Ford is facing a new Canadian strike that could impact production of F-Series pickups

2023 Ford Super Duty F-350 Limited


DETROIT – Ford engineThe labor dispute could become an international issue affecting U.S. production of some pickup trucks, according to Canadian union Unifor and the company There are only a few hours left to reach an agreement for around 5,600 autoworkers.

The sides must reach an agreement before Tuesday's extended deadline of 11:59 p.m. ET to avoid a possible strike. The original deadline for the talks was Monday evening, but the sides announced a 24-hour extension after the union received a “substantial offer” from Ford “minutes before the deadline.”

The possible work stoppage in Canada adds to the pressure facing Ford, days after the United Auto Workers called for targeted strikes against Ford and its downtown rivals. General Motors and Chrysler mother Stellantis.

A Unifor strike would disrupt Ford Oakville Assembly Plant which produces the Ford Edge and Lincoln Nautilus crossovers. Also affected would be two engine plants that produce 7.3-liter and 5.0-liter V8 gasoline engines used in highly profitable products such as the Ford F-Series Super Duty and F-150 pickups and the Mustang muscle car .

An aerial photo shows Ford's Oakville Assembly Plant in Oakville, Ontario, Canada, May 26, 2023.

Carlos Osorio | Reuters

If Unifor strikes against Ford, it would be the first time both unions strike simultaneously against a Detroit automaker over national collective bargaining agreements – another unprecedented labor move after the UAW struck all three Detroit automakers for the first time last week.

“Ford doesn’t want a strike anywhere. “The added pressure from Unifor is very compelling for Ford to reach a deal,” said Art Wheaton, a labor law professor at the university the workers' institute at Cornell University.

Unifor, whose automotive members were part of the UAW until a split in the mid-1980s, confirmed that talks are ongoing after continuing past the Tuesday morning deadline.

F-Series, Mustang could be malfunctioning

If there is a prolonged strike in Canada, the work stoppage could ultimately impact U.S. production of the vehicles. The extent of the effect will depend on Ford's engine inventory and how much the company wants to focus on non-V8 gasoline engine models.

For the F-150 and Mustang, Ford could increase production of four-cylinder and V6 engines, including EcoBoost engines, which have accounted for the majority of sales since 2018. The company could also increase production of diesel engines for its larger Super Duty trucks.

Gasoline V8 models account for approximately 50% of Mustang and 20% of F-150 models sold in the United States. Large F-Series trucks only have V8 engines. However, according to the company, a majority of the vehicles sold have diesel V8 engines instead of gasoline engines. These engines are manufactured in a factory in Mexico, not Canada.

Lana Payne speaks on stage as Unifor, Canada's largest private sector union, announced her as its new president, succeeding outgoing leader Jerry Dias, on August 10, 2022 in Toronto, Ontario, Canada.

Cole Burston | Reuters

“We will continue to work with Unifor to create a blueprint for the automotive industry that supports a vibrant and sustainable future in Canada,” Ford said said in a statement about the talks early Tuesday.

Unifor, which represents 18,000 Canadian automaker workers in Detroit, took a more traditional approach to its negotiations than its U.S. counterpart. The Canadian union chose Ford as its “target company” rather than following the UAW's new strategy of negotiating with all three automakers. It also announced a traditional nationwide strike instead of targeted strikes if necessary.

Hours before the original deadline, Unifor National President Lana Payne said said the union and Ford are “not where we need to be on key priority issues,” including wages and pensions. She noted that the last time Canadian automakers went on strike was in 1990.

“We need Ford to deliver more to meet our members’ expectations and needs, it’s as simple as that,” she said.

UAW connection

Payne said the union has been monitoring the UAW negotiations and that it has been “in contact” with the American union, including on Monday with UAW President Shawn Fain. The UAW and Unifor showed solidarity leading up to the talks and continued to publicly support each other.

Spokespeople for Ford and Unifor declined to comment on details of the company's proposal, which led the union to agree to an extension.

The extension of contract terms has historically been common in collective bargaining in the automotive industry. However, Fain refused. He also unconventionally set a second deadline of midday Friday to announce further strikes if “serious progress” in the talks was not made by then.

“For decades, automakers have tried to pit the U.S. against Canada … Shawn Fain has turned the tables and is using the same or a similar strategy to advance negotiations,” Wheaton said.

If the Unifor strikes don't affect F-Series production, extended UAW strikes starting Friday could. Dan Levy, an analyst at Barclays, said Tuesday that the UAW “could target large pickup truck factories” next. Detroit automaker, also known as D3.

“As a reminder, large pickups are the profit drivers for the D3,” he wrote in an investor note, pointing out that everyone has a robust inventory of vehicles.

Cox Automotive reports that the lead time for Ford's F-Series pickups was 87 days in early September, including 64 days for the larger Super Duty trucks; GM was at 79 days for the Chevrolet Silverado and 70 days for the GMC Sierra; and Stellantis' ram was 119 days old.

– CNBC’s Michael Bloom contributed to this report.

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