The Truth About Cars » Canada

Canadian Finance Min: “No bailout”

Samir Syed — Sat, 15 Nov 2008 13:14:59 +0000

When the leaders of the G20 meet this weekend, they’ll look to Canada’s conservative but durable banking model as a template for the rest of the world. Since the Liberal reign of Paul Martin as Canada’s Finance Minister, Canada’s been the “Wealthy Barber” of the developed world, deploying bland but solid fiscal [...]

Quebec’s Tireless Search for Tires

Samir Syed — Thu, 13 Nov 2008 13:54:49 +0000

Last year, Premier Jean Charest’s fellow Québécois faced the worst winter the Province had seen in over five decades. So he directed his government to make winter radial tires mandatory. From December 15 until March 15, snow shoes for you, eh? Two weeks ago, I spoke to a mechanic in Nashua, New Hampshire who lamented [...]

Bailout Watch 130: Oh Canada!

Samir Syed — Wed, 29 Oct 2008 14:19:35 +0000

CTV News reports that Ontario’s ailing automobile sector is becoming another casualty of the U.S. credit crisis. Despite a Canadian dollar that’s free-fallen to $0.77, U.S. carmakers’ cash flow problems are taking their toll. Thanks to the tightening credit noose, these corporate customers can no longer finance the cost of buying Canadian parts at [...]

Canada: Judge Lets Cop Walk in Photo Radar Bribe Case

The Newspaper — Mon, 27 Oct 2008 19:20:23 +0000

The Edmonton Sun reports that a judge has cleared the last remaining participant in the city’s photo radar bribery scandal. Sergeant Tom Bell, 50, accepted lavish gifts from Affiliated Computer Services (ACS) between 1998 and 2004 while the company was attempting to land the right run the city’s lucrative speed camera operation.While several other Edmonton [...]

Scion Coming to Canada… in 2010

Justin Berkowitz — Tue, 21 Oct 2008 10:39:31 +0000

Toyota’s announced that Canadians will no longer have to spend $30k to import a grey market Scion xB from The Land of the Free. Soon they can overpay for a Scion at their very own local Toyota dealer. Maybe. In 2010, Toyota will open Scion sub-stores at Toyota dealers in Toronto, Montreal, and Vancouver. Unfortunately, [...]

Canada: Edmonton Photo Radar Trial Underway

The Newspaper — Tue, 07 Oct 2008 13:25:18 +0000

A senior Edmonton Canada police officer was back in court yesterday, as trial court proceedings began to determine whether his authorship of a fraudulent memo on behalf of a photo radar firm constituted a crime. Detective Thomas Bell, 50, is one of several Edmonton Police Service officers who accepted lavish gifts and other benefits between [...]

Russia’s Deripaska Bails On Magna

Edward Niedermeyer — Mon, 06 Oct 2008 18:05:07 +0000

State Department “undesirable” and reportedly mobbed-up Russian oligarch Oleg Deripaska has given up his 20 percent share in contract manufacturer and supplier Magna International. Marketwatch reports that Deripaska had bought into Magna in order to reap expertise in developing his own Russian-based automotive empire, but the credit crunch has him backing out. In fact, Deripaska [...]

“Small cars can be bad investments, both for the planet and the pocketbook”

Robert Farago — Fri, 03 Oct 2008 13:00:57 +0000

First it was “the HUMMER H2 is better for the environment than the Prius.” Now it’s big cars in general are better for the planet– and your wallet– than small ones. “Small cars don’t last,” automotive analyst Dennis DesRosiers tells wordsmith Barbara Righton of Macleans. “They fail to retain value, utility or desirability.” Babs connects [...]

Chrysler’s Canadian CEO Defends Lineup, Anonymously

Robert Farago — Sun, 21 Sep 2008 12:55:35 +0000

Reid Bigland may sound like the name of a Harold Robbins character, but he’s the CEO of Chrysler Canada. And good for him! But apparently this little factoid is not important enough for The Montreal Gazette. The paper published an article penned by Mr. Bigland entitled “Chrysler: It’s all about great products,” with the sole [...]

Canadian Feds Reheat Yesterday’s Pork

Samir Syed — Wed, 03 Sep 2008 16:05:20 +0000

An old buddy of mine, who became an organizer for Liberal Party of Canada, once told me “nothings smells like elections more than asphalt.” The pre-election release of the purse strings is a tradition as old as democracy itself. Machiavellian and cynical? Damn straight. It now appears that Canada’s federal government is ready to take [...]

Peugeot is Not Coming to the US

Justin Berkowitz — Wed, 27 Aug 2008 14:29:21 +0000

Despite the headline claims of, um, some Motor Authoritative sources , Peugeot is not coming to the United States any time soon. And Canada would be a real stretch. The basis for the claim is that Peugeot is looking to expand the number of markets in which it sells cars, and the French company brass [...]

Ford of CA Prez Quits After Six Months

Samir Syed — Wed, 20 Aug 2008 12:15:38 +0000

As Reuters notes, 90 percent of the vehicles Ford builds in Canada end-up in the U.S. So, despite the fact that the Ford F-series is still the best-selling vehicle north of the border, Ford Canada is suffering. All of which leads to the suprise (really?) resignation of Barry Engle, Ford of Canada's president. Though Engle has [...]

GM Canada’s $5b Pension Shortfall

Samir Syed — Wed, 20 Aug 2008 11:31:11 +0000

When CAW Prez Buzz Hargrove told me a GM C11 is inevitable, I wondered if Canadians might have a more realistic idea of The General's financial health, or lack thereof. The Toronto Star provides confirmation. The paper reports that GM's Ontario workers have noticed that the automaker has taken full advantage of a company- [...]

Ask the Best and Brightest: What Should Samir Ask Buzz?

Samir Syed — Mon, 28 Jul 2008 15:29:53 +0000

Basil "Buzz" Hargrove has been active in the Canadian Auto Workers (CAW) since its inception in 1984, including sixteen years as President. To put that in perspective: during Buzz' tenure at the top, he's seen five Canadian Prime Ministers, five Ford CEOs, four Chrysler CEOs, four GM CEOs and countless union actions. As I sift [...]

GM Pays Oshawa Workers Even After Plant Closes

Frank Williams — Mon, 28 Jul 2008 13:00:21 +0000

After accusations of "betrayal," blockades by the Canadian Autoworkers union, threats of lawsuits against the union and sops tossed to the union, GM is moving ahead with plans to close their truck plant in Oshawa, Ontario. However, it looks like it'll cost them a bit more than they'd anticipated. The Globe [...]

