jpd80 Posted June 5, 2009 Share Posted June 5, 2009 LINKFord is the only one of the Detroit Three that hasn't asked for a bailout or filed for bankruptcy in the United States, but Ford Canada president and CEO David Mondragon said the new cost-cutting labour deals at Chrysler and GM are hurting the company's ability to compete. "We are very anxious to sit down with the CAW. We need to act now to be competitive in the global auto industry," Mondragon said Friday in an interview with The Canadian Press. "We do not have a cost of productivity advantage today in Canada versus other North American jurisdictions, so we've got to bring ourselves in line, not only with our competitors here in Canada but with our other manufacturing facilities in the United States as well." In the past, pattern bargaining assured the unionized Detroit Three that a labour concession given to one of them would soon apply to them all, but that changed when governments asked GM and Chrysler to pare costs as a condition of billions in bailout loans. In Canada, GM initially reached a deal with the CAW in March that cut its labour costs by about $7 an hour, but governments almost immediately said that didn't go far enough. Threats that GM and Chrysler could vacate Canada without major labour concessions forced the CAW to sign new agreements that slashed both company's labour costs - Chrysler's by about $19 an hour and GM's by about $22 an hour. Mondragon wouldn't give details on the specific concessions Ford will request from the CAW, but it's likely it will aim to forge a deal similar to GM's and Chrysler's. Are we going to see motor companies keep going back to unions in US and Canada. Seems like they're playing the UAW and CAW off against themselves and each other. How low will this Dutch auction go on for before the unions say enough. Quote Link to comment Share on other sites More sharing options...
focus05 Posted June 6, 2009 Share Posted June 6, 2009 I don't suspect there will be another round. GM and Chrysler have reached sort of the real bottom with both unions balanced by tax incentives and other elements thanks to banruptcy. Really, the CAW is the last piece of Ford's puzzle. The UAW made its concession earlier this year, and it puts Ford about on par with the likes of Toyota and Honda. The CAW hasn't gone as far yet. But, once this last puzzle piece is in place, Ford will have done everything it can outside of bankruptcy court to lower labor costs in North America. I doubt they will want to re-open any of these negotiations until 2011. To continue making headway on costs, its next moves towards the end of the year will be more plays with equity in the stock market. I expect that the majority of cost savings from here on out will be related to the exchange of debt for equity and conversion of higher interest debt to lower interest (especially if Ford Credit is given industrial bank status). Quote Link to comment Share on other sites More sharing options...
theoldwizard Posted June 6, 2009 Share Posted June 6, 2009 How low will this Dutch auction go on for before the unions say enough. When the dust completely settles with GM and Chrysler, the UAW knows that any deal they have cut with them will have to be given to Ford to keep Ford "competitive". If the UAW balks, I suspect Billy might know a few people in the Administration who might "suggest" (arm twist) the UAW to re-open contract yet another time. Probably not until 2010. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted June 6, 2009 Author Share Posted June 6, 2009 (edited) When the dust completely settles with GM and Chrysler, the UAW knows that any deal they have cut with them will have to be given to Ford to keep Ford "competitive". If the UAW balks, I suspect Billy might know a few people in the Administration who might "suggest" (arm twist) the UAW to re-open contract yet another time. Probably not until 2010. A better plan would be to sit down with all three companies and have an industry agreement so that labor is the same price for Ford, Chrysler and GM. That wold stop the downward spiral in wages. Pensions/VEBA contributions would then become company specific and removed from negotiations. Edited June 6, 2009 by jpd80 Quote Link to comment Share on other sites More sharing options...
ehaase Posted June 6, 2009 Share Posted June 6, 2009 I question the need long-term for either of Ford's two assembly plants in Canada. The Panthers will be gone within 3 years, and I question the long term future of the Flex, MKT, Edge, and MKX. The three already being sold aren't exactly hot sellers. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted June 6, 2009 Author Share Posted June 6, 2009 ..... I question the long term future of the Flex, MKT, Edge, and MKX. The three already being sold aren't exactly hot sellers. Combined sales of almost 16,000 last month in tight times would indicate otherwise, CUVs usually carry higher retail price tags (and profit margins) than sedans. Quote Link to comment Share on other sites More sharing options...
