$56,410 Per Job? GM Could Get a Hefty Government Payout For Assembly Plant Investment
It looks like the prospect of getting a partial payback for its investment could have hastened the deal reached between General Motors Canada and its autoworkers’ union.
The automaker could have up to 40 percent of the money invested in its Canadian operations handed back by the Ontario and Canadian governments, according to a report in the Globe and Mail.
If the full amount is realized, it means a government cash injection of $56,410 per autoworker.
There was already talk of hands-off government intervention before the two sides reached a last-minute agreement on September 19. Unifor president Jerry Dias mentioned the looming changes to the federal government’s Automotive Innovation Fund (which moves from low-interest loans to grants), claiming the switch would help seal a deal with GM Canada.
After 3,900 union members ratified the $554 million (CAD) deal, GM Canada claimed it was “in discussions with the federal and Ontario governments toward potential support agreements to help optimize the competitiveness of our Canadian operations for the future.”
The deal sees unfinished full-size pickups sent to the automaker’s Oshawa plant for final assembly, and product diverted from Mexico to its St. Catharines engine and transmission plant. Workers covered by this collective agreement are employed at these two plants, plus a Woodstock, Ontario parts facility.
According to the Globe, the federal fund and Ontario’s Jobs and Prosperity Fund could hand GM Canada a total of $220 million. That’s assuming the full sum of the investment qualifies for the two programs, each offering up to 20 percent.
One industry source told the publication, “you can get 20 percent by showing up.”
If the remaining two Detroit Three automakers know this, Unifor’s job of securing investment becomes much easier. Among the Canadian facilities seeking upgrades or new product are Fiat Chrysler’s Brampton plant and Ford’s Windsor engine facility.
Both governments paid a total of $13.7 billion to GM Canada and Chrysler Canada in 2009 to keep the companies afloat. The federal government’s contribution to GM was $7.23 billion.
[Image: General Motors]
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Every time I'm away a while and come back, someone else is gone. Now where's PCH101? Alex?
Only m is the globe and mail got ir wrong, the investments agreed to in the contract do not hinge on government money, gm has agreed to put this money into the plants, and and are now contractually obliged to do so as the contract has been ratified, there is no clause saying conditional on government aid. They are however in talks for future investments, now if the government wants to give them money they don't have to that is another matter altogether and would no surprise me if they did (and GM isn't likely to refuse it are they?)