The Canadian Auto Workers union is proposing a dramatic plan designed to preserve jobs at a Ford plant in southwestern Ontario and lead to the building of another one nearby.

The union proposal calls for the construction of a new plant that would be built and operated by auto parts giant Magna International on land owned by Ford.

"We can do this work in Canada," CAW President Buzz Hargrove told CBC News.
(CBC)

This new plant would be located next to Ford's existing Talbotville assembly plant near St. Thomas, Ont.   

"The 'Way Forward' plan that [Ford] announced last January … included an opportunity for a new plant to build an entry-level vehicle," CAW president Buzz Hargrove told CBC News.

"So what we've done is put together a proposal that shows we can do this work in Canada … and we can do it cheaper with this model than they can do it in the United States or Mexico."

'We've tried to make it as attractive as possible': Hargrove

The new plan would involve some concessions and changes to its usual kind of labour agreement. 

Hargrove said the union is proposing a six-year "grow-in" that would see new employees at the new plant hired at rates below the standard contract and then rising to full wages and benefits over six years.

"From that point forward, they would lag the traditional "Big Three" by two years as long as they were building the small car," Hargrove told CBC News.

There would also be far fewer job classifications.

"We've tried to make it as attractive as possible to try to get this new facility," Hargrove said.

The proposal calls for Ford to keep its assembly plant in St. Thomas open. In January, Ford decided to cut one shift and 1,200 jobs at the plant. Earlier this month, the automaker also announced it would cut production by 21 per cent — a decision that would result in downtime at the St. Thomas plant. 

Hargrove said he's sent the plan to executives at Ford and to Magna chairman Frank Stronach. "He [Stronach] was excited," Hargrove said. He said Ford executives called it a "very good proposal" but said the recent decision to cut production would delay any decision on the CAW plan.

The Ontario government would also be asked to kick in some financial assistance.

Analysts have their doubts

But auto analyst Dennis DesRosiers, of DesRosiers Automotive Consultants, wasn't optimistic the plan would end up being adopted.

"Ford doesn't really need capacity; they need to close capacity," he said. "That's a big, big issue to overcome.

"Secondly, the government doesn't typically fund distress situations," he added. "They fund innovation, R&D, and things like that. It would be difficult to build the case for St. Thomas."

It's the second time this year the CAW has offered to be more flexible to save jobs in Canada. Earlier this month, GM of Canada announced it would build a revamped Camaro at its No. 2 plant in Oshawa, Ont. — a plant that had been scheduled to close in 2008, throwing 2,700 out of work.   

The Camaro announcement came after the CAW agreed to 2,500 early retirements to reduce the operating costs in Oshawa.