Magna International Inc. chairman Frank Stronach is set to announce a tectonic shift in the way the Canadian auto parts giant conducts its business by unveiling a deal that opens up the company's plants to organizing drives by the Canadian Auto Workers union.
The agreement is scheduled to be revealed on Monday at the company's headquarters in Aurora, Ont., by Mr. Stronach, who has kept the union out of all but a handful of the company's plants for five decades. He will be accompanied by CAW president Buzz Hargrove, whose staff members have been knocking on the doors of Magna plants for years in mostly unsuccessful attempts to organize workers.
One of the key pillars of the deal is that Magna's management will be neutral during organizing drives by the CAW at the company's 61 manufacturing facilities in Canada, according to sources familiar with the matter. Mr. Stronach could not be reached yesterday, while Mr. Hargrove would not comment.
Magna has about 21,000 employees in Canada, but that number includes at least 2,000 head office, management and salaried personnel who would not be eligible for union status.
Such a move would represent a second revolutionary event in fewer than six months at Magna, one of Canada's largest and most successful companies. Its annual revenue of $24.2-billion (U.S.) ranks it among the top five global auto parts companies by size and it is among the most diversified players in the industry, manufacturing almost every part that goes on a vehicle, including assembling complete vehicles under contract from some auto makers.
Already this year, Mr. Stronach has given up the sole control he has exercised over Magna for decades by selling a 20-per-cent stake in the company he founded in 1957 in a Toronto garage to Russian billionaire Oleg Deripaska. Mr. Deripaska and Mr. Stronach now each control 42 per cent of a holding company that in turn controls Magna.
Mr. Stronach first made the ground-breaking human resources proposal public during Magna's annual shareholders' meeting in 2006, when he revealed that he had been in discussions with Mr. Hargrove and United Auto Workers officials about what he called a “Framework of Fairness.”
Agreements between his company and the two major automotive unions in North America, he said at the time, were vital in order to create a new management-labour model to stop auto industry jobs from flooding out of North America.
When queried by reporters after that meeting, he said the company would “embrace the union,” which would have total access to the company's plants.
Negotiations had actually begun on a deal in 2005 and have gone on for almost two years.
He has insisted for years that he is not anti-union, maintaining instead that unions aren't necessary at Magna plants because of a unique human resources culture. Among the elements of that culture are an employee charter of rights that includes profit-sharing and stock ownership plans, an employee hotline to report problems and fairness committees composed of management and employee representatives, which examine employee concerns.
Organizing drives have been essentially a black hole for the union at Magna's operations in Canada, the biggest and most important of which are in Ontario.
The CAW has failed in attempts to organize such facilities as Formet Industries in St. Thomas, Ont., and Karmax Heavy Stamping in Milton, Ont., two of the auto parts maker's largest plants with about 1,500 and 900 employees respectively.
The union has been successful in organizing three Magna plants. Those are seat-making facilities Integram in Windsor, Ont., and Mississauga Seating in Mississauga as well as another interiors plant in Windsor called Innovatech.
Attempts to organize Integram, which makes the seats for minivans put together at a Chrysler Canada Inc. assembly plant in Windsor, became the centre of controversy during contract negotiations between the union and Chrysler in 1999.
Until the 11th hour of those talks, the CAW was insisting that Chrysler order Magna to recognize the union at the seating plant.
The union backed down from that demand, but later took the issue to the Ontario Labour Relations Board and eventually won certification.
A handful of Magna's U.S. plants have been organized by the UAW, although one of those was closed earlier this year.
