CAW Reaches Agreement with Ford; Toyota Confident in Future Sales

The four year contract approval by the Canadian Auto Workers (CAW) union and Ford Motor Company F has been reached, with the terms eliminating cost of living raises in favor of a bonus structure. Previously, Detroit automakers agreed to prolong talks so as to avoid labor strikes at Canadian plants. Other stipulations include the requirement for starting employees to spend more time working towards top pay in exchange for the aforementioned changes and an additional 600 jobs added to the workforce. The vote for these terms saw an 82 percent approval by the CAW, and union President Ken Lewenza believes the facilities and workers he presides over are guaranteed a strong future as a result. Base pay has fallen a little more than three dollars per hour (Canadian) and the time to reach C$34 an hour will be ten years instead of seven. A third shift will be added to Ford's Oakville plant, adding 300 jobs and a new product release could add 300 more, according to the automaker. This will help ease fears of decreased production from the labor force going on strike. Shares of Ford are down 0.96 percent premarket and year to date shares are down 3.35 percent. Despite this drop in value, the announced contract ratification should have a positive impact as labor strikes in the Canadian workforce are now highly unlikely with this contract approval. Stateside, vehicle production at Toyota TM is expected to ramp up as the company announced plans to increase hybrid vehicle offerings to 21 models by the end of 2015. The company is confident in demand for the cars, despite plans to further cost cutting while increasing sales and profitability. Vice Chairman and Head of Research & Development Takeshi Uchiyamada hopes that hybrid vehicle production can be more focused here in the United States, but plans for this have yet to be confirmed. Panasonic has agreed to provide Toyota with lithium-ion batteries for Toyota's additional vehicle releases as it has previously with the plug-in Prius models. Toyota has a global electric vehicle release planned for December of 2012, despite having abandoned plans of massive sales of its eQ model, stating that it misread the market and doesn't plan on the offering to be a major success. Toyota plans to sell one million hybrid vehicles annually throughout 2015 as a result of gearing the product offerings heavily towards gas/electric, despite the higher cost of manufacturing and skepticism surrounding the vehicle tax credit. Premarket, shares of Toyota are up 0.10 percent and year to date shares are up 23.24 percent. News of increased hybrid offerings (and company confidence in future sales) will have a positive impact on shares as strength in the hybrid marketplace will continue to grow. Should Toyota carry out these plans as expected, the company will have the highest number of hybrid offerings in the automotive market place, especially here in the United States.