News from the Front: Ford Stops Flex Production, Scales Back Edge

Robert Farago — Wed, 23 Jul 2008 02:42:45 +0000

Our contacts at Ford tell us there's big trouble brewing for The Blue Oval Boys. Two independent sources report that FoMoCo is ceasing production of the fresh-out-of-the-box Flex in their Oakville, Ontario plant. Apparently, the factory has built some 13k xB-shaped CUVs since production began on June 3– and sold [a lot] less than a [...]

Bye Bye Buzz

Frank Williams — Wed, 09 Jul 2008 12:39:14 +0000

Canadian Auto Workers (CAW) union president Basil a.k.a. Buzz Hargrove is stepping down early. Although Buzz was expected to retire when he reached the mandatory retirement age of 65 next year, he's now leaving "soon after" the union selects his successor this summer. His hand-picked heir-apparent is the equally-outspoken not-to-say borderline-militant Ken Lewenza, current president of Windsor, Ontario Local 444. Buzz is leaving amid the controversy we've all come know and love; rumors say the national executive board is pressuring their staff to support Lewenza's bid. The Victoria Times Colonist quotes columnist Gord Henderson, who describes Buzz' golden boy as having a "Dr. Jekyll-Mr. Hyde persona" whose "flights of rhetoric are a wonder to behold, akin to watching Mount Vesuvius blow its stack." So we shouldn't run out of Lutz Award-worthy quotes from north of the border. With Canada's dubious distinction as the highest-priced labor force in the North American and auto industry manufacturers shutting down Canadian plants, Lewenza will have plenty opportunity to display his brand of "old-time table-thumping unionism." So don't go away; we'll be back with more!

CAW’s Basil “Buzz” Hargrove Gets Canadian Gong

Samir Syed — Thu, 03 Jul 2008 13:21:59 +0000

Amidst all the buzz surrounding controversial abortion activist Dr. Henry Morgantaler's elevation to the Order of Canada, you may have missed the fact that the same honour has been bestowed on long-time Canadian labour leader Basil Hargrove, or 'Buzz' as we know him 'round here. The Order of Canada is Canada's highest civilian honour. The National Post reports that Buzz was given the award for "his contributions as a labour leader who is respected on both sides of the bargaining table, and for his advocacy for equality and human rights in Canada and abroad." Though many will argue Buzz was intensely active in keeping Canadian labour costs artificially high, and thus, shares some responsibility for the current decline of Ontario's automotive sector, Buzz's long and illustrious careers remains one of great renown. From his humble beginnings as a Chrysler line worker, to his soldiering for the then-CAW leader Bob White in the 80s, to obtaining his own mandates as leader since 1992, Buzz was instrumental in every major CAW negotiation for the last twenty years. History will judge Hargrove harshly, though, for the closure of GM-Oshawa and the decline in the CAW's bargaining power during his reign.

Friends Don’t Let Friends… Uh, Got Any Brownies?

Samir Syed — Thu, 03 Jul 2008 12:23:23 +0000

July 1st was truly a landmark day for Canadian motorists. In addition to the start of a cell phone ban in Quebec and a carbon tax in British Columbia, drivers across Canada now face huge penalties for driving while stoned. No longer can Canadians re-create the infamous Cheech & Chong hotboxed car sketch. The CNews reports that police can now require drivers to submit to roadside drug tests. In addition, police can force suspected stoned motorists to go to a hospital or a police station for further testing. The whopping penalty for driving under the influence of drugs: CA$1,000 (minimum) for Strike 1 and jail time for Strike 2. Refuse the tests and you've committed a criminal offense. Though it goes without saying in The Sun, all of this is in addition to any other charges for possession and trafficking of classified substances that may be brought. Bummer.

Supplier Fallout Continues: Polywheels Is Toast

Samir Syed — Thu, 03 Jul 2008 12:19:33 +0000

Ontario's struggling manufacturing sector took another blow yesterday. CNews reports that Oakville, Ont-based automotive supplier Polywheels has shut down indefinitely. Workers arrived for their 7am shift on July 2 only to find the plant closed and shut down notices posted at the entrances. The workers, represented by the Canadian Auto Workers (CAW), were surprised that the company shut its doors without warning. "I'm upset because this is a good factory, they had good, good benefits," emotes a local worker in a moment of unionist entitlement. The Toronto Sun reports that American Axle's own strike, which halted production of Polywheels' bread and butter models (e.g. Sierra/Silverado) was a body blow for Polywheels. The subsequent rise in gas prices was the coup de grace, according to another worker: "We figure out how to bring the price of oil down and we'll all be fine." Easier said than done, I suppose. [Thanks for Michael Kirouac for the tip]

Canada Day Brings B.C. Automotive Cash Grab

Samir Syed — Tue, 01 Jul 2008 20:19:01 +0000

Today marks Canada's 141st anniversary. CTV reports that British Columbia's motorists can now look forward to higher motoring costs. That's right, Premier Gordon Campbell's "carbon plan" goes into effect today, costing motorists an extra $0.024/L per fuel in carbon tax. According to Campbell, the plan is "revenue neutral;" any extra revenue will be offset by income tax cuts. The aim, of course, is to tax consumption rather than income, thereby providing an incentive to reduce fuel consumption. Obviously, some of the highest gas prices in the ten provinces (as B.C. has) were not enough. Despite assurance from Campbell, many British Columbians are weary. How can its provisions be enforced without earmarking funds and major transparency?

Canada Spend CA$92m To Cull Clunkers

Edward Niedermeyer — Tue, 01 Jul 2008 13:09:20 +0000

Programs to buy back beaters have been implemented in California and Texas, pulling thousands of polluting vehicles of the road each year. Canada's program to buy back old, polluting cars is set to roll out in January of next year. The Detroit News reports that the three-year Canadian program is targeting 50k buybacks, or about one percent of all cars on the road. While provincial governments have implemented similar programs, this will be North America's first nationwide buyback program. The $92m program will offer drivers $300 per running beater, or discounts on bicycle purchases or a public transit pass. Busting-out the old calculator, it becomes obvious that buying 50k cars at $300 a pop would set back the Canucks $15m. Some $77m of the program will be going... somewhere else. But don't expect opposition to the program. The Alliance of Automobile Manufacturers spokesman Charles Territo says "we strongly support efforts to get older, less-efficient vehicles off the roads and help consumers." Because they'd rather you buy new than drive your clunker till it breaks, of course. Which means the only people who won't be thrilled by this program are people who care how their government spends money... and know how to use a calculator.

