Ford Wants Canada To Be Competitive

The Canadian Auto Workers Union has been asking for automakers to stop cutting down jobs in the country. In response to the CAW's demands, Dearborn automaker Ford pointed out that Canadian auto assembly facilities and workers should be able to compete with the best in the world if they want automakers to continue investing in Canada.

Ford's Chief Executive Officer Alan Mullaly had this to say during a dinner at Ford's headquarters last Tuesday: "The most important conversation we're having in Canada is about competitiveness. It's the competitiveness of Ford; it's the competitiveness of operating in Canada." As consumers in the important United States auto market is no longer concerned where vehicles are being made, Canadian workers are challenged to be competitive if they want to continue having automakers open up assembly facilities in the country.

The United Auto Workers union, the counterpart of the CAW in the United States recently signed contracts with Ford, General Motors, and Chrysler. The said union allowed the three companies to save more on wages. This is what the Big Three is also asking from the Canadian Auto Workers union. The fact that the UAW has consented to have less costly contracts and the increasing value of the Canadian dollar is expected to wreak havoc on the state of the Canadian auto industry.

The increased value of the Canadian dollar means that Ford can no longer build vehicles in Canada and sell them in the United States for high profit. Thus, automakers might be looking to open new assembly plants on countries like Mexico where wages are much lower than they are in Canada.

Joe Hinrichs, the group vice president for global manufacturing at Ford, added: "The Canadian business from a manufacturing standpoint has to be competitive with what we do in the rest of the world. The marketplace doesn't look at a vehicle built in Canada versus a vehicle built in the U.S. and see it differently, so we have to have a manufacturing model and a business model that works if we're going to sell vehicles made in Canada in North America."

CAW's president Buzz Hargrove said earlier that this year's negotiations with the Big Three are going to be the toughest yet. With the market shares of the automakers on the decline, they are expecting that the automakers will be looking to create more profits which they can achieve if they can take advantage of low-cost manufacturing countries. Canada has lost its edge in the said department with the value of the loony continually increasing. This does not mean though that Canadian assembly facilities will stop manufacturing vehicles and auto parts such as the blower motor Canada.