According to news reports, the Canadian Auto Workers union and Ford of Canada Ltd. have a tentative agreement on a three-year labor contract that calls for some increases in wages and benefits, but also establishes a plan for significant reductions in employment. Ford’s Windsor (ON) Casting plant, however, is in line for closing.

Windsor Casting would close in late 2007, or early 2008, when Ford phases out production of the V-6 engine produced at the nearby Essex Engine plant, eliminating the need for Windsor’s products.

The Essex Engine plant will stay open, as will Ford's St. Thomas, ON, assembly plant, which will get a $200-million investment over the next three years as the company prepares to produce new-model Crown Victorias and Grand Marquis.

Buzz Hargrove, CAW president, told reporters the union had to accept Ford's decision to scale down its Ontario operations in order to shape a constructive agreement. "This was a company that was losing market share and was forced to restructure. We came to the conclusion it was a long-term problem," Hargrove said at a news conference. Ford's CAW workforce is now about 12,460 but will drop to about 10,500 workers.

Ford will offer retirement incentives to eligible workers in an effort to open job opportunities for younger workers. Also, the company’s monthly pension benefit has been increased, and Ford has agreed to allow workers displaced from Windsor to fill open jobs at company plants in Oakville and St. Thomas.

Stacey Allerton Firth, v.p.- human resources for Ford of Canada Ltd., stated the agreement is financially "sustainable" for the company and that it will protect the company and its employees in future.

CAW members are scheduled to vote on the Ford contract proposal this weekend.

The CAW chose to negotiate first with Ford, to set a pattern for upcoming negotiations with DaimlerChrysler and General Motors.