QOTD: Is Australia The Canary In The Coal Mine For Canada?
The latest round of bad news regarding the Australian domestic auto industry has shifted TTAC’s attention to Canada, another country burdened with some similar issues. If Australia’s own car industry is getting hammered, then how much longer does Canada have?
Australia’s car market was once far more protected, but the reduction of imported vehicle tariffs and cheap exported cars from countries like Japan and Thailand have made locally built cars an extremely expensive proposition. Unlike Canada, Australia’s vehicle exports are minimal, and the domestic car industry has been reduced to relying on local consumers and government handouts to help stay afloat. While Australia has rapidly switched from locally-made, thirsty V8 sedans to small, fuel-efficient compacts, Canada has always had a taste for gas-sippers. Hell, two of them (the Honda Civic and Toyota Corolla) are even built there.
But Canada now finds itself in a paradox; the country relies on exports, yet has a very strong currency. Once upon a time, Canada’s dollar was worth around 62 cents, which made it a much more attractive place to build cars. The loonie’s recent rise to parity has made it significantly more expensive to build cars in Canada, and it’s not just the auto makers who are recognizing this.
An Automotive News article quotes one Canadian Auto Workers union official who seems resigned to the fact that increasing costs mean dwindling prospects for Canada’s auto manufacturing industry.
“As those costs increase — 40, 60 percent — we simply can’t compete anymore,” said Ron Svajlenko, the president of Canadian Auto Workers Local 222, the union whose membership has dwindled to 3,500 from 12,000 in 2002. “When it comes to a decision about where you’re going to do things, you go to where the costs are low.”
The CAW was a very tough negotiating partner for the Big Three in the last round of contracts, managing to stave of a full implementation of a UAW-style two-tier wage system for new hires. But the CAW didn’t get all of the investment it was looking for either. While Ford got a commitment to upgrading the Oakville plant, upgrades for Chrysler’s Brampton plant (which builds the LX cars) never materialized and GM even shifted product out of Canadian factories, leaving the future of its Oshawa Assembly plant in doubt. Canada, and the province of Ontario still maintain some advantages; a publicly funded healthcare system and a generous regime of tax credits and low rates for corporate income tax can be compelling reasons for auto makers to continue to build cars in Canada.
But the currency issue will remain a thorn in the side of Canada and Australia, albeit for different reasons. Canada’s strong dollar makes it not only unprofitable to build cars there, but also gives the OEMs a good reason to pack up for low-cost Mexico or, even better, “bring jobs home”, as in the case of GM moving production of the Impala (at least in part) back to Detroit.
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- George Hughes What ever happened to the American can-do attitude. I know what, it was coopted by the fossil fuel industry in their effort to protect their racket.
- 28-Cars-Later "But Assemblyman Phil Ting, the San Franciscan Democrat who wrote the electric school bus legislation, says this is all about the health and wellbeing of Golden State residents. In addition to the normal air pollution stemming from exhaust gasses, he believes children are being exposed to additional carcinogens by just being on a diesel bus."Phil is into real estate, he doesn't know jack sh!t about science or medicine and if media were real it would politely remind him his opinions are not qualified... if it were real. Another question if media were real is why is a very experienced real estate advisor and former tax assessor writing legislation on school busses? If you read the rest of his bio after 2014, his expertise seems to be applied but he gets into more and more things he's not qualified to speak to or legislate on - this isn't to say he isn't capable of doing more but just two years ago Communism™ kept reminding me Dr. Fauxi knew more about medicine than I did and I should die or something. So Uncle Phil just gets a pass with his unqualified opinions?Ting began his career as a real estate financial adviser at Arthur Andersen and CBRE. He also previously served as the executive director of the Asian Law Caucus, as the president of the Bay Area Assessors Association, and on the board of Equality California. [url=https://en.wikipedia.org/wiki/Phil_Ting#cite_note-auto-1][/url][h3][/h3]In 2005, Ting was appointed San Francisco Assessor-Recorder in 2005 by Mayor Gavin Newsom, becoming San Francisco’s highest-ranking Chinese-American official at the time. He was then elected to the post in November 2005, garnering 58 percent of the vote.Ting was re-elected Assessor-Recorder in 2006 and 2010During his first term in the Assembly, Ting authored a law that helped set into motion the transformation of Piers 30-32 into what would become Chase Center the home of the Golden State Warriorshttps://en.wikipedia.org/wiki/Phil_Ting
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