Companies & Industries

With Unifor’s Toyota Canada union drive, neither side can afford to lose

The first big test for the merged CAW-CEP.

Workers on a Toyota assembly line in Cambridge, Ont.

Toyota’s output has soared since it opened its first plant in Cambridge, Ont., in 1988 (Kevin Van Paassen/The Globe and Mail/Canadian Press)

Toyota is an exception in the Canadian automobile industry. The Japanese carmaker, which in February announced it would close what’s expected to be the last auto plant in Australia in 2017, has steadily grown the share of its vehicles produced here, even as rivals scaled back. But that happy circumstance is under threat: Toyota is now facing a determined unionization drive by the country’s largest and newest union.

Unifor was created out of last year’s merger between the Canadian Auto Workers and the Communications, Energy and Paperworkers unions. The rationale was strength in numbers; its combined membership of 300,000 would be better poised to fight back against increasingly hostile employers, as well as governments that have neutered stoppages as a bargaining tool through back-to-work legislation.

Toyota Motor Manufacturing Canada represents the super union’s first big test. It needs a high-profile victory to reverse the steady erosion of organized labour’s influence. “It’s probably going to be one of the biggest drives Unifor will ever undertake,” says John Aman, director of organizing.

Yet Toyota is the very definition of a hard target. The CAW and its U.S. counterpart, the United Auto Workers, have achieved little over decades of trying to organize Toyota, Honda, Nissan, BMW and Mercedes-Benz plants. Toyota successfully rebuffed incursions at its Ontario plants in 2001 (by the CAW) and 2008 (by the International Association of Machinists and Aerospace Workers). In both cases organizers believed more than 40% of workers had signed union cards, as required to hold a certification vote, only to learn they’d underestimated the bargaining unit’s size.

Toyota’s earlier victories owe much to human-resources practices adopted when it began manufacturing in North America in the 1980s. Japanese manufacturers matched wages, benefits and working conditions enjoyed by unionized workers at General Motors, Ford and Chrysler. Toyota also long touted a “no layoffs” policy toward permanent, full-time workers. Unions themselves frequently conceded Toyota was a good employer.

As the ability of Unifor and UAW to set industry benchmarks diminished along with the Detroit Three’s workforces, though, Toyota began paying wages markedly below union rates in certain U.S. regions, notes Kristin Dziczek, director of the Center for Automotive Research’s labour group. “This was partly a recognition that the threat of unions organizing them had fallen.” Then labour standards at unionized plants fell precipitously. As a condition of receiving taxpayer-funded bailouts, governments ordered GM, Chrysler and their unions to bring labour costs in line with Toyota, Honda and Nissan. With costs lower all around, maintaining the flexibility that comes from a union-free environment is arguably more important for Toyota than ever.

Late last year Toyota announced that beginning Jan. 1 new Canadian hires would be enrolled in a defined-contribution pension plan, not the more generous defined-benefit plan enjoyed by current full-time employees. Aman claims this fuelled the latest certification drive. “People are frustrated and concerned that Toyota can unilaterally make changes to any part of their working conditions,” he says. Toyota’s reliance on contract workers, which Unifor puts at 25% of the company’s workforce, is another flashpoint.

Although Unifor again claims it has surpassed the 40% threshold needed to call a vote, organizers are still trying to drum up enough support to comfortably meet the majority of the 7,000 workers required for victory. Aman says Unifor is “probably still on target” to apply for a vote in the coming months. If the union’s math is right this time, that vote could take away a key competitive advantage of Canadian automaking’s brightest light.