Oshawa Blockade Ends

Edward Niedermeyer — Mon, 16 Jun 2008 16:45:15 +0000

The Canadian Autoworkers Union (CAW) ended its two-week blockade of GM's Oshawa truck factory this morning, in compliance with a court injunction. The Detroit Free Press reports that the CAW is ditching the barricades for "other actions." CAW Chairman Keith Osborne tells the Freep that union lawyers will meet today to discuss the possibility of filing a complaint with the Ontario Labor Relations Board. But while the CAW lawyers talk offense, GM spokesfolks are trying to leave the unpleasantness behind: "Now is the time to focus on discussions on new product mandates for Oshawa and support for affected employees." And apparently GM's backing its words with... more words. Bloomberg reports that "GM is in preliminary talks to add a third vehicle at an Oshawa car plant," in addition to the "second car" promised to CAW in their month-old labor agreement. The Toronto Sun says that the Camaro and the unnamed rear wheel-drive "second car" planned for 2011 could be joined by a front wheel-drive model, thanks to the Camaro's flexible production line. Ontario may not be the cheapest or most efficient place to build vehicles, but its tax-dollar giveaways are world class. Expect public money for the third vehicle line to smooth things over between GM and the CAW. It's win-win-- as long as you're not a Canadian taxpayer.

GM Wins Friends and Influences People: Sues CAW for $1.5m

Edward Niedermeyer — Wed, 11 Jun 2008 18:45:16 +0000

Last time we checked in on the Oshawa closure debacle, a GM spokesperson was calling the CAW blockade "understandable." After nearly a week of being barred from Oshawa by angry CAW workers, GM has lost its sense of empathy. The General is asking for a court injunction to end the protest. The Detroit News also reports that although CAW understands why GM wants their 250-car blockade of Oshawa removed, The General's request for $1.5m in damages from the Union comes as a bit of a surprise. Neither side likes the other, and both feel betrayed, so why is GM trying to squeeze an extra million bucks or so out of the situation? GM has said the blockade caused it to lose some production. With cash burning and nothing to gain in Oshawa, well, why not get that back from the union? For CAW, this is just more insult on top of losing the Oshawa plant. In short, this is the desperate squabbling with the short-sighted over the few remaining scraps of a once-healthy relationship. Cheery stuff.

Canadian Feds Discuss GM Bailout

Samir Syed — Thu, 05 Jun 2008 19:13:32 +0000

Canadian finance minister Jim Flaherty awakes!. After years of ignoring calls from Ontario's Premier Dalton McGuinty to subsidize Ontarian jobs, brushing off accusations of inaction vis-à-vis the steady outflow of Ontario's manufacturing jobs to lower-cost areas, Flaherty could hold back no longer. Call it a Shakespearean twist of fate, but of all of the 308 electoral districts in Canada, Flaherty has the misfortune of representing the federal electoral district of Whitby-Oshawa, right where GM Canada lives-- the epicentre of Ontario's ailing manufacturing. Flaherty opened the newsday by announcing a $250m bailout of GM Canada. Except he didn`t call it a bailout. CBC reports the Flaherty will make money-- set aside under an "environmental investment fund"-- available to GM to help it pursue green technology. The move, another possible knee-jerk reaction to the closure of GM-Oshawa, has caught even Dalton McGuinty by surprise. (Dalton hasn`t decided whether to be pleasantly surprised or to, in typical provincial fashion, say it is not enough. Though the conditions of the deal aren't finalized,) Flaherty hinted heavily that the money should be used to replace truck production by smaller car production. Well duh.

GM: CAW protest “understandable”

Frank Williams — Thu, 05 Jun 2008 14:56:19 +0000

Canadian Auto Workers (CAW) union officials are meeting with "top GM officials" about closing the Oshawa, Ontario truck plant. After CEO Rick Wagoner's announcement that The General's terminating Oshawa production-- along with three other plants-- workers blockaded GM headquarters. The Detroit News reports CAW president Buzz Hargrove supports the blockade. Hell, he won't "rule out" the possibility of a strike. Buzz says the Wagoner's announcement was "an insult" as it's been just two weeks since the company promised workers the plant would be open at least until 2011 (what happened to 2010?). GM spokesman Stew Low says the protest is "understandable." I'm sure that really made the workers who are losing their jobs feel better. Maybe next, GM will offer them a spot of tea to go with that sympathy. But don't count on GM changing their plans to ship work from that plant to cheaper ones in the U.S. and Mexico.

Oshawa Workers Blockade GM Offices

Samir Syed — Wed, 04 Jun 2008 16:19:59 +0000

One knee-jerk reaction begets another. As reported yesterday, the Canadian Auto Workers (CAW) wasn't over the moon over the announced closure of GM's Oshawa truck plant. Note: Oshawa IS General Motors. Chevrolet's had a plant in the city since the early 1900s, before Oshawa itself was incorporated as a city. The local hockey team is named for GM. GM-Oshawa employed 2600 direct workers, and no doubt accounted for thousands of other peripheral jobs. So when GM CEO Rick Wagoner sounded the plant's death knell, the CAW's members immediately declared war. Today, CTVNews reports that defiant CAW members, fueled by a desperation that only comes when one has nothing to lose, are blockading the offices until further notice. There's no news of reactions from workers at the other Oshawa plant where they build Chevy Impalas and Buick Lacrosses/Allures. Meanwhile, Toyota and Honda, just as recently as last month, announced billion-dollar investments in Ontario. Hyundai/Kia is also considering moving in. Of course, we all know this story, don't we? Soon, Ontario will be another theatre of war that The General will cede to the Asians, during its long, tragic descent into oblivion.

CAW Betrayed by GM, but Who’s Really to Blame?

Frank Williams — Tue, 03 Jun 2008 15:28:48 +0000

As you can imagine, GM's decision to close their Oshawa truck assembly plant in Ontario, Canada doesn't set well with the Canadian Auto Workers (CAW). "It's nothing short of betrayal," CAW Oshawa branch president Chris Buckley told Reuters. "General Motors is going to produce our truck in Mexico and the United States. That's absolutely disgusting." If he's looking for the real betrayal, he should think back to the contract negotiations in May, when CAW president Buzz Hargrove took a hard line stance against contract concessions, making Canada the most expensive place in North America to assemble cars. Or recall Buzz' statement that "It's my last set of negotiations and my legacy is not going to be that the sons and daughters of current workers that were hired over 20 years ago are going to come in at the same rate in 2008 as their parents did in '86 or '87." It now looks like Buzz' legacy will be unemployed sons and daughters of current workers thanks to his inflexibility driving production out of Canada and back to the lower-paid hands of the UAW and Mexican auto workers. Just sayin'.

