere or expected to move in 2017.

“We’re going to have one heck of a fight with General Motors if there’s no solution for Oshawa,” said Jerry Dias, National President of Unifor, which represents the autoworkers. “Our union has absolutely nothing to lose. I’m convinced that General Motors wants to close Oshawa, and we’re not going to let them.”

GM Canada, which plans to add 700 engineering jobs, has said it will not make production decisions until after a deal is reached, noting labor costs are only one factor in deciding where to build new products.

Unifor is also looking for new commitments for Ford’s Windsor engine plant and Fiat Chrysler’s Brampton assembly, which makes the Chrysler 300, Dodge Challenger and Dodge Charger. All three are scheduled for redesign in 2018.

The union and automakers will exchange initial proposals on Aug. 10 and 11. Unifor will pick a target between Sept. 3 and Sept. 5 and focus on talks with that lead automaker. Any deal reached would then be replicated at the other two companies.

With strong vehicle sales, and a weaker Canadian dollar lowering labor costs, the automakers will be under pressure to improve pay and benefits, especially for new hires.

“While the low dollar looks like it makes Canada an attractive place to invest, given currency fluctuations, we can’t rely on this alone to drive our investment decisions,” said GM in a statement.

Ford, which has hired more than 2,000 people in Canada in the last five years, said it pays hourly employees an average of C$30 in Canada, C$28 in the United States and C$5 in Mexico.

Growth in auto production in Mexico and the United States has outpaced that of Canada.

In 2012, the union came up empty-handed in a push for new vehicle production. Their contract froze wages for existing workers for three out of four years and cut pay and pension benefits for new employees.

Fiat Chrysler declined to comment.

Additional reporting by Allison Martell; Editing by Marguerita Choy

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