The Canadian Auto Workers named Ford Motor Co. as its target company for contract negotiations, countering widespread speculation that DaimlerChrysler AG would be the union's chosen mark.
Ford's Canadian unit, Ford Motor Co. of Canada Ltd. was picked to set the pattern for a new labour agreement. The union's current three-year contract expires September 20 and members will walk off the job if an agreement isn't reached by 11:59 p.m. EDT.
The union said, however, that if it is unable to reach a tentative agreement by next Tuesday, they will begin negotiations with DaimlerChrylser.
Union president Buzz Hargrove made the announcement at the Fairmont Royal York hotel in Toronto.
DaimlerChrysler had been widely anticipated to be named as it is in the best financial shape of the three Detroit-based auto makers. Ford was seen as less likely because its two assembly plants are running at less than capacity — about 50 per cent in the case of a minivan factory in Oakville, Ont. — and its Canadian operations are in the weakest position of the three companies.
Once an agreement is reached with one company in so-called pattern bargaining, the other auto makers traditionally meet the same economic terms as their rivals.
This set of negotiations could, in fact, be among the most difficult since Mr. Hargrove took over the reins of the CAW in 1992.
Overhanging the talks is the steady loss of market share the three companies have experienced since the last set of talks in 2002. Their share is now dropping toward the 50-per-cent level and the Chrysler group is the only one that has been able to hold its own in North America this year — thanks mainly to the cars that roll out of Brampton.
Ford and GM are both losing money on their North American automotive operations.
GM has been involved in intense negotiations with the United Auto Workers union about health care costs and faces the spectre of a potential bailout of its former auto parts subsidiary Delphi Corp.
Ford has warned that it will announce a restructuring plan some time this fall. It is likely to include plant closings, with industry sources warning that the auto maker's Essex engine plant in Windsor, Ont., is in danger of being closed.
Shares of Ford slipped 9 cents to $10.04 (U.S.) on the New York Stock Exchange while General Motors fell 17 cents to $32.83. DaimlerChrylser slipped 43 cents to $51.65.
© The Globe and Mail
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