DETROIT — Ford Motor Co. and the Canadian Auto Workers tentatively agreed Monday on terms of a new three-year contract, averting a strike that could have severely hampered Ford’s North American operations, the Associated Press reported.
In addition, Ford said it would invest $402 million in one of its Oakville, Ontario assembly plants to prepare it to make Ford’s next generation Windstar minivan and a new Mercury minivan.
CAW President Buzz Hargrove and Alain Batty, Ford’s Canadian president, made the announcements at a news conference in Toronto.
Hargrove said the new contract includes wage increases of as much as 13.5 percent over three years and assurances that 900 of the 1,400 workers who will lose their jobs at an Oakville truck plant will be hired at the minivan factory.
The closing of the plant, where Ford makes the F-150 pickup, was the biggest hurdle in negotiations that began last Monday.
“It was one of the toughest issues we’ve ever faced in our collective bargaining with Ford,” Hargrove said.
Ford announced plans in January to close the truck plant as part of a $4.1-billion cost-cutting plan to eliminate nearly 21,500 jobs in North America.
The plant was scheduled to close in late 2003 or early 2004, but Hargrove said Ford has agreed to keep it open until July 2004. Soon after, the 900 workers will be retrained and move to the minivan plant, which already employs some 3,200.
Batty read a statement at the news conference and did not discuss specifics of the expansion plans in Ontario.
He said Ford of Canada “is strong and getting stronger,” but he also noted: “This agreement is tentative. There is still work to do.”
The contract must be ratified by union members.
The CAW had said its 13,000 Ford workers in Canada would strike if the sides didn’t reach an agreement by midnight Tuesday.
A strike against Ford could have been crippling for the automaker in Canada and the United States. Particularly important is its engine plant in Windsor, Ontario, which supplies more than a dozen U.S. assembly factories as well as ones in Mexico, Venezuela and Brazil.
The tentative contract includes such offerings as a signing bonus, 28 hours of additional paid vacation time and a new retirement incentive worth about $60,000 Canadian dollars.
Hargrove said he believes retirement incentives and other options will help avoid any layoffs when the F-150 plant closes in 2004.
Ford also has agreed not to dismantle the plant, he said.
The CAW successfully negotiated a contract earlier this month with General Motors Corp. DaimlerChrysler AG will be the last automaker to bargain with the CAW. The union will set a strike deadline for negotiations with DaimlerChrysler next Monday.
Analysts say one reason the CAW picked GM first was it believed GM was better able to absorb a higher-costing contract.
The new GM pact, which will expire in 2005, provides wage increases of as much as 13 percent over the life of the agreement, additional vacation time, increased health care benefits and a signing bonus — a pattern that Ford eventually followed.
It also provides for improved job and income security, including a commitment by GM of $500 million in investments in Oshawa, Ontario, and a modest amount of new work in St. Catharines, Ontario.
In trading Monday on the New York Stock Exchange, Ford shares were up 17 cents to close at $9.80, GM shares were down 89 cents to close at $38.90 and DaimlerChrysler was off $1.66 to close at $33.51.