No reason for Canadian GM (or Chrysler) bailout

Contrary to my dire prediction, GM Canada may yet survive as a result of new product (“GM said its plan will ensure the launch of five new vehicles in Oshawa and its Suzuki joint-venture CAMI plant in Ingersoll, Ont.”–has anyone seen details on the new vehicles?)–and oodles of governments’ money.
But GM Canada will soon shrink, under its own plan for survival, from 20,000 jobs just a few years ago to some 7,000. That’s two-thirds of the company’s employees gone–yet without complete devastation of the Ontario economy. Why then should the federal and provincial governements now risk billions of dollars to retain just a remaining few thousand jobs?
The argument is made that very large numbers of jobs in Canada depend on the auto industry–responsible “for one in seven jobs nationwide”. But the key point is that those numbers relate to the auto industry as a whole, both North American and other, in Canada and the US.
If GM Canada goes down (all 7,000 remaining jobs), even Chrysler Canada, Canadian auto parts suppliers, dealers, repair shops, lube and rustproofing places, etc., will still have business related to those companies’ remaining North American operations and vehicles–and to all others in the industry. The sector relies on the the state of the economy, not the Detroit Three’s Canadian plants.
So, most of the Canadian jobs do not in fact depend on the Detroit Three’s Canadian operations. That reality is what one does not hear from politicians, the CAW, the automotive sector, or the media. What is important for the size of the sector is automobile manufacturing, wherever in North America and whatever the company.
Mark C.

One thought on “No reason for Canadian GM (or Chrysler) bailout

  1. paulsstuff says:

    Actually you are wrong on this post. The 7 jobs per assembly plant job relates to Canada. I work at the Brampton plant, and there are many parts feeder plants in southern Ontario that would fold if that plant goes down, and they employ probably greater than the 7 to 1 ratio.
    Magna, Johnson Controls, Guelph products, Benteler, are but a handful of companies that depend on Chrysler for their survival. Magna is in a stronger position, but even it is taking a hit with temproary shutdowns and lowerd production.
    What is hurting ALL the assembly plants here now is the lower vehicle sales. These plants have fixed costs for things such as electricity. When those plants are down those fixed costs must still be paid. By the way, Chrysler has an electric mini-van, Jeep, small sports car, and mid-sized sedan all due out within 2-3 years, using the same batteries GM will be using. As well the new Ford Fusion blows away the Prius in fuel economy, and pretty much every other category.

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