Ford Hails Canada Labor Pact

Source: Wall Street Journal

By MATTHEW DOLAN and JEFF BENNETT

A new three-year contract between the Canadian Auto Workers and Ford Motor Co. will allow the auto maker to manufacture some of its most popular and newest models in Canada despite rising currency values against the American dollar.

Joseph R. Hinrichs, Ford global vice president for manufacturing and labor affairs, said in an interview Monday that the Dearborn, Mich. auto maker is still committed to building cars and trucks in the markets where they would be sold despite the near parity of the American and Canadian dollars. Canada had long been seen as a cheaper place to manufacture cars and trucks because of its favorable exchange rate.

"When you look at it, currency aside, we've made a lot of progress in Canada," Mr. Hinrichs said, citing cost reductions in labor agreement that largely holds down wages, cost of living adjustments and pension contributions.

Still, the pact failed to achieve the same two-tier wage system the company secured to much acclaim in its American agreement last year. The agreement with Canadian workers establishes a wage rate calling for new employees to receive 70% of base wages during the first three years of employment before climb into the full wage scale.


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