Topline
Unifor, the union representing about 5,600 Ford employees in Canada, continued negotiating with the company beyond the September 18 contract expiration date, but they are authorized and prepared to strike, making Ford the only of the three U.S. major auto manufacturers potentially facing a dual strike on both sides of the border that could significantly eat into its fourth-quarter earnings.
Unifor, the union representing over 5,000 workers at Ford plants and offices in Canada, extended … [+]
Key Facts
Up to 5,600 Canadian auto workers are preparing to strike Ford at the same time about 3,000 American auto workers have already begun striking the company at its Wayne, Michigan, plant through the United Auto Workers (UAW) union.
Though they continue to negotiate, Unifor national president Lana Payne was clear in her remarks to members of the extent and impact of a potential strike: “If there is a strike, this will be a total strike,” she said Monday, vowing “every single” union member will join the picket lines.
Ford’s Essex and Windsor engine plants in Canada produce the V-8 engines found in Mustangs, the F-150 and SuperDuty trucks; experts, such as Sam Fiorani, the vice president of global vehicle forecasting for the global automotive forecasting data firm AutoForecast Solutions, says a shutdown of these plants could be costly to Ford and delay styling introductions.
Fiorani explained that, because engines made in Canada go into 29% of the F-series trucks produced in North America, Ford could be looking at a loss of 1,000 vehicles per day and, “if the Unifor strike were to halt the delivery of engines to U.S. factories, Ford could see losses of US $10,000,000 per day when the supply runs dry.”
Although Unifor is only striking one company, Fiorani warns that an extended strike against Ford still has consequences for the other two major American car manufacturers, General Motors and Stellantis, saying a lengthy strike could lead to the shutdown of tier 2 and 3 suppliers (which provide car parts, metal, plastic and raw materials), which would “quickly hurt Stellantis and GM, even if the union does not target them directly.”
Crucial Quote
“Profitability of the F-Series is very important to Ford’s finances and the loss of those sales will put a dent in the company’s Q4 financials,” Fiorani told Forbes.
Contra
Fiorani says losses are recoverable if the strike is short and explained that Ford prepared for a potential strike by upticking inventory for the Ford Edge and Lincoln Nautilus—for which the assembly plant in Oakville (an hour outside of Toronto)–is responsible. Additionally, he says losses are recoverable if the strike is short.
Key Background
Canadian auto workers assemble up to 1.4 million vehicles for Ford, GM, Stellantis, Honda and Toyota each year, according to the country’s Innovation, Science and Economic Development (ISED) department, 85% of which are reportedly exported to the United States. ISED says the Canadian automotive industry employs about 117,200 people and contributed about $12.5 billion to the country’s GDP in 2020. Up to 98.9% of Unifor members at Ford voted in favor of a strike last month. Unifor says it has 5,680 members working at Ford assembly and engine plants, parts distribution centers and offices across Canada. In her latest remarks, Payne acknowledged that conversations with Ford were constructive, but echoed that they would be unwavering in their requests for pension improvements and wage packages. Forbes reached out to Ford for comment.
Further Reading
Auto Workers’ Contract Expires Thursday — And Detroit’s Big Three May Face Even Steeper Losses Than 2019 If They Strike (Forbes)
Source: https://www.forbes.com/sites/darreonnadavis/2023/09/19/ford-risks-losing-10-million-a-day-if-canadian-auto-workers-strike-expert-says/