TORONTO -- Ford Motor Co. of Canada said it wants to slow down accelerating labor costs, but stopped short of saying it will seek lower wage hikes during contract talks with the Canadian auto workers union on Wednesday.
This could set the stage for tough negotiations between Ford Canada and the Canadian Auto Workers, which has warned carmakers not to seek concessions from the union in talks to renew a three-year contract agreement that expires in September.
Ford Canada, which is facing a sharper decline in market share than its rivals, said at a press conference that labor costs have risen 5 percent per year since it reached its last contract deal with the CAW in 2002.
"One of the things that we will be looking at is opportunities to slow that rate of escalation to remain competitive in a global marketplace," Stacey Allerton Firth, Ford Canada's vice president of human resources, said after initial contract talks between the company and the CAW. "We're concerned about maintaining a competitive future for our Canadian operations, so we have to look at every element of our costs and assess how they compare."
She gave no further details.
Ford reported a 19 percent drop in second-quarter profit on Tuesday, hurt by a steep loss in its North American operations, and warned that it expected its global automotive business to post a loss this year.
Ford Canada and the CAW met on the second day of talks between Canada's Big Three automakers and the union, which will pick one company in September to negotiate an agreement that will serve as a blueprint to reach deals with the other two.
CAW president Buzz Hargrove acknowledged at the press conference on Wednesday that Ford Canada is struggling more than rivals General Motors Canada and DaimlerChrysler Canada.
He said he expects the solid relationship the union has built with Ford will be tested during negotiations.
"Given the issues that face us, given the position that Ford is in, it's going to be a real challenge as to whether or not we can keep that relationship intact," said Hargrove.
"It seems like every three years that we go into bargaining that at least one of the companies is facing more difficult times than the others, and I think that's fair to describe Ford as that company this time around."
Ford, General Motors and the U.S. arm of DaimlerChrysler have seen their margins pinched by competition from Asian carmakers in the U.S. market, and a slowdown in sales of gas-guzzling sport-utility vehicles because of high gasoline prices.
The CAW represents 12,138 workers at Ford Canada.
The CAW met with General Motors Canada on Tuesday and will hold talks with DaimlerChrysler Canada on Thursday.