By Frank Williams
February 21, 2008
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.
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POWERED
February 21st, 2008 at 2:21 pm
And the band played on.
This represents a special kind of entitlement mentality.
February 21st, 2008 at 2:26 pm
“We’re not going to try to buy jobs by being the cheapest workers in the world,”
Strange I don’t remember the CAW being asked to lower their wages down to the level of China.
February 21st, 2008 at 2:44 pm
It would be informative to have a few facts on this whole thing. How many CAW person hours are involved in building a car thus how much CAW cost is in a car? Since Canada has universal health care, how much does the employer (GM) save per car in this regard, not only while they’re employed but after they retire too? Of course the employer would like people to work for less, but since the decision seems to be, at least sometimes, whether to build in the US or Canada, having some info would be enlightening.
Also very important of course is currency. The $CA is very high now compared to the past, so what can be predicted about this?
February 21st, 2008 at 2:54 pm
$80 an hour?? Sheeesh. I don’t make that much as a 30-year old MBA!
February 21st, 2008 at 2:59 pm
Just keep it up Buzz Baby… Soon you’ll be be a Union of One.
February 21st, 2008 at 3:23 pm
AKM: another 30 year old MBA here, and I agree with you.
Me thinks we need to find new jobs. :)
February 21st, 2008 at 3:50 pm
Sajeev: true that. Although said jobs will probably disappear soon, and no wonder why.
February 21st, 2008 at 4:08 pm
Of course both MBAs no doubt realize the $80/hr includes all benefits, and it’s an average wage (antiquated union rules include lots dealing with seniority).
I’d like to know how Toyota is dealing with this. Ford and Chrysler haven’t said much, and GM’s posturing has so far amounted to shots across the CAW bow. As in: not much.
I suppose we’ll see come Judgment Day.
February 21st, 2008 at 5:07 pm
Your going to get jobs by being the most expensive in the world?
February 21st, 2008 at 6:02 pm
Scariest part is Buzz isn’t bluffing. Before negotiations end he may come to his senses, or be brought kicking and screaming into making a deal but he will not accept 2 tier wages if there is anything he can do to prevent them. It just to much against the beliefs of the old union man who plans on retiring in 2009 after laying waste the future of his workforce.
Canadian health care is not as great a savings as commonly thought. Prescription drugs, dental, eye glasses, private hospital rooms and more are not covered. It still costs the company a great deal of money.
February 21st, 2008 at 6:50 pm
Here is an idea. If the CAW is so much better at making cars, why don’t they take over the plants on a lease and build the cars under contract. You know, compete in the market like EVERYONE ELSE.
If they can do it better, they get a raise, if not, too bad.
February 21st, 2008 at 7:42 pm
Canadian health care is not as great a savings as commonly thought. Prescription drugs, dental, eye glasses, private hospital rooms and more are not covered. It still costs the company a great deal of money.
Of those listed, drug costs are the most expensive in the US, and we know they are much less in Ca. I lived in Canada for several years, and my strong impression was that dental care was part of the national health plan. I remember my dentist taking pity on me since I didn’t have ‘insurance’. But again, we (nearly everyone here) just don’t know what the numbers are.
February 21st, 2008 at 7:48 pm
“why don’t they take over the plants on a lease and build the cars under contract.”
Ha! I remember an interviewer posing that question to a CAW representative back when Chrysler was up for sale. It was necessary to revive the CAW gentleman with smelling salts. He’s recovering, but they say he’ll never be the same. He just sits quietly by the radiator, gazing out the window at the passing seasons.
BTW, re the dental plan; a lot of employers offer dental insurance, but it isn’t part of the national health plan.
February 21st, 2008 at 8:07 pm
Another mistake that Americans make about Canada health care is that it is a ‘National Plan’. Health care is run and mostly paid for by the provinces and each province has their own plan. The feds only pay 10 or 15% and dictate to the provinces how to run the plans. The health care originally was started by the province of Saskatchewan. Kinda like why doesn’t Michigan start its’ own plan. With the advantage of ‘free’ health care companies would rush back to invest in the state.
February 21st, 2008 at 8:15 pm
Buzz is gonna have to take a haricut, or else his whole head will get chopped off.
I feel bad for Mikey