Ford Motor (F) has decided to begin production of the V-8 engine at its Essex Engine plant in Windsor, Ontario, which was shut down in 2007. The engine will be used in Ford’s 2011 Mustang GT.
 
According to a contract talk with Canadian Auto Workers (CAW) in October, Ford will employ 200 workers in one shift at the plant to make the V-8. However, Ken Lewenza – president of the CAW – is not happy with the decision.
 
Lewenza has asked Ford to add more shifts to install the engine in other vehicles as well. With this, the union will be able to recall more workers; about 1,000 Ford workers had been laid off at Windsor . Lewenza has revealed that V-8 engine could be used in Ford’s F-150 pickup truck, one of the best-selling vehicles in North America.
 
In October, Ford reached a new agreement with CAW members that expires on Sep 17, 2012 and covers about 7,000 Ford workers. Under the deal, Ford has promised to invest $2 billion in its Oakville plant in Ontario, where it has committed to build two more vehicles, and the Windsor plant in Ontario , where it has promised to produce a new engine. The automaker also vowed to keep 10% of its North American production within the country.
 
In exchange, the CAW workers have agreed to give up concessions, similar to those made by their counterparts at the bankrupt Chrysler and General Motors (GM), which saw labor costs fall by $19 an hour. The concessions include reductions in time-off, bonus payouts, and other benefits, as well as a commitment that new members will contribute $1 for every hour worked to the employees’ pension plan.
 
The new agreement would also allow Ford to close the St. Thomas assembly plant in Ontario during 2011, eliminating 1,400 jobs. Workers at the plant manufacture the Ford Crown Victoria, Mercury Grand Marquis and Lincoln Town Car.
Read the full analyst report on “F”
Zacks Investment Research