Canadian Auto Workers Union Calls For "National Auto Policy" With Free-Trade Barriers, Government Intervention

Derek Kreindler
by Derek Kreindler
canadian auto workers union calls for national auto policy with free trade

“Community” is a nebulous buzzword here in liberal Canuckistan, with the term moving from a synonym for neighborhood, to describing everything from ethnic groups targeted by vote-hungry political parties, to an exercise in social engineering by Ivory Tower types, eager to ram pseudo-progressive initiatives through various legislative and judicial avenues. No wonder the CAW’s new “National Auto Policy”, full of old-school labor/social democrat policies, is being branded with the slogan “It’s About The Community”. Huh?

Among the “community” focused suggestions made by the CAW are

  1. -Devaluing the Canadian dollar
  2. -Government equity stakes in OEMs (ala Volkswagen and German’s Lower Saxony, which holds a 20 percent stake)
  3. -Creating a Canadian OEM for vehicles (one suggestion would be to enter into a Chinese style joint venture agreement)
  4. -Building “green cars” here, along with incentives like a Cash For Clunkers program so motorists trade their used cars in for said vehicles
  5. -Suspending free trade talks with South Korea, Japan, the EU and Thailand until “one way trade” imbalances are addressed. The usual canard of Japan being a “closed market” is brought up just for good measure.

An abridged copy is available here, while the full report, if you can stomach it, is here. Some of the suggestions, like hiring more apprentices for skilled trades, aren’t so bad (Canada has a massive shortage of skilled trades workers and a generation of young people that aren’t prejudiced against taking up a trade as a career). It’s true that our living costs are higher (to the order of nearly 25 percent) and Made in Canada cars are inexplicably more expensive than they are in the United States.

Much of the report seems to concern the standard tropes of the CAW. Government intervention is the only savior, hostile to the free market and free trade and the greedy automakers. The Globe and Mail, Canada’s paper of record, dubbed the CAW’s ideas as “retrograde” and noted that the NDP, once a social democratic party beloved by unions and granola types, is moving towards the center and leaving these sorts of policies behind. The new face of NDP won’t jibe with protectionist, anti-corporate, anti-market philosophies that are anathema to most Canadians, save for the UAW and some fringe elements, despite our country’s reputation as uber-leftists.

We’ll be paying attention to the CAW’s machinations, but don’t be surprised if this gets next to no traction, given the political factors, and the big question on everyone’s mind; when is the Canadian housing bubble going to burst?

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  • RRocket RRocket on Apr 19, 2012

    Excellent commentary from our local newspaper..same city where the CAW is headquartered. The CAW has a really hard road ahead if it thinks it can rope the Canadian public into helping them bargain a better contract with the Detroit automakers. That's what the union set out to do this week when its leaders kicked off an eight city economic road show in Windsor after first giving the media a preview of the act up in Toronto. After sitting through nearly three hours of their eye-glazing self regard at the Caboto Club Tuesday night, I thought: man, Chrysler boss Sergio Marchionne must be one heckuva scary negotiator if the union thinks it needs 34 million of us sitting at the bargaining table with them to even things up. That's what the road show is really about. The CAW is out to convince Canadians that auto jobs are so important to everybody else's livelihoods that we had all better make darn sure they get what they want or the rest of us are all in deep trouble. During an hour-long presentation by CAW in-house economist Jim Stanford, the 1,000 of us filling a big room at the Caboto were treated to a long series of graphs, images and tables showing how hugely important the automotive biz is to Canadian prosperity. Which is very true, although the statistics used are heavily torqued. For instance, they used to say that every automotive job spun off at least three other jobs making parts. Then they decided it was seven jobs. Now it's up to 10, including the guy who mops the floors at the Hyundai dealership. Only minutes later, Stanford started talking out of the other side of his economist's mouth by trotting out the hoary old claim that labour makes up only four per cent of the price of a vehicle. How, with all those jobs? Four per cent of a car's final retail price may be equated to final assembly. But final assembly does not account for most of the labour that goes into building a car. If you count all the labour of all the engineers, parts makers and other inputs labour is about 60 per cent of the cost (not price, which is different), independent experts say. People other than the CAW are involved, you know. That's just one example of the kind of sophistry the CAW is indulging in as it tries to build a case that the rest of Canadian society somehow owes them a better living than the one they have now. The piteous way they were carrying on Tuesday, you'd think autoworkers toiling for the former Big Three were all working for free in snowdrifts without shoes - not enjoying a well-compensated life after winning the "auto lotto," as the more honest men and women on the line call it. They deserve being paid as much as they can win at the table, but please, can't they cut the crying and moaning after all taxpayers have done for them, bailing out their bankrupt butts for tens of billions of dollars? Yes, they did have the grace to thank us. But that's over and now it seems the union brain trust (not the rank and file) wants their pre-bankruptcy reality restored at a cost to the rest of us. What is that cost? Oh, not much. We just have to drive the value of the Canadian dollar back down to 81 cents U.S. for them, put a stop to free trade, ban imports they don't like, and semi-nationalize the automakers who employ CAW members by buying shares and subsidizing all future investments. They also want the hundreds of thousands of Canadians who toil in the oil and resources industries to cut that out, because it's ruining their export markets. So could they kindly do something else, please? No mention of how governments would replace the $1 billion a week in resource taxes they collect. They might also want us to pay to create a car company for them so they can run it the way they want. That last one is funny - almost worth the price of doing it. But back to the first "ask": They want to trash the loonie. That means a 20 per cent reduction in everybody's wealth. The CAW is asking 34 million other Canadians to take a 20 per cent haircut on the value of their pensions, their RSPs and other investments, their homes, their lives. All so the CAW and its shrinking crew of 25,000 assemblers can go back to the good old days when three electricians did every job needing to be done by one, so one could call in sick and another could work full time promoting socialist fantasies like this one. And they want us to throw the oil industry - the best thing Canada has going for it right now - under the bus. Who knows what the bus will run on, but union president Ken Lewenza says we are "dangerously dependent" on resources (not manufacturing jobs, of course) and need to wean ourselves off them to pay more attention to them. They want an entire country to turn itself inside out so a tiny minority of people with enviable jobs can have it even better. These requests go beyond outrageous and unthinkable. They show contempt for other workers.

