Editorial: Some tough realities

Community hardship funds shouldn’t be used to prop up companies whose workers won’t make concessions.

The last time auto-sector labour talks were looming, we stated, “CAW workers can play the strike card to win another wage and benefits battle with employers. But if they pick that fight as North American manufacturers are waging marketplace war with non-union competition, they should expect to lose thousands of jobs someday very soon.”

Since then, Ottawa and Queen’s Park have thrown hundreds of millions at a so-called crisis—despite the fact that Canada still has more than its fair share of global auto manufacturing. The industry wants more. The Ontario Liberal government is onside, while federal Conservatives are wavering. “We’re not into direct subsidies,” Industry Minister Jim Prentice insisted in late January. He then pointed out the Harper government’s $1-billion community hardship fund will have manufacturing applications that could include funding for the Ford engine plant in Windsor, Ont., that Finance Minister Jim Flaherty recently turned down for a direct subsidy.

This is wrong. The industry now faces a U.S. economic downturn, the appreciation of the Canadian dollar and stiff competition from foreign automakers. There is also competition from the United Auto Workers. They agreed last year to a GM contract with no increases plus a new two-tier wage structure (for non-vehicle production workers) and the removal of US$51 billion in health-care obligations from GM’s books (the union will manage a new health-care trust funded by a GM cash infusion). That deal—used as the pattern contract for America’s auto workers—made Canada the highest-cost location within GM for vehicle assembly.

That’s why CAW chief Buzz Hargrove wants politicians to do more to keep the Big Three investing in Canada. What the CAW does not want to do is help itself by making concessions when negotiations start later this year. Instead, it will once again pick the strongest of the Detroit trio as the target, leaving the others to match the first deal or face a strike.

It is time to stop asking the rest of us to support companies that can’t secure the support of the people they employ and pay well.