RangerM Posted June 6, 2009 Share Posted June 6, 2009 (edited) A better plan would be to sit down with all three companies and have an industry agreement so that labor is the same price for Ford, Chrysler and GM. That wold stop the downward spiral in wages. Pensions/VEBA contributions would then become company specific and removed from negotiations. I suspect under those circumstances, you would be looking at a cartel prosecution by the DOJ. Edited June 6, 2009 by RangerM Quote Link to comment Share on other sites More sharing options...
charly Posted June 6, 2009 Share Posted June 6, 2009 I question the need long-term for either of Ford's two assembly plants in Canada. The Panthers will be gone within 3 years, and I question the long term future of the Flex, MKT, Edge, and MKX. The three already being sold aren't exactly hot sellers. What exactly qualifies as a "HOT" seller...NO ONE IS BUYING CARS, or didn't you notice? Quote Link to comment Share on other sites More sharing options...
suv_guy_19 Posted June 6, 2009 Share Posted June 6, 2009 (edited) I question the need long-term for either of Ford's two assembly plants in Canada. First, ford has more than two plants (at least 3), but the others don't make vehicles. Second, the plants in Canada are no less and probably no more useful than the plants in the US. Canadians buy Ford, Canadians build Ford. Besides, we have a nice glass house. The smoke stack begins to the assembly plant behind it. Edited June 6, 2009 by suv_guy_19 Quote Link to comment Share on other sites More sharing options...
charly Posted June 6, 2009 Share Posted June 6, 2009 First, ford has more than two plants (at least 3), but the others don't make vehicles. Second, the plants in Canada are no less and probably no more useful than the plants in the US. Canadians buy Ford, Canadians build Ford. Besides, we have a nice glass house. The smoke stack begins to the assembly plant behind it. Actually it's the paint shop in the background Quote Link to comment Share on other sites More sharing options...
ehaase Posted June 6, 2009 Share Posted June 6, 2009 What exactly qualifies as a "HOT" seller...NO ONE IS BUYING CARS, or didn't you notice? Let's see how well the Canadian built Flex and Edge do when the new Chicago built Explorer debuts . I think the Explorer will steal a lot of sales from both when it debuts next year, although I like the Flex better from the photos I have seen of the Explorer. My suspicion is that Ford will have too many crossovers. It will have 4 (Escape, Edge, Explorer, Flex) while Chevrolet gets by with just the Equinox and Traverse. I hope I am proven wrong and all these vehicles succeed. Quote Link to comment Share on other sites More sharing options...
suv_guy_19 Posted June 6, 2009 Share Posted June 6, 2009 Actually it's the paint shop in the background Oops.... Quote Link to comment Share on other sites More sharing options...
suv_guy_19 Posted June 6, 2009 Share Posted June 6, 2009 Yeah, Chevrolet is getting by just great. Quote Link to comment Share on other sites More sharing options...
SkapeGote Posted June 6, 2009 Share Posted June 6, 2009 Sup, I dunno, seems to me this is almost like when the CAW and UAW would do this is the big 3 years ago. Get one to give on a deal and the other 2 would have to follow suit. The situation is just reversed, instead of the Union's demanding more than they need, its the Big 3 demanding more than they need. But whoever said this would be the last round, you are probably right. From my position, it seems like this is just the final smooth over. Ford need the concessions and they are aggressively pursuing them, and not because of some evil reason, but because they want parity with the other guys. If they cannot match GM and Chrysler they will be in trouble. Skape Quote Link to comment Share on other sites More sharing options...
Extreme4x4 Posted June 6, 2009 Share Posted June 6, 2009 Let's see how well the Canadian built Flex and Edge do when the new Chicago built Explorer debuts . I think the Explorer will steal a lot of sales from both when it debuts next year, although I like the Flex better from the photos I have seen of the Explorer. My suspicion is that Ford will have too many crossovers. It will have 4 (Escape, Edge, Explorer, Flex) while Chevrolet gets by with just the Equinox and Traverse. I hope I am proven wrong and all these vehicles succeed. Remember that Ford has made it pretty clear, that they want to have enough entries, to fill all of their customers needs. They don't care if any particular entry is a top seller.............. as long as it is profitable. You will know which vehicles do not become profitable, when they go away. GM tries to make due with the "we will offer you these two, figure out the one that comes the closest. Otherwise, screw off," attitude. They still have nothing that competes with the Escape. Pretty pathetic. Quote Link to comment Share on other sites More sharing options...
Ralph Greene Posted June 6, 2009 Share Posted June 6, 2009 (edited) I keep reading where Union wages, and therefore labor costs to Chrysler, GM, and Ford, are now about where the wage costs are at Honda and Toyota. But there are a lot of costs associated with having a union shop over and beyond just wages. It's just not the same kind of flexible work force. Basically....I just don't see how any union shop company is really competitive with a well run non union shop....no matter so called wage parity. And especially if that non union shop is in the south, where wages are generally lower. Chrysler, GM, and Fords competition is not each other, it's foreign competition. It's innovative US start ups. It's Mexican workers, etc. Or....it's some company not even on the radar screen in the future. If I were starting a car manufacturing company somewhere in the world....I believe I could get them built for about 1/2, or less, of the posted wage rates for Chrysler, GM, and Ford. You think Roger Penkse doesn't think this way also? He needs retail sales stores....not Saturn cars. The future competition is some golf cart manufacturer who decides to sell electric city cars or something. Marketing ideas most not even considering. Unfortunately.....IMHO....if you look far into the future....I'm not sure whatever Detroit does is even material. Edited June 6, 2009 by Ralph Greene Quote Link to comment Share on other sites More sharing options...