    • Neb Neb on Apr 20, 2012

      Nice article. The whole "we need a cheap dollar" thing is just nuts. Guess what? Lots of oil and energy exports means a strong dollar, period. I read the whole thing as the long, slow death of the economic plan our brilliant leaders cooked up in the early 1990s: that Canada was to become cheap labor for the Americans. You could have all sorts of manufacturing jobs in Canada if you were willing to admit that your dumb plan failed and things were going to have to change. Instead of being cheap, you'd have to focus more on being good. You'd have to invest lots more in RnD for starters, and capital upgrades, two places Canadian industry is extremely weak. (Actually, on RnD it's so weak the Cons implemented that stupid plan to have the taxpayer subsidize their RnD by corrupting the mandate of the national research institutions.) If you were the government you'd have to invest more in education, another place where Canada is really weak internationally. But no. Balance the budget, admit nothing, everything is fine. Keep that stone rolling down the hill, because downhill goes on forever.

  • Fishiftstick Fishiftstick on Apr 19, 2012

    Left-leaning Canuckistan, eh? Not so much, these days. The Glib and Stale (AKA Toronto's National Newspaper) has become a leftist rag, but it does not speak for the ruling Conservative government. That government has little interest in the CAW's advice, and even less interest in protectionism. So far it has signed free-trade agreements with 9 nations, and is negotiating with many more. But the Canadian dollar's rise is a huge problem, and it's a major factor in Ontario's decline. This affects all business, not just manufacturing. To put it in perspective: not so long ago, $1 in US sales was worth $1.50 Canadian. Now it's worth $1, sometimes less, and there's not a thing you can do about it. I mean, with the US economy in the toilet, it's not like you can raise prices.

  • Inside Looking Out You should care. With GM will die America. All signs are there. How about the Arsenal of Democracy? Toyota?
  • DenverMike What else did anyone think, when GM was losing tens of billions a year, year after year?
  • Bill Wade GM says they're killing Android Auto and Apple Carplay. Any company that makes decisions like that is doomed to die.
  • Jeff S I don't believe gm will die but that it will continue to shrink in product and market share and it will probably be acquired by a foreign manufacturer. I doubt gm lacks funds as it did in 2008 and that they have more than enough cash at hand but gm will not expand as it did in the past and the emphasis is more on profitability and cutting costs to the bone. Making gm a more attractive takeover target and cut costs at the expense of more desirable and reliable products. At the time of Farago's article I was in favor of the Government bailout more to save jobs and suppliers but today I would not be in favor of the bailout. My opinions on gm have changed since 2008 and 2009 and now I really don't care if gm survives or not.
  • Kwik_Shift I was a GM fan boy until it ended in 2013 when I traded in my Avalanche to go over to Nissan.