The Ethics Of Auto Journalism In Action

Edward Niedermeyer — Thu, 22 May 2008 19:34:38 +0000

Since it began, TTAC has called on all automotive publication to publish disclosure of all manufacturer-provided travel, lodging, food and gifts. The worst offenders: car sections of local newspapers. And no wonder; they remain one of the few profitable portions of many otherwise failing publications. To wit: Joe Clark's [Fawny Blog] take on the Toronto Star's Wheels section. Calling Wheels "a giant moneymaker" for the paper, Clark links to an editorial where the paper agrees that "accepting free travel to preview cars is not ethically or journalistically sound." So no car junkets, right? Wrong. The Star simply hires freelancers and "outsources unethical behaviour." A quote from freelancer Ted Laturnus in an article in the Ryerson Review Of Journalism says it all. "All I can say to the people who think we shouldn't be taking free trips is, 'Go fuck yourself. Come back to me when you've grown up.' They don't know the side of reality to this business. I do. I've been in it for 20 years. I have no patience for that sorta thing. It's the way the game is played." Note to Ted: we're here to change the rules.

Canadian New Car Sales Surge 9%

Glenn Swanson — Mon, 19 May 2008 14:31:02 +0000

According to The Star [via Wheels.ca], Canadian new-car sales rose a bit over nine percent vs. the previous financial quarter. This represents the strongest single-quarter sales gain since way back in the middle of 1998. Analysts attribute the growth to lower prices, incentives and a one percent reduction in the goods-and-services tax (GST). The largest gains (17.8 percent) came from sales of passenger cars. Meanwhile, driving.ca reports on April sales, noting that GM's share of the Canadian pie slipped 13.5 percent. GM said "the drop was a planned reduction in low-profit sales to daily rental fleets." The company spun the news by pointing out that retail sales of The General's passenger cars went up by 23.8 percent in the month of April. Anyway, Ford's Canadian sales slipped by 4.5 percent last month. Winners include Chrysler, up eight percent in April, thanks to a 38 percent increase in the number of minivans driving off the lots. Chrysler Canada adds that it enjoyed its 21st consecutive increase in monthly sales, noting that (just like GM), the company deliberately cut back on fleet sales. Not bad, eh?

CAW reaches tentative deal with GM/Chrysler

Samir Syed — Fri, 16 May 2008 13:31:25 +0000

CTVNews reports that the Canadian Auto Workers (CAW) has reached deals with both GM and Chrysler for its Ontario members. The agreements mirror those that the CAW obtained from Ford. According to the official story: "Workers will see their wages frozen for three years in exchange for improvements in other areas." "Other areas?" Such as not getting fired in the first place? The crux of the deal: Buzz Hargrove successfully delayed the inevitable. GM-Oshawa's planned shift reduction is put off until 2009, and Chrysler's Etobicoke plant, on death row for over a decade, will have its life extended to 2011. Hargrove is spinning the wage freeze as a victory, noting that he's "done the very best to protect as many jobs as we could and protect and support people who won't have a job"-- despite failing to secuire long-term plans for either of the two plants. We now return you to our regular discussion of American Axle's ongoing strike.

Ontario Premier: “No Regrets” Over $250m GM Handout

Edward Niedermeyer — Wed, 14 May 2008 15:42:17 +0000

Canada (like most other developed countries) has a hard time attracting/keeping auto manufacturing jobs due to high labor and tax costs. To counteract these competitive disadvantages, provincial governments often offer car companies tax holidays and other incentives. The problem with these handouts is that they do not guarantee a long-term presence by the bought-off manufacturers. Exhibit A: GM got handouts worth nearly $250m in provincial tax money (and about $200m in federal funds) for its Beacon project aimed at revitalizing its Canadian production facilities. Now, a few short years later, they're cutting some 1400 jobs at their Windsor transmission factory, with another 900 lost due to production cuts at the Oshawa truck plant. Having spent some $7b on various automaker subsidies without receiving a single job guarantee, Ontario Premier Dalton McGuinty is coming under fire. "The more money this government invests in a company, it seems the more jobs are lost," says Progressive Conservative MPP Bob Runciman. But McGuinty ays he "doesn't regret" giving the money to GM (at least until the next election). Report on Business tells us that GM is set to ask the Ontario government for another $140m to build transmissions at its St Catharines plant. Oh, and don't expect GM to offer any job guarantees, either.

GM Closes Windsor Tranny Plant

Samir Syed — Tue, 13 May 2008 00:51:06 +0000

CTV reports that General Motors is closing its transmission plant in Windsor, Ontario by 2010. The plant currently employs 1400 workers producing ye olde four-speed automatic transmission. GM Canada's Stew Low offered an explanation that made no mention of a warning shot over the Canadian Workers Union (CAW) bow, in advance of contract negotiations. "With the dynamic of our changing portfolio, there just wasn't a new transmission to put into there." Translation: four-speeds are so 1939 and you guys cost too much. The announcement caused some political scuffles. The provincial (left-leaning) NDP party implored Ontario Premier Dalton McGuinty to step in and stop the rampant job losses in the automotive industry. As The Big 2.8 have shuttered plants and moved production to cheaper jurisdictions, investments from Asian automakers have not risen to produce employment break-even. It's a shame too, since Windsor was on a roll. On the plus side, given Ontario's more diversified economy, it appears it can shelter a contraction of the NAFTA-zone's automotive industry with less pain than Michigan. But, unless a career at GM provides a good stepping stone to working on Bay Street, that won't soothe any of the CAW members' worries.

CAW Turns its Guns on Struggling GM, Defenseless Chrysler

John Horner — Tue, 06 May 2008 14:21:52 +0000

The Canadian Auto Workers (CAW) have ratified a generous deal with Ford-- frozen wages, no two-tier tears at bedtime-- by a reported 67 percent margin. (I guess the other 33 percent thought they could get blood out of a stone). Even more flabbergasting: the contracts aren't even up until September. CAW boss Buzz Hargrove says [via The Detroit News] that GM and Chrysler will go down just as fast, just as hard. "They will accept the same economic terms. It's only a question of when. I'm hoping it will be in the next week or so." Not so fast, Mr. Bond. Chrysler's teetering on the brink of bankruptcy. They got no game. And GM, well, GM's got 32 U.S. plants off-line (including all the key ones), the prospect of more union action to come, sweet F.A. going on in its high profit margin SUV and truck biz, and a cash conflagration that could heat Hoboken for a week. Buzz? Buzz wants GM to commit more product to the Ontario factory. Never mind that the Peso is worth less than a Canadian Loonie. Or the fact that GM builds trucks in five other factories, including two in Silao and Toluca, Mexico). Still, look for GM to roll over and play dead (it's who they are and what they do), while Chrysler delays the inevitable (selling everything to Magna) for as long as possible.

