Ford to start talks with Canadian Auto Workers over US wage gap

Article by Anita Panait, on July 19, 2012

Ford Motor Co. will start contract negotiations with the Canadian Auto Workers union next month, in order to close the pay discrepancy between the Canadian and US operations of the auto manufacturer, a senior official of the company told Bloomberg. Ford, which employs around 7,400 workers at its five sites in Canada, currently pays $79 an hour for wages and benefits to its hourly workers in the country, which is $15 higher than what the carmaker pays for its hourly workers in the US at $64 per hour. 

Ford, as well as General Motors Co. and Chrysler Group, will begin negotiations with the CAW in August after reaching agreements with the UAW in 2011 that included profit-sharing checks instead of raises or cost-of-living pay increases.

Ford's agreement allowed the carmaker to resume paying a dividend and reclaim investment-grade credit ratings. Canada’s auto industry has been plagued by the higher value of the Canadian dollar, posting a 52 percent surge against the U.S. dollar in the past 10 years. This fiscal situation has made Canada’s plants less competitive globally. 

In April, CAW proposed a national auto policy that entailed a call for the Canadian government to intervene to lower the value of its currency as well as to negotiate "manufacturing footprint commitments" with carmakers. Ford’s senior official told Bloomberg that according to the company’s calculations, labour costs include base wages worth $34 an hour in Canada, compared with $28 an hour for senior workers in the U.S., as well as pensions and other benefits.

Topics: ford, canada

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