Ford Motor Company F recently announced that its workers in Canada, represented by Unifor, have unanimously voted in favor of the new three-year tentative agreement between Unifor and the company. The deal encompasses Ford’s investment of $1.46 billion (C$1.95 billion) to introduce battery-powered electric vehicle (EV) production in its manufacturing facility in Oakville, Ontario, and a new engine derivative to Windsor, Ontario.
On Sep 22, the Dearborn-based automaker entered into the three-year tentative deal. This was followed by ratification meetings to consider the details of the agreement. Overall 81% Unifor members working at Ford across both trade and production facilities have willingly endorsed the agreement. In Windsor-Essex, 87% of production and 86% of skilled trade workers have agreed to the pact.
Unifor is Canada's largest private sector union, representing more than 300,000 workers across a diverse range of sectors in the country. The union is a certified bargaining agent for all working people and their rights, advocates for equality and social justice in Canada and abroad, and aims to create continuous reforms for their betterment.
Highlights of the Deal
The deal entails Ford’s investment of C$1.8 billion for re-engineering and developing new battery electric vehicles in Oakville, including a crossover utility vehicle (CUV), and C$148 million for powertrain facilities in Windsor.
The deal also includes two 2.5% salary hikes over the lifetime of the agreement and a $7,250 ratification bonus for full-time, permanent workers linked to their productivity, as well as an inflation protection bonus, along with an eight-year wage scale, and renewal of afternoon and midnight shift premiums.
Unifor has also negotiated a 20% wage differential for skilled trade workers. The union has even bargained for other benefits of the workers, including paid domestic violence leave and a racial justice advocate.
The automaker has also pledged to provide new 6.X L engines to the Windsor Engine facility and 5.0L engine assembly and current component machining to the Essex Engine plant.
The agreement is expected to set the framework for Unifor’s upcoming contract talks with other auto biggies — Fiat Chrysler FCAU and General Motors GM.
Expected Benefits from the Deal
This deal marks the single largest investment in the Canadian auto industry in years by one of the biggest automakers. It also ensures job security for the Unifor members in the upcoming years. The terms of the deal provide for progressive wages and a healthy work culture for these workers.
Moreover, the pact will help new hires climb the hierarchy ladder at a faster pace as well as create a versatile work environment.
The federal government and the Ontario government seem enthusiastic in utilizing the Oakville plant for the production of EVs, which will ensure that the facility remains operational for years, thus providing job security to Canadian workers.
Amid the heightening climate change concerns, investors are intrigued by automakers that look for solutions to lower their global carbon emissions by proving green transportation. With EVs being the hottest trend in the auto industry, Ford has vowed to become carbon free by 2050, and is making considerable strides toward achieving this aim.
Automotive Parts Manufacturers Association president Flavio Volpe has termed the above-discussed deal as “historic” as it will ensure Windsor’s involvement in the manufacturing of Ford’s electric F-150 model. Thus, this would make Windsor an integral part of the automaker’s target to revolutionize the EV space. The deal renders Ontario’s technological capability to manufacture E-gears and electric motors for Ford’s most coveted EV model.
Other renowned automakers making aggressive efforts toward an electrified future are Tesla TSLA and General Motors.
Ford currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Notably, shares of Ford have declined 28.1%, year to date, as against its industry’s rally of 124.3%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Ford Motor Company (F) : Free Stock Analysis Report
General Motors Company (GM) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Fiat Chrysler Automobiles N.V. (FCAU) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research