Members of the Canadian Auto Workers union (CAW) may be caught between the proverbial rock and hard place when their contract comes up for renewal next year. On one hand, tough-talking union prez Buzz Hargrove says "we're not going down [the] road" of UAW-style concessions." He's also assured his 37.5k CAW members that a two-tier wage system and concessions are "non-starters." On the other hand, if the CAW hangs tough, they could create a significant Canada – US "wage gap." Analyst Dennis DesRosiers says if the status remains quo, there'll be a $25 dollar per hour differential. The Big 2.8 would then be tempted to send production back south or to overseas locations. With the pressures of the much larger UAW agreeing to a two-tier wage system and the threat of lost jobs, Buzz may have to tone down his rhetoric and behave in a diplomatic manner– as unaccustomed to that 'tude as he may be.
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Buzz is going to kill the CAW run shops. He is out of touch with what is actually going on in the industry and just wants more and more money for the people he represents. I guess that is a good thing for the members, until the big 2.45 firgure that it is cheaper to make parts anywhere else in the world BUT Canada, especially with our dollar being higher than the US’s now. he doesn’t really have any cards to play. I have never liked/understood that man
Perhaps the CAW has a death wish. GM no longer have an engine plant in Canada, so it’s just a “rump-plant” country for them. (Witness the fact that the when Tonawanda NY engine plant went south during the short strike, Canadian car and truck production ceased).
Even little GM Holden in Australia has an engine plant. It cranks out 2.0 litre fours for GMDaewoo of South Korea, for sale worldwide as Chevrolets (and in the US, as Suzukis).
Holden makes a version of the “high-content” 3.6l V-6 in Australia, too, right? The one that’s fitted to the base G8?
I am almost always in the Union’s corner, but on this one, Mr. Hargrove had better take a cue from his U.S. counterparts. On some cash exchanges today, the Loonie is worth MORE than the U.S. greenback. Historically, the favorable exchange- as much as 50%- has allowed the Big 3 to use Canada has a low-cost base of manufacturing and natural resource acquisition. Now the tail wags the dog, and no dog likes that. I hope cool intelligent heads prevail. They have to, or we’ll be witnessing a wholesale change in the industry dynamic. Hell, and just as I was planning to start importing U.S. used cars to Canada.
Hencho en Mexico. Under NAFTA there is no advantage for a company to build products in Canada instead of in Mexico. It is hard to imagine any of the unionized auto company investing further in Canada.
Also, GM’s detailed US investment roadmap agreed to with the UAW puts their Canadian operations in the position of not having any comparable commitments.
The increased value of the loonie ($CDN) also works against the Canadian production of cars and trucks.
I’m the “unoffocial auto historian” around here. Most people don’t realize that in 1965, the United States and Canada signed an Auto Pact eliminating tariffs on autos and auto parts moving across the border, in both directions.
Prior to this Auto Pact, a US car sold in Canada had a Canadian tariff brought against it when it was imported from a foreign country (the United States) into Canada, and likewise, the US placed a tariff against Canadian cars imported into the United States.
Studebaker had to pay US tariffs on imported Canadian built cars (out of their Hamilton “rump-plant” in Ontario) when they permanently closed down South Bend Main over Christmas 1963, but only for about a year.
The Auto Pact did soon kill “unique” Canadian variations, always fascinating to “car guys & gals” – such as the fact that from 1955 on, Canadian Pontiacs had “GM-McKinnon” (read: Chevrolet) engines, including six cylinder engines. Only “imported from the states” Pontiacs had Pontiac V8’s.
Ford used to sell Meteor (brand) and Monarch (brand) cars – Meteor cars were Fords with different grills, tail lights and trim sold through Mercury dealers, Monarchs were Mercury cars with different grills, tail lights and trim sold through Ford dealers. (Kind of like Vauxhall in the UK – all “badged/regrilled” Opels nowadays). Just a sop to nationalistic pride, yes, but still interesting to us cars guys/gals.
Other weird things happened in Canada; for example, Volvo built cars in Nova Scotia for several decades, until Ford bought the company and closed down the facility. This Volvo factory predated the Auto Pact, and was used to reduce tariffs on built-up cars coming into Canada.