Canadian Government Struggles With Biofuel Issues

Glenn Swanson — Wed, 30 Apr 2008 14:21:46 +0000

Last year, the Canadian government initiated an "aggressive push" to produce fuel from crops. The 2007 federal budget included a C$2.2b support package for biofuels. According to a report in the Globe and Mail, "political consensus in favor of biofuels is suddenly breaking down." Member of Parliament (MP) Keith Martin thinks it's time to step back and "put a moratorium on it now so people can actually wrap their heads around the facts; the current biofuel strategy is deeply misguided." The president of the Canadian Renewable Fuels Association claims "the issues that come up have nothing to do with food supply." Gord Quaiattin says concerned Canadian should blame rising oil prices for food costs. "Everybody's screaming about 'food for fuel'; it's too bad we can't have a rational debate in this country," sighs MP David McGuinty. Still, it may be too late to shut the door: the government has poured billions into a biofuel facilities fund. Fourteen plants are running already and six more being built- so this horse may have already left the barn.

GM Cuts Truck Production, Big Style

Edward Niedermeyer — Tue, 29 Apr 2008 16:22:50 +0000

The Detroit News reports that GM will be cutting one shift from its Flint, Pontiac, Oshawa, Ontario, and Janesville, WI factories by July 14. The slashing eliminates some 3,500 jobs from GM's North American workforce. The move eliminates produciton of some 50k body-on-frame vehicles-- which have already fallen 100k due to the ongoing American Axle strike. Analyst Joe Phillippi of AutoTrends Consulting says this is gonna leave a mark. "These are the most profitable things they make, and losing those profits is going to hurt for the next three quarters." Still, there's no point in building 'em if nobody wants to buy them; GM has seen a 17 percent decline in pickup sales and a 29 percent drop in large SUVs in the first quarter of this year. Sure, cutting makes the powerless feel like they're in control, but until GM goes "down the road, not across the street," expect the misery and moodiness to continue.

Garbage Truck Bagged For Street Racing

Edward Niedermeyer — Mon, 28 Apr 2008 16:15:43 +0000

Here's another one for TTAC's new Whisky Tango Foxtrot category... Ontario's new anti-street racing laws were enforced for the first time when a garbage truck was clocked doing about 70mph in a 40 mph zone. The Record reports that the Great Lakes Waste Management truck would be impounded for seven days, and the driver's license suspended for a week-- on top of a $2,000 fine for street-racing. The citation has caused the Ontario police to expand its investigations into alleged street racing beyond the initial targets ("young men in cars," surprise, surprise). Their undue diligence now includes commercial vehicles. "The more we apply this new legislation, we're seeing this problem is across the board," says Ontario Police constable Joanna Van Mierlo. That, or garbage truck drivers are far more dedicated to time efficiency than previously thought. Talk about going like stink! [thanks to QuasiMondo for the link]

Oil Headed for $225 A Barrel?

Samir Syed — Fri, 25 Apr 2008 17:11:57 +0000

As billions pour into projects aimed at making the Canadian prairies the world's largest exporter of crude oil, supposedly insulating Canada from an American economic downturn, two major Canadian news sources foreshadow a gloomy future for The Great White North. Canwest News (via Canada.com) quotes a study conducted by CIBC World Markets (the investment arm of the Canadian Imperial Bank of Commerce) that suggests oil prices could surge to $225 per barrel by 2012. That would push Canadian gasoline prices to about $2.25/L (or about $8 gallon at current exchange rates). According to Jeff Rubin, World Market's chief economist, oil supplies are static; demand isn't. "[For] every extra driver that gets a car and goes on the road in those (developing) countries in the next five to six years, somebody's having to get off the road in the OECD countries." Meanwhile, Montréal's La Presse ran the results of a study conducted by energy analyst and longtime doom-and-gloomer Patrick Déry. He predicted Peak Oil's (long-awaited?) arrival in 2018; Québec and other net importers of energy will run out of oil supply by 2030.

Alfa to Build Cars in Ontario. Or Not.

Samir Syed — Thu, 24 Apr 2008 12:10:33 +0000

FIAT, the parent company of Alfa Romeo, is considering launching its return to North American soil using Ontario as its home base. So says CTV News, though FIAT chairman Sergio Marchonne has not acknowledged any talks with Ontario's government-- but has set a goal of building a New World Alfa Romeo by 2012. Ontario can bank on a small home-field advantage; Marchionne was raised and educated in the Toronto area. A joint venture is possible, given that any Alfa will initially be a low-volume niche vehicle. Ford, Chrysler, Toyota, General Motors and Honda are all well-established manufacturers in Ontario. The downside: most of these Alfas are destined to be sold in the U.S. Building cars in Canada is a mighty pricey proposition. Besides, could a car built by a bunch of overall-wearin', double-double-drinkin' Toronto Maple Leafs fans named "Duggie" and "Murray" still have what pistonheads refer to as "Alfa-ness?" Che macello!

Chrysler Financial Loses Personal Data; Tells Customer Six Weeks Later

Robert Farago — Thu, 24 Apr 2008 10:48:08 +0000

First, we're talking Chrysler Financial Canada. Second, the story in The Windsor Star omits a crucial piece of data (ironically enough): how many Chrysler customers were affected by the missing tape containing customer names, addresses and social insurance numbers. We know there's one, for sure, and he's more than a bit miffed at the delay between the Chrysler's data loss and the heads-up. "Chris Jovanovic, who leases a car from Chrysler, said the company was notified by United Parcel Service about the lost tape on Mar. 12 but a letter from Chrysler Financial dated Mar. 27 didn't arrive in his mailbox until Monday." Said letter assured Jovanovic "The data tape cannot be easily accessed and requires specialized software and equipment to read." So that's alright then. Not according to Jovanovich. "Someone who knows what they're doing could probably access the information. Nothing's that secure these days and it annoys me to think that if the tape never shows up, will we be looking over our shoulders for years waiting for the information to be used." While Jovanovich is seeing red (and a lawyer), Chrysler's no longer using brown. A spokeswoman said "after the tape went missing, internal processes were changed and the information is now sent by secure electronic transmissions. UPS is no longer used." So, bad publicity all 'round, eh?

GM Taunts CAW with U.S. Transplants’ Compensation

Frank Williams — Fri, 18 Apr 2008 12:10:59 +0000

GM Canada is going on the offensive re: its contract negotiations with the Canadian Auto Workers (CAW) union this September. They've released a "background paper" claiming the total cost (wages, pensions, benefits, etc.) for one hour's work in Canada runs the automaker $77.75. Instead of comparing those wages to other industries in Canada or "core" U.S. GM workers' ($70/hour), the paper uses the U.S. transplants for comparison ($47.50/hour). Report on Business quotes GM Canada spokesman Stew Low: "The status quo just won't do." CAW president Buzz Hargrove responded with righteous indignation. "I've told Rick Wagoner, I've told the head people at Ford and Chrysler - all of them - that there's absolutely no way in hell [we'll agree to reductions in wages, health care benefits or pensions]." The CAW says it's willing to "look at" the amount of paid time off they get. GM claims CAW employees get 155 more hours per year off and 16 minutes break time a day than... the transplants. Fair enough?

