DETROIT — Increased spending on U.S. production by the Detroit 3, as dictated by the labor contracts they signed last fall, is good news for the UAW, but it puts the Canadian auto union in a tougher position going into its own negotiations this year.
Detroit 3 production in Canada is expected to fall 27 percent between now and 2023, when the new UAW contracts expire, according to data released last week by the Center for Automotive Research in Ann Arbor, Mich. By contrast, the companies are expected to build 11 percent fewer vehicles in Mexico and 5 percent more in the U.S. over the same period.
That could make for difficult bargaining this fall for the Canadian union, Unifor, which has fiercely resisted the slow erosion of auto manufacturing jobs.
"They're going to be looking for guarantees of product, and there's not much left to guarantee," said Art Schwartz, a labor consultant and former GM negotiator. "Oshawa is going away; it's not coming back. That leaves a grand total of four assembly plants for the Detroit 3. That's it. [Unifor's] going to try and protect what they have."
Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research, said even if the union can't secure significant product, leaders will push hard for its members to get raises.
One thing Unifor officials are not likely to pursue: profit-sharing payments. The Canadian union has long favored lump-sum bonuses in lieu of tying compensation to the fate of the automakers.
Even if the companies were to consider such an approach, analysts predict that profits in the coming years could decline, meaning profit-sharing payments would be lower.
"The time to have ridden this roller coaster to the top was 2009," Dziczek said.
The UAW contracts will make hourly labor costs at the Detroit 3 "rise steadily" over the next four years, the center said in a new analysis of the pacts last week.