OAC_Paint Posted June 7, 2009 Share Posted June 7, 2009 I question the need long-term for either of Ford's two assembly plants in Canada. The Panthers will be gone within 3 years, and I question the long term future of the Flex, MKT, Edge, and MKX. The three already being sold aren't exactly hot sellers. Posturing like this usually results in the opposite of what you hope to achieve Mr. Chicago. Only 3 plants have been making Ford a profit through this mess. Oakville is one of them. Our sales for May are up year over year big time,and we have a good profit margin. Relax the Taurus will do fine. Enjoy. Also as well as profit, the company actually likes Oakville. After the whole 9/11..keep America rolling thing and OTP was closed for political reasons, the company was shocked that quality was constant to the last day at OTP. Apparently when plants are slated for closing in the US no one gives a sh@t about quality and they build crap for the last month or two as well as stealing everything that's not nailed down from the plant...that's what the yellow jackets from Detroit have to say anyway. Quote Link to comment Share on other sites More sharing options...
wildosvt Posted June 7, 2009 Share Posted June 7, 2009 I keep reading where Union wages, and therefore labor costs to Chrysler, GM, and Ford, are now about where the wage costs are at Honda and Toyota. But there are a lot of costs associated with having a union shop over and beyond just wages. It's just not the same kind of flexible work force. Basically....I just don't see how any union shop company is really competitive with a well run non union shop....no matter so called wage parity. And especially if that non union shop is in the south, where wages are generally lower. Chrysler, GM, and Fords competition is not each other, it's foreign competition. It's innovative US start ups. It's Mexican workers, etc. Or....it's some company not even on the radar screen in the future. If I were starting a car manufacturing company somewhere in the world....I believe I could get them built for about 1/2, or less, of the posted wage rates for Chrysler, GM, and Ford. You think Roger Penkse doesn't think this way also? He needs retail sales stores....not Saturn cars. The future competition is some golf cart manufacturer who decides to sell electric city cars or something. Marketing ideas most not even considering. Unfortunately.....IMHO....if you look far into the future....I'm not sure whatever Detroit does is even material. You hate union's. So no matter what changes are made it won't make you happy. Quote Link to comment Share on other sites More sharing options...
theoldwizard Posted June 7, 2009 Share Posted June 7, 2009 What exactly qualifies as a "HOT" seller...NO ONE IS BUYING CARS, or didn't you notice? Thank You ! Sometime I wonder what planet some of these people live on. There is sort of a auto mini-mall just down the road from me. 3 out of 4 dealers will be closing. One is a Mazda/Subaru, so it is not all American. Only the Ford dealer will survive. I think your going to see a big spike in unemployment for June, July, August and September as the auto plant shutdowns and teacher/school layoffs hit. The recession marches on. Quote Link to comment Share on other sites More sharing options...
Ralph Greene Posted June 7, 2009 Share Posted June 7, 2009 You hate union's. So no matter what changes are made it won't make you happy. I don't hate Unions. I know that Union members are hard working folks with families to house, feed, and educate, just like the rest of us. This is not really a problem caused by individual Union members nor can they individually be a solution. I also understand how Unions became powerful. The comparative advantages of location (cheap shipping) and large pool of cheap labor heavy manufacturing enjoyed in the Northern midwest 100 years ago also created many unfair, dangerous, and uncaring labor conditions. But those times are past, and those advantages are gone. I just don't see how any business with a Unionized labor force can compete with the competition of the future. I say again....I don't see their long term competition as each other. In the long run, I don't think it matters much about the CAW contract. Sure....pattern it after the recent GM and Chrysler give backs. Quote Link to comment Share on other sites More sharing options...
Pioneer Posted June 8, 2009 Share Posted June 8, 2009 After the whole 9/11..keep America rolling thing and OTP was closed for political reasons OTP was not closed for political reasons, but if that is the reason that gets you to sleep at night, then keep on believing. Quote Link to comment Share on other sites More sharing options...
Pioneer Posted June 8, 2009 Share Posted June 8, 2009 Only 3 plants have been making Ford a profit through this mess. Oakville is one of them. Oh, and you have to let me in on the other two that are making all the money. Since profit isn't broken down by plant or product line, at least to everyone outside the boardroom, I sure would like to know how you can back any of this information up too. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted June 8, 2009 Author Share Posted June 8, 2009 Unbelievable, the motor companies now have union competing against union. Quote Link to comment Share on other sites More sharing options...
Pioneer Posted June 8, 2009 Share Posted June 8, 2009 Unbelievable, the motor companies now have union competing against union. It's plant against plant, actually. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted June 8, 2009 Author Share Posted June 8, 2009 It's plant against plant, actually. Well that is a very sad state of affairs when, one plant's workers consider their "worth" as more than other plants. Surely, that the opinions of a vocal few and not representative of the collective opinion. Quote Link to comment Share on other sites More sharing options...
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