Armed with a new collective agreement ratified over the weekend, Ford is offering a $50,000 incentive to about 1,000 employees eligible for early retirement in order to recall hundreds of laid-off workers.
“We will be offering certain retirement-eligible employees an incentive to retire from the workforce to allow our employees on layoff opportunities to return to work,” spokeswoman Lauren More said in an email.
The incentive available in the fourth quarter will also provide a voucher for a new car along with the standard pension program.
Ford has about 800 employees on layoff. It agreed in negotiations to investments that could create about 600 new jobs its assembly complex in Oakville, Ont.
A third shift will be added to the body, paint and pre-trim departments along with additional work that will create about 300 jobs. A new product will add more than 300 positions.
Ford’s Windsor operations will also receive additional machining work, generating about 35 new openings.
The collective agreement was supported on average by 82 per cent of members who participated in a ratification vote last weekend.
Recalled employees won’t be affected by lower starting wage rates. Consequently, More said it’s too early to say how much money could be saved from lower starting rates for new hires.
“Further savings will depend on how many opportunities we have in the future to utilize the new employee provisions we negotiated, as their labour rate will ‘blend’ with those of current employees,” she said.
Still, Ford said the wage and pension structure for new employees realigns labour costs to be “more competitive” with deals recently negotiated in the U.S. with the UAW.
Newly-hired Canadian workers will earn about $20 an hour, down from $24 an hour. It will take the new hires 10 years to reach the same wages as existing employees. They will also be converted to hybrid pension plans instead of defined benefit plans like current employees.
New workers in the U.S. start at US$15.50 per hour and rise to US$19.28 per hour. That’s short of the US$28 per hour top rate paid to existing employees and C$34 per hour paid in Canada.
General Motors declined to provide details about its agreement that will be voted on by about 5,500 CAW members on Wednesday.
“This set of talks with our labour partner have been candid and constructive, reflecting the challenges facing Canadian manufacturers,” stated David Wenner, general director labour relations.
Meanwhile, the Canadian Auto Workers urged its members at Chrysler to be patient as formal talks resumed Monday as the two sides try to reach a tentative agreement that avoids a costly strike.
“It’s crucial that members at all Chrysler locations stay on the job and continue working,” the union told its members in an update on negotiations.
“A failure to do so will have serious negative consequences on our ability to reach a new agreement and will greatly diminish the bargaining committee’s negotiating power.”
The union said it will give 24 hours notice of a strike if talks with Chrysler flounder. Employee tensions are high because company CEO Sergio Marchionne has been vocal about his desire for substantial contract changes and his opposition to pattern bargaining with rivals Ford and General Motors.
However, the union said tentative agreements with Ford and GM provide the framework it will follow with Chrysler.
Industry observers say Chrysler has no choice but to accept the pattern four-year agreement since it can’t afford a strike. Canada accounts for about one quarter of its global production.
“We are in a much stronger position today, with one pattern agreement ratified and another on its way. We are more confident today that Chrysler can and will meet the pattern,” the bargaining committee said.
CAW president Ken Lewenza said last week that he was hopeful an agreement with Chrysler could be reached within a few days.
University of Windsor business professor and auto expert Tony Faria said he’s surprised that the union is willing to give Chrysler “as much as this whole week” to finalize a deal.
“But it hardly matters. The final contract is going to be just about identical to GM and Ford, possibly tweaked around the very, very fringes of it but basically all major provisions identical.”
The agreement Ford workers accepted has no increases to wages or changes to pension plans for existing employees.
Each worker will get $2,000 a year in the second, third and fourth years to cover cost-of-living increases, plus a $3,000 ratification bonus.
Long-term care provisions are capped at $800 per month for new hires and the prescription drug plan is changed to end coverage of drugs that do not require a prescription for dispensing.