Bailout Watch 521: Canadians Hosed by Chrysler

by Robert Farago

Published: May 6th, 2009

bailout watch 521 canadians hosed by chrysler

Time steps up to the e-plate with some timely cross-border bailout comparative analysis. “Canada is paying a significant premium over the U.S. to save Chrysler jobs at home, with no guarantees that the billions it is laying at the automaker’s door will ever be repaid or do anything to help maintain the country’s 20% production share of the North-American auto industry.” Drum roll . . . “Ottawa and the Ontario government are contributing a total of $3.2 billion in loans to keep Chrysler Canada alive, including $850 billion extended to the ailing automaker at the beginning of the year.” No, no, it’s a misprint. But even so, “the Canadian rescue package works out to more than $340,420 for every employee at Chrysler Canada, which has 9,400 hourly and salaried workers on payroll. That’s 15% more than the $295,000 per employee that Washington is shelling out to save about 40,000 Chrysler jobs in the U.S.” Why do I get the feeling that these numbers are lowball estimates? Because they are?

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4 of 33 comments

Psarhjinian on May 07, 2009
NO! psar never.As matter of fact I’m a card carrying Liberal,and proud of it Which was my point. People seem to have this impression that the union votes in a block, usually for the party they don't like. Every union person (CAW, Teachers, Steelworkers) I know who votes, votes Conservative. Every single one. I suspect it's not quite as linear in the US, but highly doubt that, of the half-million UAW workers, even half that number show up to vote, and less than that would vote Democrat. But of course, there's a conspiracy. (I'm a former NDP'er and a current Green, myself, but that shouldn't surprise)

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Don1967 on May 07, 2009
Certainly this must be million, I doubt the Canadian govermment has nearly a trillion dollars for anything. Either it is a typo as you say, or it includes the U.S. totals. If Canada had that kind of cash lying around we would have bought Jamaica by now.

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Psarhjinian on May 07, 2009
The worst case scenario here is that a bunch of people retire and end up on Gov’t old age pension rather than having their private pension to support them. This is definitely cheaper than guaranteeing private pension plans. That's not the worst-case scenario. I don't think people who don't live in an auto-industry town appreciate how much spending power automotive pensioners actually have. In Ontario, you'd be putting a bullet in St. Catharines, Whitby/Oshawa/Bowmanville and Windsor/Chatham. Brampton and Oakville will take it on the chin, too. Put it this way: there are very few young guys working at GM, Ford or Chrysler and they're not exactly hiring. There are a lot of people who used to and have retired or been bought off. If their pensions disappear, so does a big chunk of money spent in the local economy. You'd create an instant rust-belt that will, frankly, cost more to fix than it would to avoid in the first place If I were the government, I would be ensuring these pensions stay in place for one or two years, and start putting programs together in that time so that there's somewhere for these people to turn because, quite frankly, they're not all that employable. Especially if I was, oh, the federal Conservative Finance Minister (Jim Flaherty, Oshawa), Justice Minister (Rob Nicholson, St. Catharines), or the conservative MPs for Oakville. Young people by and large don't vote Conservative. Women don't vote conservative. Unemployed poor people don't vote conservative Killing the pensions of the only people who do (old white middle class guys) is not a path to reelection.

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Landcrusher on May 07, 2009

Psar, "1971 was very different, economically speaking. The earning power and employability of the middle class has badly eroded since then." No. Not even close. First, you need to define middle class (and in your case country). Second, you need to avoid the average household earnings trap, it's a lie, the average household has fewer people, actual average AND median is up, way up. Median occasionally retreats in the short term, but never over a ten year period. The whole gap argument is a lie built on a deception. Then you need to say what you meant by employability. You may have a point there, but I don't know the facts, or what you mean.

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