Unifor — the union representing Canadian autoworkers — and Ford of Canada (F) have agreed on a new tentative labor contract, concluding six weeks of negotiations. This agreement prevented a complete walkout by union workers, while American auto workers enter their sixth day of strikes against the Big Three automakers — Ford, General Motors (GM), and Stellantis (STLA).
Yahoo Finance Senior Autos Reporter Pras Subramanian explores how the recent contract agreement between Unifor and Ford of Canada might establish a potential precedent for the ongoing negotiations between the United Auto Workers (UAW) and the Big 3.
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RACHELLE AKUFFO: The United Auto Workers strike is now entering its fifth day and no signs of a breakthrough in negotiations are in sight. But there may be a light at the end of the tunnel, with Ford of Canada and Unifor reaching a new tentative labor contract to cover unionized employees. Let's bring in Yahoo Finance's Pras Subramanian to break this down for us. Hey, Pras.
PRAS SUBRAMANIAN: Hey, Rachelle. You have some good news here. Potentially, Ford Cadillac, you mentioned, struck a labor contract with Unifor which is the Union that represents Canadian Ford workers. The Union and Canada-- Ford Canada had hammered out the deal-- excuse me --24 hours after the original strike deadline had passed there in Canada. That's the Canada strike, not our strike.
And the two sides, apparently working for the last six weeks. We don't know much about the deal yet. But the Union members need to ratify the deal. So they don't want to give away some of the ins and outs.
But we're hearing that automotive news is reporting that the Union got a wage hikes of over 20%. So that is kind of a good starting point there for striking workers here in the States, kind of a precedent is set. And maybe, that's where they can start going from a wages point of view. And then hopefully, into the benefits and other things like that.
RACHELLE AKUFFO: And it's interesting because that strike in Canada would have been a total walkout versus the strategic one in the US. But there is a possibility that the strikes in the US could expand now. And the effects could be widespread, right?
PRAS SUBRAMANIAN: Yeah. The Union the UAW here in the States, [? Sean ?] Fein talking about how if substantial progress has not been made by Friday at noon here, more workers will be called on to strike. We haven't seen-- they're not saying where they'll actually strike, what new plants will actually be hit. But they could expand to other factories.
They could actually expand the strikes of the current factories that they're at right now. So for instance, at Ford, the Michigan assembly plant in Detroit, only part of the plant is on strike. So we might see more of that there. So for their part, the automakers say that they are negotiating. They haven't walked away from the table.
But as you mentioned, the ripple effects have already occurred. We're seeing German auto giant, ZF, laying off workers in Michigan because of the spillover effects. [? U.S. ?] Steel might idle a steel furnace in Illinois for risk mitigation purposes. So that's happening there.
And meanwhile, Barclays, the investment bank, saying that this expands, the Union may target the big truck plants, which are huge moneymakers for the big three. So that could be more pain for them, potentially by Friday, if, like you said, if substantial progress has not been made.