Cost of Canadian Cars Goes Loonie
Canadian Auto Workers' president Buzz Hargrove has publicly declared "no concessions" re: next summer's contract with the U.S. automakers. He may want to soften that stance a bit. Just as American automakers are trying to cut operating expenses any way they can, Financial Post reports that Canada is now "the most expensive place in the world to make cars." They attribute this dubious honor to the strong loonie and "other factors" that include the new lower-paying contracts with the UAW and the health care concessions. Many suppliers are cutting production and closing plants in Canada, and the automakers are expected to follow suit as Canadian production costs continue to grow relative to operations in the U.S., Mexico and Asia. Will Buzz take the Canadian auto industry down with him or acquiesce to what seems like an inevitable cut in wages and benefits? Watch this space.
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I believe that most of the Canadian plants show up near the top of the quality and productivity comparison charts, especially the GM Oshawa plant where Mikey works. Whether those two factors will be enough to offset the rise in the loonie and drop in UAW compensation remains to be seen. Then there is the whole political issue of moving jobs back to the US if all other factors work out even for the big 2.81. My opnion is that there will be "real" pressure (as opposed to the usual theatrical hysterics on both sides) on Buzz and the CAW to make concessions, quality and productivity results notwithstanding. Happy Thanksgiving to our American friends - drive safe and enjoy the time with your family and friends
I've heard Buzz speak, I'm a CAW member though not autos. The man is detached from reality and stuck in the past. I'm sure Buzz has served well but it is time for a change. As for the auto workers I don't feel all that bad. It's the other people who work in spinoff industries and don't make union money I feel bad for. I'm in Alberta and remember the NEP and the tough times here that followed, guys were jumping out of windows in Calgary. They had a lot of good years out in auto Ontario and were making big money and living good when times were tough in other parts of Canada. I've been through it and sometimes you have to take less to keep your job, hopefully the union isn't too greedy.
I hope all the US readers on this site have a Happy and peacefull Thanksgiving period. GM has been in Canada many years prior to the old Auto pact, it existed as someone else has said to allow Vehicles manufactured in the USA, free access to Canada, it worked well but all that time we Canadians where getting ripped off on the Price of the vehicles as well the vehicles that came from the Big 3 at the time were not the best in terms of quality, of course this applied to US Buyers too, thats why a lot of us decided to purchase Asian and EU vehicles and it continues to this day. Buzz H. says that Asian countries wont allow our vehicles to be sold in there countries, well if we dont buy they why should others?
In 2008 McLaughlin / GM of Canada will celebrate the 100th anniversary of the first car produced in Oshawa. Here is an article from The Star