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CAW, Ford reach 'impasse' on future of St. Thomas, Ont., assembly plant

TORONTO - The Canadian Auto Workers and Ford have reached an "impasse" regarding the future of a southern Ontario assembly plant in ongoing labour talks, the union said Wednesday.

TORONTO - The Canadian Auto Workers and Ford have reached an "impasse" regarding the future of a southern Ontario assembly plant in ongoing labour talks, the union said Wednesday.

"What we firmly believe is their obligation to Canada isn't there, and that's what's caused the impasse at this point," said Bob Chernecki, assistant to CAW president Ken Lewenza.

Earlier in the day, Mike Vince, chairman of the CAW's Ford master bargaining committee, said the two sides were "not having official talks right now" and the union was "prepared to get back to the table as soon as the company is."

Union officials later clarified that both sides are still in discussions regarding cost savings for the automaker, which has not taken part in massive multibillion-dollar U.S. and Canadian government bailouts that saved its rivals General Motors and Chrysler from collapse.

However, the union said Ford will have to agree to maintain its current Canadian manufacturing presence if it wants a cost cutting deal that will match earlier CAW concessions to GM and Chrysler.

Ford operates assembly plants in Oakville and St. Thomas in southern Ontario and has parts and other operations. Like other carmakers, the company has been streamlining its Canadian and U.S. workforces and shutting down some operations to deal with a shift in North American market demand.

"The manufacturing footprint is the key to being able to put an agreement together with Ford," Vince said. "That's our top priority."

Ford asked the CAW to renegotiate its current labour contract, which doesn't expire until 2011, after the union gave substantial concessions to GM and Chrysler as a condition for the broader bailout by the federal and Ontario governments.

Currently, the union and Ford are working out how much a similar agreement would save Ford in terms of labour costs, but Vince said the two sides remain "a ways apart on the numbers."

Ford was the only one of the Detroit Three automakers to survive the financial crisis on its own - and has seen its market share grow because of this - but Ford Canada president and CEO David Mondragon has said the company needs a new labour contract similar to that at GM and Chrysler to stay competitive in both Canada and the U.S.

In the meantime, little progress is being made on an agreement on the future of a Ford plant in St. Thomas, Ont., Chernecki said.

Ford spokeswoman Lauren More wouldn't comment on the details of the negotiations, but reiterated that the company has no plans to manufacture vehicles at St. Thomas beyond 2011.

Currently, the 1,600-employee plant builds the Ford Crown Victoria, the Lincoln Town Car and the Mercury Grand Marquis - all full-sized cars, demand for which is limited to niche markets. In fact, the Crown Victoria is only sold as a part of fleets, such as police cars and taxis.

Under the CAW's most recent labour contract with Ford, signed in May 2008, the company agreed to work with the union to find alternative products for the St. Thomas plant, Chernecki said.

"We believe that Ford has not lived up to the spirit and intent of that letter," he said.

"They keep saying to us the lights are going to go out in St. Thomas and we're refusing to accept that."

Ontario's minister of economic development and trade, Sandra Pupatello, has been working with the two sides to find a solution such as a joint venture with another company, similar to GM's joint venture with Suzuki at the CAMI plant in Ingersoll, Ont., Chernecki said.

The CAW has said that if Ford plans to close the St. Thomas plant, it will have to increase production elsewhere to make up for the loss of jobs, and is asking the company to maintain approximately 13 per cent of its total North American production in Canada.

"If in fact they're determined to close St. Thomas, then their footprint in Canada is at nine per cent or below and traditionally they've been at 13, 14 per cent, and that remains unacceptable to us," Chernecki said.

After months of bargaining during which the CAW reached agreements with GM, then Chrysler, and was then forced by the federal and Ontario governments to give GM even more concessions, the union agreed to slash labour costs at both companies by cutting benefits, changing pension funding obligations and creating a trust for retiree health benefits.

The issue of pension funding is an issue at Ford, too. In August, the company sent a letter to employees asking them to allow it to top up its pension shortfall over 10 years instead of five under new provincial regulations.

A valuation as of Dec. 31, 2008, shows that Ford's pension plan only had enough assets to cover 62.2 per cent of liabilities if the plan were to be wound up immediately. At that point, the plan's deficit was approximately $47.9 million on total assets of $2.9 billion, the company said.

However, More said the company is in full compliance with its funding obligations. Ford is simply asking for a longer period of time to top up the shortfall that resulted from the financial meltdown in late 2008.

"Funding levels are expected to improve as the economy improves," More said in an email.

Ford Canada employs about 7,000 people at assembly plants in Oakville, Ont., and St. Thomas, a parts plant in Windsor, Ont., and a parts depot in Brampton, Ont.

Talks between the company and the CAW began on Sept. 8.





 
 
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