Grants major influence in auto bargaining, auto expert says

With a tentative contract agreement announced with General Motors of Canada, Unifor can comfortably move on to target its next round of negotiations with either Ford or Fiat Chrysler.

The latest deal with GM will be taken to Ford and Chrysler in hopes similar agreements can be reached

Federal government grants to automakers played a significant role in contract talks between Unifor and General Motors of Canada, says business professor Ian Lee. (CBC)

Changes to the federal government's funding for automakers played a big role in contract negotiations between General Motors of Canada and its employees, says Ian Lee, a business professor at Carleton University.

Unifor announced a tentative agreement with GM early Tuesday just after a midnight strike deadline.

Lee credits the deal, in large part, to the Canadian government's recent decision to convert loans from its Auto Innovation Fund into grants.

Though a spokesman for Canada's industry ministry would not give specifics on how the new funding will work, Lee says the change means the automotive sector can be much more competitive with Mexcio and the Southern United States.

"That's profoundly important because we're talking hundreds of millions and billions [of dollars] over the [coming] years, not just to GM but to the industry," he told CBC News. "That certainly changes the economics."

Another significant reason for the deal, that will see GM invest heavily in its Oshawa and St. Catharines plants, was Unifor agreeing to convert all new employees to a defined contribution pension plan.

'Thirsty' for work at Ford

With a tentative contract agreement announced, Unifor can move on to target its next round of negotiations with either Ford Motor Co. or Fiat Chrysler Automobiles.

Norm Russette works at Ford's Essex Engine Plant in Windsor, Ont. He's been building engines there for 33 years. For him, this tentative deal looks good. 

"Hopefully they move on the Ford next," Russette told CBC News. "As long as we get a footprint in Ontario, keeping the plants running, that's what we want."   

He pointed to Canada's workforce as a positive for the automakers, saying the workers want to keep building vehicles.

"Everyone's a hard worker in the plant." he said, "I'd love to see new product here at our plant. It's something we're all hoping is coming ... We need a new product in Essex Engine. The workforce wants it, they're waiting for it, They're thirsty for it."

Bring on Ford, says union

With a tentative contract agreement announced, Unifor can move on to target its next round of negotiations with either Ford Motor Co. or Fiat Chrysler Automobiles.

Chris Taylor, president of Unifor Local 200 representing Ford workers in Windsor, hopes Ford will be selected in the next round of bargaining.

(Jonathan Pinto/CBC)

Taylor says the biggest achievement for the latest contract agreement is guaranteeing new investments in Canadian jobs. The tentative agreement will come up for a ratification vote on Sunday at GM's two Ontario plants. 

Unifor's national president Jerry Dias said the bargaining team ensured job security for employees through "hundreds of millions of dollars of investment for our Canadian facilities."

In what's known as pattern bargaining, the latest deal with GM will be taken to Ford and Fiat Chrysler in hopes similar deals can be reached, Taylor explained.

"The main thing for me and Ford workers at this point, specifically in Windsor, is we've been able to, so far, ensure investment is achieved with GM and that's going to be our main goal."

Even with pattern bargaining, though, each negotiation will have its own unique challenges.

"Ultimately, it's our members that decide," Taylor said. "There's always going to be differences in what Ford workers want, compared to Chrysler workers and compared to GM workers."

With files from Canadian Press