GM Slowing Impala Production, Laying Off Third Shift

Frank Williams — Wed, 16 Apr 2008 14:09:25 +0000

The Chevy Impala showed a 1.8 percent gain in sales in March. At the first of April, GM only had a 21-day supply on the lots. The factory in Oshawa, Ontario has been running three shifts with Saturday overtime for several months. So why are they suddenly cutting back on production? An industry source (yes, we have them too) tells us that GM's canceled Saturday overtime and laid off the third shift until further notice. Rumor has it the American Axle strike is affecting the plant; although it wasn't previously identified as one threatened by a parts shortage. The more likely scenario: Chevy's filled all its Impala fleet orders. With overall sales down 11.1 percent for the year, and the distinct possibility that Malibu sales are (as predicted) cannibalizing the Impala, GM's simply slowing Impala production to meet retail demand (or lack thereof). The sales numbers over the next few months will throw some light on the truth of the matter. We'll keep you posted.

Canadian Auto Sales Soaring. In a Way.

Matthew Neundorf — Thu, 10 Apr 2008 15:57:59 +0000

While Standard & Poor's are planning for a seven percent slide in auto sales for the U.S. of A, things north of the border are looking up. The CBC reports that the Canadian automotive market will nip at the heels of last year's totals (their second best year ever). The forecast comes courtesy of DesRosiers Automotive Consultants head honcho, Dennis DesRosiers. After seeing double-digit jumps throughout the first quarter, Dennis deduced an improved forecast was due. DesRosiers reckons the strong Loonie, decreased taxes (one percent G.S.T drop), and healthier Canuck economy will entice more Canadians to throw down for price-reduced whips this year. Don't figure on this news making up for the U.S. slide though. The improved forecast accounts for a mere 8k unit improvement (1.645m total).

Pedal-power Buick Ruled Safe Enough

Samir Syed — Fri, 04 Apr 2008 09:57:15 +0000

I'll give TTAC's Canadian readers the bad news first: As the summer driving season approaches, gas prices in Canada are nearing record highs established in the wake of Hurricane Katrina. The good news? CTV reports that a recent ruling in Ontario has reversed a ticket issued to a Montreal artist who was charged with driving in unsafe car through downtown Toronto. Michel De Broin took his 1986 Buick, removed the engine, suspension, gearing, electrical systems and floorboards and replaced it all with tea-candles for headlights and a "shared propulsion" pedalling system, where all passengers in the car can contribute to its advancement by pedalling (top speed is 15 km/h, or about 9 mph). Justice Patrick Marum ruled that the Crown had failed to prove the car was dangerous, and the charges of operating an unsafe motor vehicle that De Broin faced were summarily dropped. Take that, Tata! If this ruling sets a precendent, Canada has moved ahead in the race to bring legal, zero-emissions cars to North America.

Québec & Nova Scotia Drivers: BEWARE

Samir Syed — Wed, 02 Apr 2008 20:11:11 +0000

On April 1st, 2008 significant modifications to road safety regulations in the Canadian provinces of Québec and Nova Scotia went into effect. CTV.ca reports that handheld cellular phones are now verboten while at the wheel, though hands free devices are still tolerated. Nova Scotia will begin ticketing the offense immediately, while Québec has allowed for a three-month grace periods in which offenders will only receive stern warnings and moralizing sermons. The first offense in Nova Scotia will cost $165, while costing $80-$110 and three demerit points in Québec. Still not satisfied, road safety advocate Jean-Marie de Koeninck argues that "[h]ands-free is just as dangerous. (But) by forbidding the hand-held it does send a signal that there is a problem with the cellphone, there's a problem with concentration". Meanwhile, the same traffic safety bill in Québec also doubled all speeding fines , with new suspension of license provisions for those caught traveling at 40 km/h over the limit in under-60 zones, 50 km/h in 60-90 over zones, and 60 km/h over in 100+ zones. All in the name of safety, presumably.

Canadian Feds to Spend $90m on Clunker Recycling

Samir Syed — Wed, 02 Apr 2008 19:45:51 +0000

CTV.ca reports that John Baird, Canada's firebrand Minister of the Environment, has green-lighted a $90 million vehicle scrappage program. In essence, the objective of the program is to encourage Canadians to trade in their high-emission beaters in favor of credits on a new car. CTV notes that "[t]hese older vehicles make [...]

Ford Offers to Sell 300 Jobs to Ottawa

Edward Niedermeyer — Tue, 01 Apr 2008 16:03:49 +0000

Ford confirmed yesterday that $16.5m in ~~bribes~~ public money from the province of Ontario was a crucial factor in its decision to reopen the Essex Engine plant in Windsor, Ontario. The Toronto Star reports that Ford says it will expand the Windsor reopening to include a further 300 jobs, but only if the Canadian federal government makes with more pork. "We are not able or willing to move forward with the second phase of the project until we can find resolution to all the issues we have outstanding with the governments," said FoMoCo group VP Joe Hinrichs. Translation: we won't add more output without more federal assistance input. For perspective, some 900 jobs were lost when the factory was shuttered by Ford in November, 2007. Naturally, CAW President Buzz Hargrove is lending his considerable ~~extortion~~ negotiating experience to the project, arguing that the 300 additional jobs would surely be worth a few mil in taxpayer lucre. The sad part? With Canada's manufacturing sector in the statistical scrap heap, Ottawa just might go for it.

Ford Reopens Windsor Plant

Edward Niedermeyer — Mon, 31 Mar 2008 18:36:05 +0000

Bloomberg reports that Ford is investing $165m in its Essex Engine plant in Windsor, Ontario. The plant, which has been shuttered since November, will produce an unnamed new Ford engine, and will return 300 jobs to the province. The plant refurbishment was made possible by a $16.5m investment by the Ontario provincial government, or about $55k per job created. Although Ford refuses to comment on exactly which engine will be produced at the plant, timing seems to indicate that the new EcoBoost line of turbocharged, direct-injection engines could be a prime candidate. With the first EcoBoost V6 set to debut as an option on the Lincoln MKS in 2009, and planned as an option across the Ford line aimed at lowering fleet fuel consumption, this EcoBoost is a rare investment at a time when Ford is trimming its manufacturing profile. The Canadian Auto Workers have been angling for a Ford engine project for some time, although CAW President Buzz Hargrove hinted that a fuel-efficient 5-liter engine might be in the works for Windsor. Whatever the engine, this is big news for the CAW, which lost a quarter of its D3-employed membership in the last three years alone.

