Canada Autoworkers’ Strike Deadline Looms

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(Bloomberg) — Canadian autoworkers are racing “full speed ahead” toward a Monday night deadline in their own talks with Ford Motor Co., even as they prepare for the potential impact of a broader US strike.

Unifor President Lana Payne, whose union is negotiating on behalf of 18,000 autoworkers at Ford, General Motors Co. and Stellantis NV, said the current United Auto Workers strike at the three plants is having only a muted effect on Canada.

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“But the Canadian and US auto industries are very integrated, so if the strike gets bigger, for sure, we expect to see an impact here in Canada,” she said.

Unifor represents 20,000 auto parts workers – though it’s not currently bargaining on their behalf – and many of those parts are intended for the US. There’s also a non-unionized auto parts industry that would be affected, as well as engine plants in the US that feed Canadian assembly factories, and vice-versa, she explained.

Payne said her union is assessing the situation in the US almost hourly. On Friday, workers walked out of a Ford plant in Michigan, a GM factory in Missouri and a Stellantis site in Ohio, with the union pledging to add strike locations depending how bargaining progresses.

In Canada, rather than negotiating with all three major automakers at once, Unifor selected Ford as the “target” company for bargaining. A collective agreement with Ford, once ratified, will set the pattern for contracts with GM and Stellantis.

Talks with Ford began in August and the union has rejected two offers from the automaker. The contract expires at 11:59 p.m. on Monday and Unifor members voted almost unanimously in support of a strike if an agreement isn’t reached.

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The priorities for Payne’s members are pensions, wages and ensuring workers are supported during the electric-vehicle transition, including while some plants are shut to be retooled for EV manufacturing. All of those take on more urgency given Canada’s current affordability crisis, she said.

“This climate that we’re in is having an influence on bargaining right now: what is happening south of the border, but also the economic context of where we are for working people in this country,” Payne said, noting that member expectations are high. “We are bargaining our own collective agreements. We have our own priorities and we have our own members to satisfy here. So that’s our focus.”

Auto manufacturing and retail represent about 2% of Canadian gross domestic product, according to the Bank of Montreal. Prolonged strike action in the US risks pushing Canada’s already sputtering economy — which surprisingly shrank in the second quarter — into a sharper pullback, reducing the chances of further tightening by the country’s central bank.

“With Canada’s economy already on the cusp of recession, the strike could lead to a deeper downturn,” Sal Guatieri, an economist with BMO, wrote in a report to investors. “In that event, the Bank of Canada would likely refrain from further rate hikes, at least until the strike ended.”

Economists surveyed by Bloomberg say policymakers are done tightening borrowing costs, and that central bank officials will hold interest rates steady at 5% before easing in April. Traders in overnight swaps put the chance of a hike at the next meeting at less than one-third.

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