It was just 10 days ago that Ford approved a new three-year labor contract with Unifor, the union representing 5,000 Canadian auto workers, securing jobs for the launch of Super Duty trucks later this year at the Ford plant in Oakville, Ontario, and to build more V8 engines at the Windsor and Essex factories across the river from Detroit.
As Ford CEO Jim Farley kicked off the company’s presentation of second-quarter financial results this week, he first called out the operations in Canada and the new labor contracts as crucial to the automaker’s success – while, of course, touting Ford as the most American of US car companies.
And Farley used this opportunity to nudge the Trump administration to reach agreement with our neighbors to the north and south on a new US-Mexico-Canada Agreement for free trade. USMCA has been in place since July 2020, and it replaced the North American Free Trade Agreement.
War Of Words With Canada
President Trump wants a deal with better terms for the US, although negotiations are going poorly because of the 25% tariffs he slapped on goods from both nations. As Canada pushes back, the White House recently announced a 50% tariff on Canadian imports like cars, alcohol, dairy, wine, hockey sticks, and cement, effective August 19. Against this backdrop, is there any hope for a new USMCA?
Farley sure hopes so, and he describes the Canadian operations as “really important to our future at Ford.” He opened the earnings presentation by describing USMCA as an opportunity “to build a framework that levels the playing field for North American manufacturers, just like Ford, against the mass imports from Japan and South Korea that carry a huge currency advantage.”
Pivoting From USMCA To Japan, Korea
Asked in the Q&A by an analyst if he has a sense for how the USMCA discussions are going, Farley said Ford has had “really good conversations” with the Trump administration, with US Trade Representative Jamieson Greer, and with officials in Mexico and Canada.
Farley said that domestically, the goal needs to be establishing “a stronger US industrial base.” He singled out trade relations with Japan and South Korea.
“They have incredibly strong local supply chains like steel and aluminum. They have much weaker currencies, in some cases 40-year lows, and they have a modest 15% tariff.”
Farley didn’t call out General Motors specifically, but he said “some of our domestic competitors import from those locations, and they have huge advantages.” From manufacturing plants in South Korea, GM imports the Chevrolet Trax and Trailblazer, the Buick Envista, and Encore GX for North America.
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