Auto sector in ‘existential crisis,’ Clement says
The Canadian auto industry is in the midst of an “existential crisis” and government, unions and management must work together or the sector will lose its ability to compete, says Industry Minister Tony Clement.
On Wednesday, Chrysler LLC painted a grim picture of its situation in Canada, saying it needs billion of dollars in help if it is to survive.
“The fact of the matter is unless government of course, but also labour [Norman Spector says: “Lewenza strikes out“] and management come together to severely restructure the auto industry both in Canada and the U.S., we’re into a place where they cannot compete and they cannot succeed,” he said.
He also said the money from Ottawa would be a loan that the government would expect to be repaid. It would also be vital that the company continues to produce vehicles at current levels [if output continues for some time at current, i.e. early 2009 levels, Chrysler and GM will surely fail – MC].
“We want to get this money back out of the auto sector over a period of time,” Clement said.
“These are repayable loans. We want to make sure Canada maintains its 20 per cent of production that we have right now in the North American auto sector, so these are the kinds of things we’re reviewing in both the case of Chrysler and GM [that 20% looks pretty unlikely for the General].”..
Chrysler is really sticking it to Mr Lewenza–and governments:
Chrysler threatens to pull out of Canada
Auto maker says it could close plants if needs aren’t met; demands $2.3-billion in loans and labour-cost cuts to remain viable
Chrysler LLC threatened last night to pull the company’s production out of Canada – a move that would throw 9,000 employees out of work – unless governments here provide $2.3-billion (U.S.) in loans and its Canadian union agrees to slash labour costs by 25 per cent.
At a parliamentary committee hearing last night, Chrysler president Thomas LaSorda said the company would commit to maintaining roughly a quarter of its North American production in Canada if its “needs” are met.
Asked by an MP whether the company has the ability to move production, Mr. LaSorda noted Chrysler recently closed a minivan plant in St. Louis, which could reopen to take production from Windsor, which makes the same model. He said models currently being made – or planned for – its Brampton plant could be moved to the U.S. or Mexico.
Mr. LaSorda said Chrysler’s Canadian labour costs are $75 (Canadian) an hour per worker – including wages and benefits for both active workers and retirees – and need to be cut by $20 an hour to be competitive with American and foreign car makers in the United States.
He said a cost-cutting agreement that the CAW struck with General Motors of Canada Ltd. [“The automaker needed to take $20 an hour off the wages but succeeded in getting about $7 an hour…”] – which GM’s workers approved last night with 87 per cent in favour – is not sufficient for Chrysler…
Back at the General:
GM had a gun to the CAW’s head – and missed
Update: Quelle surprise:
CAW ‘incredibly angry’ over Chrysler’s stand
Upperdate: Ford chimes in:
Auto bailout deal may be unravelling
Ford joins Chrysler in blasting GM, union for failing to deliver deeper cuts in workforce costs