Canadian auto industry facing big challenges as contract talks begin with Detroit 3

Formal contract talks between the Detroit Three automakers and the union representing Canadian autoworkers begin this week, with the union calling them "the most important auto contract talks in a generation."

The month-long negotiations will involve all three of the Detroit-based automakers. Talks open in Toronto with General Motors of Canada today, while talks with Ford and Fiat Chrysler open on Thursday.

"There will be no deals with any of the companies without commitments from each of them for investments in Canada," said Unifor national president Jerry Dias.

The union says its top priority in these talks will be securing new production for Canadian plants.

The future of a GM plant in Oshawa, Ont., for instance, has been clouded in uncertainty since the company shifted production of the Camaro to a plant in Michigan.

"We have to find a solution for Oshawa or there will be no agreement," Dias told a news conference Wednesday afternoon, saying Unifor will be looking for a commitment on new production for GM facilities in Oshawa and St. Catharines, Ont. "There will be no agreement until we have solidified the footprint in Canada."

There are questions, too, about the future of Ford's engine plant in Windsor, Ont. In 2014, it lost a key engine contract to a Mexican plant. Unifor is also worried about the future of a Fiat Chrysler assembly plant in Brampton, Ont.

GM said in a statement it was looking forward to its talks with Unifor. "These negotiations are an important first
hurdle in building a business case for future investments in Canada," the automaker said. "This business case will also include other partners, such as government, suppliers and our communities."

The Canadian auto sector has lost 53,000 jobs in the last 15 years, according to the Automotive Policy Research Centre, as work shifted to plants in Mexico and the southern U.S.

Dias, who will lead Unifor's negotiations, says workers agreed to concessions during the 2008-09 financial crisis and now "deserve to reap the rewards," arguing that industry profits are healthy and auto sales are at record levels in North America, making it "the ideal time to invest."

'No way they're going to get all of this'

Some observers expect the union will face an uphill battle.

"The union has come up with a very large laundry list," says Marvin Ryder, a marketing professor at the DeGroote School of Business at McMaster University. "There's no way they're going to get all of this."

Ryder says multinational car companies have a lot of choice about where they can make their cars, meaning the automakers will be in the driver's seat during these talks.

"I think the car companies are going to say, 'If you make it too tough for us, we've got alternatives. We can go to Alabama, we can go to Mexico,'" he told CBC News. "I'm not sure the car companies want to leave, but I'm not sure how much more they want to put into Canada either."

The union says it will choose one company in early September to set the pattern for deals with the other two. Existing contracts expire in just 40 days — on Sept. 19 — putting the parties in a potential strike/lockout position after that date.

Unifor was formed in 2013 by the merger of the Canadian Auto Workers and the Communications, Energy and Paperworkers unions.

This will be Unifor's first set of auto contract talks. It represents 23,000 workers at the Detroit Three in Canada.