Another weird little known fact was the fact that Studebaker was “contracted” to import Volkswagen cars into Canada in the mid 1960’s at a reduced tariff, since under the Auto Pact, most Studebakers were exported (to the United States), and there were some sorts of “credits” which could be used up by importing cars – then Studie sold these cars to Volkswagen of Canada for public sale. This reduced the cost/increased the profits for VW Canada, provided a neat income for Studebaker and the only people who suffered were the Canadian taxpayers, who obviously had to make up the difference in the national coffers. Once this little scheme came out into the open, the Canadian Parliament had to close the loop-hole.
Also little known, is the fact that the Auto Pact, which obviously pre-dates NAFTA, may be cancelled by either nation with a years notice.
Since the “Canadian auto manufacturers” (i.e. the “Windsor 2.8”) export the vast majority of their cars, if the CAW don’t want to play ball – the Detroit 2.8 could push Congress into rescinding the Auto Pact!
Ontario specifically would then fall into a recession for awhile, car prices would obviously go up in Canada (at a time when they should be coming down due to currency fluctuations) and the CAW would be 1/5th of their current size – if they survived at all.
All in all, perhaps the CAW leadership needs to remove their aluminum foil “tin hats” and sit down in good faith to negotiate next year…
“the Detroit 2.8 could push Congress into rescinding the Auto Pact!”
“The Auto Pact was abolished in 2001 after a World Trade Organization ruling declared it illegal, though by that time the North American Free Trade Agreement (NAFTA) and other agreements had made it largely irrelevant.”
Oh yes, just to put even more pressure on Canada, the United States signed a two-way Auto Pact like tariff elimination deal with South Korea recently, which will phase-in over a decade (to include trucks later, as well as cars).
One “has to wonder” about such deals – since the largest “beneficiary” US company for a South Korean deal would be guess who?
General Motors. (Which bought controlling interest in Daewoo for pennies on the dollar, via it’s Holden subsidiary in Australia).
I’d have to guess that if GM survive the next five years, GMDaewoo products being sold as Chevrolets will increase from one model (the low priced, small Aveo) to at least six.
Perhaps looking at Canada, where you can buy a new (GMDaewoo) Chevrolet Optra (ex-Daewoo Nubira) and until recently could buy a new (GMDaewoo) Epica (until recently sold in the states as a Suzuki), you’ll see a glimpse of GM-USA’s future small car offerings.
GM could easily import / rebadge the Rezzo, Tosca, Winstorm and Matiz as well as the Optra.
The little Matiz (sold in Mexico right now) could compete against SMART, the Rezzo against Scion and the Kia Rhondo, Winstorm would be a competitive small SUV at a low price and Tosca – could replace the Cobalt POS.
See for yourselves.
http://www.globalautoindex.com/maker.plt?no=2295&g=Daewoo%20(GM)
glenn126, Studebaker in the early 60’s was also distributing M-B cars in Canada. In the late 90’s Jaguars and M-B cars were coming into Canada duty free on the premise that Ford and Chrysler were part of the Auto Pact. Competing Japanese manufacturers immediately wanted to become part of the Auto Pact, with Jaguar and M-B paying duty again to quell the Japanese uprising.
There was Ford=Meteor – Mercury=Monarch – ChevyII=Acadian – Chevelle=Beaumont – Chevrolet=Canadian Pontiac (Strato Chief – Laurentian – Parisienne) Ford Falcon=Mercury Frontenac – Chevrolet Cobalt=PontiacWave – Buick Lacrosse=Buick Allure.
Ontario would be dramatically impacted, the automotive industry is an intrinsic part of Ontario.
There are a myriad of “duty deals” done in the background, companies exchange duty credits.
Well troonbop, thanks for the update on the Auto Pact, I didn’t know it’d been superceded and “outlawed” by some foreigners, usurping US sovereignty (how DARE we make a pact with our neighboring country without THEIR permission!?)
But then, if we are going to actually go ahead and pay attention to laws, we should start with reading the United States Constitution, in which we’d find that the current US dollar is illegal, the “Federal Banking system” (being privately owned) is illegal, and virtually most of what the United States Government does, for all I know down to including signing NAFTA and joining WTO, are illegal too.
But hey, we’re a nation of people who can’t even be bothered to obey rules of the road, and we don’t hold our politicians accountable even though they swear to uphold the Constitution every time they are “sworn into office”, so what’s the point in even having laws or some old parchment aka the Constitution of the United States?
