TORONTO — Ford Canada employees have overwhelmingly endorsed a cost-cutting agreement reached with the automaker last week, the Canadian Auto Workers union and the company said Sunday.
Some of the major cost-saving measures included in the agreement are no base wage increase, eliminating the $1,700 annual “vacation bonus”, a 40-hour reduction in paid time off, and the establishment of contributions to the pension plan for new employees.
Earlier this year, the same concessions were given to Chrysler and General Motors in order to stay competitive.
The deal will also see Ford go ahead with plans announced earlier to close its 1,400-employee plant in St. Thomas, Ont., which makes full-sized cars no longer in demand.
“No one should mistake workers’ approval as satisfaction with the new agreement,” CAW president Ken Lewenza said after members ratified the deal in two days of voting.
“Members had faith in the union to negotiate the best agreement possible and protect their interests over the long term, but the problems faced by the industry cannot be resolved at the bargaining table.”
Stacey Allerton Firth, Ford-Canada’s vice-president of human resources, said the agreement was a credit to the relationship the company has with CAW.
“Both the union and the company realized that we had to work collaboratively to meet the competitive challenges facing the industry,” Allerton Firth said in a news release.
She blamed the decision to close the plant in St. Thomas on “the unfortunate reality of today’s global auto industry,” saying demand for large cars like those made at the plant has dropped significantly.
“We will do our best to support our employees through this difficult time,” she said.
It is the second cost-cutting agreement reached between the CAW and Ford in 18 months.
“Our members have been dealing with terrible insecurity as a result of financial crisis and recession and this new agreement will give a greater deal of job security right until 2012,” said Mike Vince, chairperson of the CAW-Ford bargaining committee.
The CAW represents about 7,000 Ford workers across the country.