it wasn't long ago that U.S. automakers were producing a high percentage of their new products in Canada because labor costs were lower up north than are here in the States. The cost paradigm changed considerably after GM and Chrysler went into Chapter 11 reorganization, as the ailing automakers secured better labor deals with both U.S. and Canadian unions, making the UAW and CAW more competitive versus Japanese automakers.

The United Auto Workers renegotiated with Ford, giving Dearborn terms similar to those it gave GM and Chrysler. Ford reportedly told The Globe and Mail that it now pays about $52 per hour for U.S. labor after benefits. Unfortunately for Ford, the CAW hasn't extended the same helping hand labor-wise, and the Blue Oval isn't very happy. Ford says it is paying $16 more per hour for its Canadian workforce than it is for U.S. workers. In fact, Ford says its labor situation in Canada is so bad that the Blue Oval alleges its labor costs there are now higher than in any other region on earth.

The Canadian Auto Workers union appears willing to negotiate, but The Globe and Mail reports that it wants job security in return. Ford's St. Thomas plant, which currently builds the Panther-platformed Lincoln Town Car, Ford Crown Victoria and Mercury Grand Marquis, is scheduled for closure at some point in the next two years, and the CAW would like Ford to instead guarantee a new product for the facility. The CAW says it wants to continue to account for 13% of Ford's North American production, but closing the plant and laying off its 1,600 workers would shrink that number to 9%. So far, neither party seems to be budging, but we have a feeling Ford won't be paying the highest labor rates anywhere for very much longer.

[Source: The Globe and Mail]