Hargrove: “Cerberus Misled Us”

Edward Niedermeyer — Wed, 26 Mar 2008 19:18:38 +0000

CAW President Buzz Hargrove has been in a feisty mood lately. After telling all of Detroit where it can stick two-tier wages, Hargrove got personal with Cerberus Capital Management, owners of Chrysler LLC. Bloomberg reports that Hargrove is irate at the three-headed hedge fund over promises its president made while seeking support for its purchase of Chrysler. Cerberus President Steve Feinberg had "promised that they weren't going to slice and dice and sell,'' Hargrove said in an interview. But with Chrysler cutting tens of thousands of jobs and slashing its model line, the CAW leader smells betrayal. "We were misled," says Hargrove, "(Feinberg's) trying to cut his way to profitability, as opposed to grow(ing) the business... (he) has never met with us since then to explain the shift in thinking." Of course, most people don't expect private equity groups like Cerberus to operate accountably, and strip-and-flip rumors have been plentiful since the Cerberus takeover. So what finally made Hargrove think that Cerberus wouldn't make good on its promises? The axing of Chryslers Pacifica CUV. Thats right, Hargrove calls the cancellation is "very concerning" because the crossover segment is hot at the moment and "they discontinued it without having a replacement." Anyone think Buzz ever looks at the sales numbers?

CAW Prez Buzz Hargrove Says No to Two-Tier Wages. Again. Still.

Matthew Neundorf — Wed, 26 Mar 2008 15:29:18 +0000

Stop me when this sounds familiar. Canadian Auto Workers (CAW) boss Buzz Hargrove says his brotherhood is "committed to get at the costs" that Canada one of the the world's most expensive places to build cars. Yes, well weakening Canada's currency is quite an ambitious undertaking. And "getting at" costs is one thing; reducing them another. The Globe and Mail reaffirms that Hargrove's legendary ~~intransigence~~ tough stance continues. Buzz' boyz won't agree to the North American template, that sees significant wage and benefits reductions for car assembling newbies. Buzz figures "It's my last set of negotiations and my legacy is not going to be that the sons and daughters of current workers that were hired over 20 years ago are going to come in at the same rate in 2008 as their parents did in '86 or '87." To that end AOL Money Canada reports Buzz' boyz are strike-ready if the two-tiered wage thang becomes a sticking point. Did I say "if?"

Canada Sees Record Drop In Car Prices

Edward Niedermeyer — Fri, 21 Mar 2008 20:04:42 +0000

The Financial Post reports that car prices in Canada have plummeted 6.8 percent last month, the biggest drop since 1956. The number comes from Statistics Canada's February inflation report, which reportedly shocked even the economists who collect the data. Vic Singh, chief economist at the Canadian Auto Dealers Association explains the phenomenon as an "accumulation of several months of falling prices, as the soaring Canadian dollar forces auto dealers to cut sticker prices in an effort to keep consumers from heading south of the border to get a better deal." A strong Canadian dollar, aggressive manufacturer incentives and increased demand for compact cars are also cited as reasons for the sharp downturn in prices. Of course, good old Econ 101 analysis indicates that this is what the textbooks call market self-correction, as Canucks have been paying high premiums on their vehicles for years compared to their American neighbors despite the strong loonie. Check out a slideshow comparing prices in Canada vs. US in November, 2007 here to see what we're talking about.

Toyota: 1; IAM: 0

Frank Williams — Thu, 20 Mar 2008 12:37:28 +0000

The IAM has backed down, at least for now. Reuters reports that the International Association of Machinists and Aerospace Workers withdrew its bid to organize Toyota's Cambridge, Ontario plant after they found out they didn't have enough signatures to force a vote. When the IAM filed for the vote, they said [...]

Korean Domestics Top Operating Cost Study

Samir Syed — Tue, 18 Mar 2008 21:10:35 +0000

Montreal's largest French language daily has published a study on its site comparing 250 vehicles available for sale in Canada on the basis of MRSP, city fuel consumption, highway fuel consumption. Even better, La Presse published the numbers in a Microsoft Excel file where the findings & methodology are bare for all to see, giving full license to challenge the article's findings. (Imagine Car & Driver or Consumer Reports doing this!) For example, the study's author, Canadian auto-journalist Alain McKenna, states that American cars top the study by having the lowest operating cost per year. When I sorted the file, I noticed the top three cars were The Chevrolet Aveo, the Pontiac Wave and the Suzuki Swift+. If by "American", he means "Captive Korean imports badged by General Motors", I suppose he has a point. He also fails to consider depreciation and maintenance expenses, which tend to be much higher on domestics. Still, it's quite an interesting spreadsheet to review if you're a numbers geek like I am. McKenna also points out that some of the cheapest vehicles are not what you'd expect, noting that three pick-ups, The Ford Ranger, Chevrolet Colorado and the Mazda B2300, all beat out the Toyota Prius. Speaking of the Prius, where did it end up? In 67th place, just edging out the V6 Mustang by $0.04/100 km of operation.

Union Alleges Unfair Labor Practices at Ontario Toyota Plant

Frank Williams — Tue, 18 Mar 2008 14:06:13 +0000

According to The Financial Post, The International Association of Machinists and Aerospace Workers (IAM) is accusing Toyota of "unduly influencing employees to vote against a union in a certification vote." In a complaint filed Monday with the Ontario Labour Relations Board, the union says Toyota Canada is distributing anti-union documents to employees and putting "vote no" signs inside the plant where they build the Corolla, Matrix and Lexus RX350. The move is largely seen as saber-rattling ahead of this Thursday's unionization vote. The stakes couldn't be higher. If the IAM gets its foot in the proverbial door, Cambridge will be ToMoCo's first wholly-owned unionized North American plant. Thin end of the wedge? An excuse to slowly shift production out of Canada? Or yet another thwarted attempt to infiltrate the world's largest automaker's NA ops? We should know by week's end. Meanwhile, Automotive News [sub] reports that workers at two Johnson Controls factories (Alabama and Mississippi) rejected the United Auto Workers' [UAW] efforts to unionize the workforce. It's a major defeat for the UAW; Johnson is the fourth largest U.S.-based automotive parts supplier.

Canada: Fuel Economy Trumps Safety

Donal Fagan — Thu, 13 Mar 2008 15:19:52 +0000

Last January, Transport Minister Lawrence Cannon said that Canada will match California's fuel-consumption benchmarks for new cars and light trucks. (Quebec and Manitoba have pledged to adopt them while Ontario warns that its automakers can't possibly meet them.) The Canadian Press reports that Transport Canada is studying the trade-off between fuel-economy and safety. Even before the results are know, Canada's greens are up in arms. Clare Demerse, senior policy analyst at the Pembina Institute: "I would hope that the government would not, in any way, use this kind of research... as an excuse not to go the more aggressive vehicle efficiency standards." George Iny, president of the Automobile Protection Agency: "If you could reduce some of the presence of those large-type vehicles, unyielding full frames, you would be improving vehicle safety most likely." Why let the facts get in the way of PC public policy?

