Contracts talks between the Canadian Auto Workers and the Detroit 3 won’t start before August. But combattants are already lobbing grenades across the border. Ford of Canada told Reuters that Canada is now the most expensive place in the world to make cars.
“Right now, labor costs are higher in Canada than at any other Ford operation in the world,” Ford Canada spokeswoman Lauren More declared vis-à-vis Reuters. “When it comes to future investment, labor costs are one of the most important considerations. The 2012 agreement has the potential to either improve or erode Canada’s labor cost competitive position.”
Tough talk, and it is likely to get tougher. The parties have no common ground. Carmakers want lower cost. Unions want a share of the big profits that have been announced.
Said Ken Lewenza, president of the CAW:
“I think talks are going to be incredibly tough. The companies are being strong in their public comments. We are being equally strong.”
Including benefits, the CAW’s total average labor cost in U.S. dollars is about $60 an hour, says Reuters. “That compares with $58 for U.S. workers at Ford, $56 for General Motors and about $52 at Chrysler.”
A lot of this is created by the strong Canadian dollar. Production in Canada looked like a bargain when, a few years ago, the buck bought a loonie and 30. Now as the CAD is on the march towards parity with the greenback, that calculation doesn’t look so good.