O, Canada: the contract negotiations. (Auto by the Numbers).
Labor contract negotiations are slated to begin in mid-July. These essentially affect over 47,000 CAW members working with Big Three facilities in Canada. Currently these members provide approximately 16% of the Big Three's North American vehicle production output, as well as 15.2% of engine and 8% of transmission assembly output. Additionally, there is selected sourcing of chassis and body components for various offerings. Depending upon when a contract is signed, it may take up to 3-4 days to ratify the contract, another day to return to work, and up to three days to refill an engine or transmission supply line. Thus, a significant impact on all vehicle and powertrain production in Canada, and other facilities supported by Canadian-sourced components, is possible given a stoppage. Although Canada continues as an important site for vehicle and powertrain sourcing, the Big Three have taken strategic steps to spread the risk between U.S., Canada and Mexico. Significant exposure still exists, though, as many fa cilities are the sole production source for popular offerings.
The three main issues (CAW concerns) to be tabled this year are Big Three facility rationalization, growth of non-CAW/UAW production, and the perennial issues of outsourcing, wages and benefits. As the Big Three rationalize facilities, Canada will lose DCX-Pillette Road, Ford-Ontario Truck, and GM-St. Therese. The CAW feels the reductions are over-reaching and Canada-centric on a broader scope, as Mexico is viewed as an outsourcing threat for vehicle and powertrain assembly. Further erosion in CAW standing comes as non-CAW/UAW vehicle production is projected to grow from 24% (CY2000) to 35% in 2007. A similar scenario exists for powertrain and component production over the time period. In short, the CAW will be looking for replacement investments, workforce and benefits maintenance, and help in organizing non-union suppliers in Canada.
By early September, a target OEM will be named. At present General Motors has the highest potential to be chosen because it has both the deepest pockets and the fewest issues with the CAW. In an aim to pattern the agreement for DaimlerChrysler and Ford, GM may relish the opportunity to again be the chosen one. DaimlerChrysler is expected to be second, and Ford is likely last on the list, as it's labor issues are more acute and potentially viewed by the CAW as the most difficult to solve.
Work stoppages or "strikes" may be all encompassing as the CAW's leader, Buzz Hargrove, is noteworthy for achieving precisely orchestrated work stoppages that affect an entire company. With this in mind, the attached sourcing matrix illustrates CSM Worldwide's view of the potential effects should the CAW strike a given OEM. Our view is not only that of production in Canada, but also of engine/transmission and component production that emanates from U.S. and Mexican sources which would also likely be affected by a work stoppage in Canada. Suppliers should be ready for any eventuality with respect to the looming talks, as our analysis outlines a 30-50% chance of some type of stoppage. Despite a stronger market, negotiators will need to think longterm, as several issues are pervasive and far-reaching. It should be an interesting fall.
GM, Ford and DCX Powertrain and Vehicle Assembly Operations Effects of a Potential Work Stoppage in Canada Estimated Total Plant Product Daily Build Rates General Motors Flint, MI 3.8L Series II V6 1800 Romulus, MI 4.3L GIE V6 850 4.8L, 5.3L, 6.0L GEN III V8 4800 St. Catherine's, Ontario 4.8L, 5.7L GEN III V8 500 Tonawanda, NY 3.1L/3.4L 60-Degree V6 2300 8.1L Mark VIII V8 450 Oshawa #1 Monte Carlo/Impala 1350 Oshawa #2 Century, Regal 1050 Oshawa Truck Silverado, Sierra 1350 Windsor, Ontario 4T40E/4T45E Transmission 3458 Other GMT800 Stampings - Ford Essex, Ontario 3.8L/4.2L V6 2200 Romeo, MI 4.6L SOHC V8 3100 4.6L DOHC V8 200 Windsor, Ontario #2 5.4L SOHC V8 2000 Oakville Windstar 1040 Ontario Truck F-Series 420 St. Thomas Crown Vic, Grd. Marquis 960 Windsor, Ontario #2 4.6L Head Assembly 100 Other Engine Castings (Aluminum) - DCX Kenosha, WI 2.7L DOHC V6 1300 Mack Avenue 3.7L V6/4.7L V8 Modular 2500 Toluca, Mexico 5.9L V8 OHV 600 Trenton, MI 3.9L V6 / 5.2 V8 OHV 500 Saltillo, Mexico 5.7L V8 Hemi 250 Brampton 300M, Concorde, Intrepid 970 Pillette Road Ram Van 210 Windsor Town & Country, Caravan 1325 Estimated Daily Volume Loss Due to a Canadian Plant Work Stoppage General Motors Flint, MI 650 Romulus, MI 55 835 St. Catherine's, Ontario 500 Tonawanda, NY 1100 70 Oshawa #1 1350 Oshawa #2 1050 Oshawa Truck 1350 Windsor, Ontario 3458 Other - Ford Essex, Ontario 1008 Romeo, MI 1007 24 Windsor, Ontario #2 100 Oakville 1040 Ontario Truck 420 St. Thomas 960 Windsor, Ontario #2 100 Other - DCX Kenosha, WI 500 Mack Avenue 61 Toluca, Mexico 62 Trenton, MI 135 Saltillo, Mexico 50 Brampton 970 Pillette Road 210 Windsor 1325 Source: CSM Worldwide
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|Comment:||O, Canada: the contract negotiations. (Auto by the Numbers).|
|Publication:||Automotive Design & Production|
|Article Type:||Statistical Data Included|
|Date:||Aug 1, 2002|
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