What Did Chrysler Do To Deserve All This?

Frank Williams — Wed, 12 Mar 2008 13:13:06 +0000

A few days back we asked "Does God Hate Chrysler?" We're beginning to think that was more than just a rhetorical question. Regardless of your theological beliefs, it's obvious Chrysler has pissed off someone on a higher plain of existence. Hot on the heels of broken equipment, bankrupt suppliers and assembly plant fires, a "mechanical problem" forced Chrysler to shut down their main office in Windsor, Ontario. Mlive doesn't identify the culprit, but they revealed that the utility company has cut off the building's water and power. Chrysler hasn't said how long it'll be before their Canadian HQ is back in operation. Farago thinks there may be a terrorist/disgruntled employee lurking behind the scenes. I'm thinking Bob Nardelli needs to hire an exorcist.

GM? BUY!

Robert Farago — Sun, 09 Mar 2008 13:10:21 +0000

"It is not hard to imagine a time in the not-too-distant future when General Motors Corp. will not exist. In fact, a lot of investors are imagining such a scenario... The GM-is-dying argument is certainly compelling, which is why the stock is down 75 per cent over the past eight years." Of course, the Globe and Mail's eye-opening lead is the prelude to an argument that GM's shares are undervalued. David Berman says GM could be a terrific buy IF the automaker returns to profitability. "A number of savvy institutional investors, not exactly prone to making silly guesses, are making big bets on a recovery." The "number" of investors adding to their GM shares seems to be one: "Legg Mason increased its holdings in GM by 5.4 million shares at the end of 2007, bringing its stake to 15 million shares." Yes, well, good luck with that. The more important point: the Mail's tacit admission that The General is in a fight for its life which it could well lose. This marks a fundamental shift in perception. If the [erstwhile] car-buying public picks-up this vibe (so to speak), it could further depress GM sales, which would push them further and faster towards Chapter 11. Send in the flacks, STAT!

Hyundai Lowers Canadian Prices

Samir Syed — Fri, 07 Mar 2008 12:03:16 +0000

Finally, it looks like the other shoe is dropping. Nine days after Toyota slashed prices on 16 of its Canadian models, its greatest emulator, Hyundai, has followed suit. CanadianDriver.com reports that Hyundai has recently clawed back the prices the Tiburon and the Tuscon L by $3,000 and $4,200 respectively. So how does this stack up against U.S. pricing? According to Hyundai.com, a new base-level Tiburon now costs $15,995 in Canada vs. $17,025 south of the border. The Tuscon is now cheaper north of the border, at $16,995 versus $17,235 in America. Before you Americans start drafting your business plan around a Canadian domestic market importation scheme, beware: the base Sonata is still more expensive in Canada, relieving of you $18,995 Canadian or $17,670 American. Now that Chrysler, Toyota and Hyundai have put the squeeze on dealers at other car companies' franchises, we expect many more "adjustments" to come. [thanks to Dave McDonald for the tip]

Canada Kills Clean-Car Rebate Scheme

Samir Syed — Thu, 28 Feb 2008 23:25:00 +0000

The Government giveth, and the Government Taketh. In the same budget that contained a $250m initiative for Automotive Innovation to help the Canadian auto industry make the transition to greater mandated fuel efficiency, Canada's Conservative government quietly canceled the Clean-Car Rebate scheme. Introduced in the 2007 budget, the rebate provided up to $2000 cash back to consumers who purchased new cars with high MPG ratings. The Canadian Press reports that the rebate still applies to vehicles up to the 2008 model year, but expires in March of 2009. Union appeasement may have been behind the kibosh, as virtually all of high mpg whips covered by the scheme were imports. In any case, environmental groups lambasted the Clean-Car Rebate's extinction. "They've missed a great opportunity to be a global environmental leader," declared Andrew Van Iterson of the Green Budget Coalition. "Canadians want to be a leader - and the government's not catching up." Lead, follow or green out of the way?

Leasing Companies Sue Mercedes, BMW, and the Canadian Government

Frank Williams — Thu, 28 Feb 2008 14:41:44 +0000

Two leasing companies are taking issue with Canada's restrictions on importing vehicles from the U.S. Globe and Mail reports Forunier Leasing and Canadian Auto Associates have filed a class-action lawsuit against Transport Canada and the Canada Border Services Agency alleging they're part of a conspiracy to keep vehicle prices high. BMW Canada, Mercedes-Benz Canada and Mercedes-Benz USA are also named in the suit. The leasing companies claim Canadian import requirements reduce competition and raise prices 20 to 35 percent above similar U.S. models. They also say government restrictions on importers add additional costs. M-B Canada had no comment. BMW Canada said they weren't aware of the lawsuit, which seeks damages in excess of $1b.

Canada Doesn’t Heart Low Speed Vehicles (LSVs)

Donal Fagan — Mon, 25 Feb 2008 11:50:29 +0000

Canada's ZENN, Dynasty and Electrovaya make small, four-wheel, electric cars classified locally as Low-Speed Vehicles (LSVs). They mostly sell these zero emission machines to Americans as Neighborhood Electric Vehicles (NEVs). Though the 25 mph max speed NEVs must be approved at the local level, they are potentially legal on 35 mph roads in 40 US states. The Canadian EV makeers desperately want to sell their products in their home market. As The Toronto Star reports, both Transport Canada and Ontario's Ministry of Transportation restrict the sedate LSVs to "planned" areas like campuses and retirement communities; LSV owners are legally banned from taking their chances among Canada's mix of normal, fast and insanely fast traffic. While slower bicycles and scooters also use Canada's streets, officials are hung-up on the fact that the LSVs look like cars but don't have airbags, side-impact reinforcement or meet any crash-test standards. Makes sense, but is it sensible?

Hargrove’s Hard Line

Frank Williams — Thu, 21 Feb 2008 17:56:29 +0000

Although Canada is the highest-cost location in North America in which to build a car, Canadian Auto Workers (CAW) union president Buzz Hargrove maintains he'll allow no concessions on salary or benefits in the contract negotiations this year. "We're not going to try to buy jobs by being the cheapest workers in the world," he told CAW workers meeting in Toronto. The Globe and Mail says Harvgrove and his hired economist, Jim Stanford, both deny the concessions given by the UAW last fall are equivalent to a $25/hour labor cost reduction. The fact that the exchange rate has driven Canadian wages and benefits to the equivalent of $80/hour in the U.S. is irrelevant to Stanford. He claims the higher productivity in their plants more than makes up for the cost difference between the average CAW and UAW worker. We'll see how long this posturing lasts once the negotiations start. At that point, it will most likely turn into a bidding war between the CAW and the UAW for the "right" to build new and existing product.