For one nice example. The Constitution of the United States indicates very clearly that the Dollar IS the equivalent of an ounce of silver OR the gold equivalent; it also indicates that such COIN (money) is the only means of cross-border (i.e. between the states) monetary transaction AND it specifies that ONLY the United States Congress may coin (produce) money for use within these United States. The Constitution does NOT stutter nor have any of these provisions been replaced by amendments to the Constitution!
There have never been any provision in the Constitution to “farm this duty out away from Congress” – never mind allow for a private bank to print non-backed, “promises-promises” fiat money (i.e. “The Fed”). Ergo, the dollars in your wallet and mine, are counterfeit.
The “value” of a $10 bill is only in your head, and the head of the person you trade with for goods or services. And that value is dropping – has dropped 10% or more in a matter of months – against all the other world currencies, gold, silver, copper, you name it. The “Fed” is lying to us left right and center, otherwise why stop publishing the M3?
Face it – we all know, deep down, that real inflation is well beyond the lies we’re being fed by our “esteemed Government”. M3 alone has probably gone up 14% in the last year, yet “official inflation” is about 4% (“not counting energy and food”). Well, gee, I don’t know about you, but MY budget has substantial amounts allocated to – ENERGY and FOOD.
But what’s the difference since everyone’s in on “the big lies” anyway?
Of course, most other world currencies are “big lies” too. The Euro is only about 2% backed by Gold, if I recall the figure correctly.
This is part of the reason why, ultimately, European goods are going to soon cost a lot more in the United States, along with goods from virtually every other nation as well.
The US dollar is collapsing, the United States government is literally insolvent (i.e. BANKRUPT).
Its about time that Canada should build there own vehicles, with the Money that current Premier gave to GM to produce Green Cars in Ontario, in the mean time we still Have Honda with a Engine plant as well and Toyota and Lexus in two plants in Ontario, Cambridge and Woodstock Ontario, I also know that the CAW has branched out to other Service industries like Hospital and Casinos
daiwoo makes god awful cars, consistantly at the bottom of every satisfaction and quality survey, in KOREA.
AGR: Don’t forget the Pontiac Tempest/Chevy Corsica. A friend’s dad owned a Tempest, what a POS it was!
To anyone who thinks a $10 bill’s value is just in their head: please immediately send those worthless pieces of paper to me. Or write a check for the balance in your checking account (that money is mostly just bookkeeping entries, as one would learn if all depositors demand cash in full at the same time).
Regarding paper money, a court held “The contention that paper money is illegal has been consistently rejected. … Congress has exercised this power by delegation to the federal reserve system. 12 U.S.C. section 411. Federal reserve notes are legal tender for all debts, including taxes. 31 U.S.C. section 392 [now 31 U.S.C. § 5103]; Milam v. U.S. 524 F.2d 629 (9th Cir. 1974). The United States Constitution, art. 1, section 10, ‘prohibits the states from declaring legal tender anything other than gold or silver, but does not limit Congress’ power to declare what shall be legal tender for all debts.’ U.S. v. Rifen, 577 F.2d 1111, 1112 (8th Cir. 1978). Since Congress has done so, there can be no valid challenge to the legality of federal reserve notes. United States v. Anderson, 584 F.2d 369, 374 (10th Cir. 1978).” [See Wikipedia, “Tax Protestor Conspiracy Arguments]
Is the US government insolvent? Certainly there are stupendous future obligations for social security, medicare, etc. But a sovereign nation’s finances are not like those of an individual or corporation. Back when I was teaching Government Budgeting (yes, I realize that’s sort of an oxymoron) I would amuse my students by discussing some attempts to compile a balance sheet for the federal gummint as if it were a private entity. It’s a fool’s errand. Businesses record assets at cost; what amount should the US show for the lands acquired in the Louisiana Purchase? What value should be given to gold holdings, inasmuch as Congress is free to declare any exchange rate it likes? What is the liability for Medicare, since Congress can change benefit entitlements? How much to show for future tax receipts, since Congress has the power to define how much they will be? How should it depreciate the Washington Monument? Tricky questions, indeed.
Bluecon, along with the rumoured plant in Woodstock for Toyota, there is a rumoured engine plant for Honda in Alliston…unless that is an old rumour that has been quashed.
