ReportonBusiness.com reports that Canada’s automakers are united against a new trade agreement with South Korean– unless the Asian country removes its “non tariff” barriers to Canadian auto exports. The news comes ahead of Canadian free-trade officials’ eleventh meeting with their South Korean counterparts. It also arrives against a backdrop of a radical shift in Canada’s balance of payments. According to a Canadian Auto Workers (CAW) paper on the subject, our neighbors to the North are now importing more cars than they’re exporting. CAW economist Jim Stanford sounds the alarm: “What was once a unique success story regarding Canada's high-value participation in world markets has turned remarkably quickly into an industrial nightmare.” While the CAW report also claims The Big 2.8’s restructuring efforts have “wiped out thousands of jobs,” (hey why not mention it?), the main focus is on getting tough with Korea: “This is the wrong time for our own government to expose this still-crucial export industry to even more damage from low-cost, one-sided imports.” So when would be a good time?
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It’s interesting to note that Hyundai HAD a Sonata assembly plant in Bromont, Quebec which built cars for Canada and export to the US from 1990 through 1994. Their company history states that the plant was shuttered due to “low sales” but I’ve heard, on the rumor wagon, that the Quebecois just didn’t like that four letter word, W O R K
Perhaps Hyundai and Kia should do what Volvo did for decades, and mollify the complaints of the Canadians by putting up assembly plants at ports, such as Vancouver, BC or Sydney, NS. Shipping cars from South Korea for assembly and using heavy items such as batteries, glass, etc. from Canada/US/Mexico… shipping pressings “nested” means you are shipping a lot less “empty space” and air (as happens when fully built up cars are shipped from overseas).
Of course, for Alabama built Sonata cars, at least V6 cars with engines from Alabama, I’d suppose they’re covered by the NAFTA and the Canadian government can’t whine about those being imported into Canada duty free…. Plus for the Canadian export Sonata cars, Hyundai “could” buy 2.4 liter four cylinder engines from the (1/3 Hyundai owned) Dundee, Michigan plant which builds the Hyundai designed engines for Chrysler (until Hyundai’s own planned US four cylinder engine plant is up and running).
Canada is witnessing the down-side of the fact that the loony is now roughly on-par with the US dollar.
The other thing Hyundai could do is to export cars from their super low cost plants in India – so if Canada slaps tariffs on, the price would be about the same for Canadian buyers.
By the way, WHAT “Canadian car manufacturers”?!
Gray-Dort? Went out of business in 1925. Relied upon Dort engines out of Lansing, anyway.
McLaughlin-Buick? That’s entirely American owned, now called General Motors of Canada.
Studebaker? Solely Canadian for 18 months, gone in 1966.
The CAW extorted every cent possible from automakers during the good times, deeming it their fair share. Now that the Canadian dollar is trading higher than the greenback and VEBA has negated taxpayer supplied health care the union is unwilling to share in the tough times. CAW union boss Buzz Hargrove is gonna party like it’s 1999!
Interesting that Quebecois worked in Ste.Therese for several decades assembling cars, and across the Autoroute they are still assembling KW and Petes.
Hyundai was using an old IBM facility in Bromont to assemble cars, and probably when the government subsidies ran out, and sales started going down. They shut the plant down.
CAW economists surely saw the trend of increasing value of the Canadian dollar, and now the VEBA for health care is not helping.
Article on what GM Canada is doing
http://www.reportonbusiness.com/servlet/story/RTGAM.20071008.wagendaelias1008/BNStory/robAgenda/home
“Canada’s automakers are united against a new trade agreement with South Korean– unless the Asian country removes its “non tariff” barriers to Canadian auto exports.”
Hmm.last time I looked there no truly Canadian automakers – not since the Bricklin anyway.
So, AGR, do you think that Hyundai still own the Bromont (ex-IBM) facility, so they could start sending “kits” for assembly and stop the criticism of the CAW? Or doesn’t the CAW hold enough sway in Ottawa to cause Hyundai and Kia a problem? (Kia are 50% owned by Hyundai).
Ummm, isn’t Chrysler a Canadian automaker now?