Ford's Oakville delay will have 'wide-reaching impacts,' warns Unifor

Ford Motor Co. of Canada’s two-year delay to the start of electric-vehicle production in Oakville, Ont. will at least triple the time on layoff for the plant’s 3,200 unionized workers.

And the fallout of the major scheduling change will extend well beyond the walls of the assembly plant, as workers across the automotive supply chain continue to bear the brunt of the auto industry’s choppy transition to EVs. 

“This is a pretty huge decision with wide-ranging and wide-reaching impacts on a lot of people,” Unifor President Lana Payne told Automotive News Canada. 

The union that represents hourly workers at Ford Canada, as well as employees at more than a dozen parts companies that supply the assembly plant, was told of the decision April 2 in a meeting at Ford’s Michigan headquarters with top company officials including CEO Jim Farley, 

“Don’t go to Dearborn for a meeting. It’s never going to include good news,” Payne said. 

Ford’s initial plans for the Oakville plant, shared in April 2023, included a C$1.8-billion ($1.3 billion USD) retooling project scheduled to start in the second quarter of 2024. Production workers were expected to be off the job six to eight months as the facility southwest of Toronto was overhauled to begin building EVs by the start of 2025. 

But on April 4, the company said it would “re-time” the three-row SUVs it planned to build in Oakville until 2027. The delay will give the consumer market for such vehicles time to catch up, while allowing the company to “take advantage” of emerging battery technology, Ford said in a release.

Despite the production delay, the company will stick to its original schedule for the planned retooling project. Work is expected to start in earnest in early May, after the final Ford Edge crossovers roll off the current assembly line in Oakville.  

But the major scheduling change, which Payne called “extremely disappointing,” will extend workers’ anticipated eight-month layoff to between 2 ½ and 3 ½ years. Ford didn’t share when in 2027 it now anticipates starting EV production in Oakville, nor provide the union with a timeline.  

Regardless, the lengthy retooling project will stretch income supports the union negotiated during 2023 bargaining to the limit. 

Under the latest contract, assembly-plant workers on layoff will receive Supplemental Unemployment Benefits, or SUB, equivalent to 70 percent of their typical wages. But how long the payouts last depends on seniority. Ford workers with 20 years of service will receive SUB compensation for two full years. On the opposite end of the scale, workers with one to three years of seniority get 36 weeks of SUB. 

Payne said Unifor is focused on seeing income support for members extended for the full length of the retooling. The union has requested another meeting with the automaker “as soon as possible” to address the issue, she added. 

“Our expectation is that our members are supported through that transition.”

Without pointing to specifics, Ford Canada President Bev Goodman said the company was “committed to taking care of our valued Oakville employees.” 

“While this change requires a revision to the timeline, it will support a viable and growing future for our company, employees and dealers,” she said in a release. 

Government watching

Two levels of government, which have jointly pledged to invest C$590 million in Ford’s retooling project, are also watching the transition and worker supports closely. 

Laurie Bouchard, director of communications for Canada’s minister of innovation, science and economic development, said Ford “has made several commitments” as part of the funding it received. 

“We are working with Ford and Unifor to ensure the commitments are realized. We will ensure that the interests of the workers at the plant are protected,” she said in an email. 

Vanessa De Matteis, spokesperson for the Ontario ministry of economic development, job creation and trade, said the province has received assurances from Ford Canada that employees in Oakville “are taken care of.” 

“We hope that Ford will do everything they can to accelerate their timelines to get employees back to work as quickly as possible,” she said in an email. 

Meantime, the lengthy delay to production in Oakville means trouble at parts suppliers as well. 

Supplier concern

Brendan Sweeney, managing director of the Trillium Network for Advanced Manufacturing, which advocates on behalf of Ontario’s manufacturing industry, estimated there are around four jobs at Canadian Tier 1, 2 and 3 suppliers linked to the Oakville plant for every job at the assembly site itself. 

Not all of these supplier jobs are entirely reliant on Ford — as many suppliers build parts for multiple automakers — but the production delay could put a handful of “dedicated” mid- to large-sized plants in jeopardy, he told Automotive News Canada. 

“They can be down for a year. Can they be down for three years and expect the 150, 200, 300 people who work there to hang around? I don’t know.”

At the same time, the plant shutdown was long anticipated. While the far longer amount of down time is hardly a positive development, Sweeney said, it isn’t “devastating.”

Flavio Volpe, president of the Automotive Parts Manufacturers'​ Association, agreed. 

“What’s important here is we know it’s a delay, rather than a stopping of production or a cancelation of the program.”

While the scheduling change may come as a surprise to some, Volpe said, suppliers have an intimate relationship with Ford and have known from the outset that a 2025 start of production in Oakville would rely on critical mineral supplies, technology readiness and several other factors. 

“This is a time when your partner asks you to take a pause,” and suppliers are willing to do that, as they have confidence in the long-term prospects of the product, he said. 

Meantime, because parts companies typically have multiple automaker customers for each plant, they should be able to shift the “workforce that you want to retain into your other customer work, while you wait for Ford to restructure its hand.”