All interesting stuff, 50Merc, but when the gummint refuses to provide the owners (us) with a good balance sheet of business – or for that matter, a reckoning of how much gold is in Ft Knox (and haven’t done so since the Eisenhower administration), then it’s pretty easy to point out the obvious – if income is A and outgo is B+A, then balance sheets eventually have to show negative figures…..
As for the legalese – well, the powers that be can “decide” what they “think” is legal and make it so by fiat – kind of like the paper money – but when that does not fly with the clear and obvious intent of the founders, who’s right and who’s wrong then?
Ultimately, just like the automotive marketplace (Detroit 2.8 vs Toyonda vs Eurocrap), the marketplace of money is dropping the US dollar at this time, faster than the GM market share dropped over the last decade…..
The rest of the world aren’t ALL imbiciles, any more than GM aficianados can call all Toyota buyers idiots….
Hey 50merc,would you be intested in writing to the I.R.S. regarding my yearly earnings and possible earnings.That gold hoop in my ear has to have some sort of benefit, right?Anyway..I agree.
How could I possibly forget the Corsica? Such a memorable car, this is when the General was doing interiors with recycled grey carpets…all the same color of grey that ended out smelling the same after a while.
Re 50merc…
Is the US government insolvent? Certainly there are stupendous future obligations for social security, medicare, etc. But a sovereign nation’s finances are not like those of an individual or corporation.
Yup. The power of the sovereign to steal citizens’ savings via inflation and tax citizens’ wealth is unmatched in private sector world.
Glenn 126 You may will be the resident historian,but I need to set the record straight. The Pontiac all models are my passion.First off before the auto pact the Canadian full size Pontiac was an American Pontiac with a Chevy power train and frame.We never imported or sold an American Pontiac in Canada V8 or otherwise untill about the mid 80s.
I worked on the Chev line for 17 yrs building Chevs American and Canadian.The Chev other than a few emision gadgets,basicaly the same car.The Pontiac was two different cars.The U.S Pontiac was more like an Olds,and the Canadian was still a Chev.For 10 yrs or so we run them down the same line. 305 small blocks 301 pontiacs, 400 pontiacs 3.8 chevs and 3.8 buicks all went into the full size Pontiac.We ran 350s and we even put a stove bolt 6 in some of the exports.And just to make interesting in the early 80s we had the much maligned [rightfully so]diesels
It was an adapted 350 rocket gas olds engine, with lag bolts sort of holding the heads on.This was not one of GMs finest moments.Nuff said!
As a production group leader at that time, to this day I have nightmares of trying to figure out the plumbing and hose routing of the different engines and configurations.
The auto pact was a fairly simple agreement.For every vehicle GM sold in Canada ,GM could ship one to the US.
It was,for its time a perfect a set up.In Canada we enjoyed years and years of prosperity,while building cars for the US market I’m sincere when I say God bless America!
Since that time the world has changed NAFTA, come along the Canadian Pontiac is dead Toyota leads the pack with blandmobiles. The once mighty UAW has gagged down concessions I believe market share is somewhere around 23%.The loonie is at par.
Up till now Canada has been almost immune to the devastation and the downturn in the domestic auto industry I fear that our days of bliss are behind us.
Now old Buzz,while I don’t allways agree with him.his heart is in the right place.
Ontario needs the domestic car industry for its very survival
and Buzz knows this.Ontario folks that want to jump all over Buzz and his every comment[and with all due respect to our US friends] just take a drive down to Michigan.Have a good look around cause if something don’t change real quick we aint too far behind.
The Auto Pack used to work: 1 built in Canada for 1 built in US, the reconcilition was usually done in July or August and manufacturers would conveniently stall trainloads of vehicles to balance the books, and start over again for a new year.
When the US had Pontiac Catalinas – Ventura – Bonneville with the Pontiac specific 389, Canada had the same bodies on a Chevrolet frame, assembled in Ste.Therese many years ago.
Canadian Pontiacs always looked a little dorky, from 1959 onward the US cars were Wide Track, and the Canadian Strato Chief – Laurentian – Parisienne was a Chev – narrow track.
This goes back to when GM had brand specific engines in each car line, Pontiacs had Pontiac engines, Chevrolet had Chevrolet engines, and so on….later GM resorted to “corporate engines” which meant that they could shove any motor in any car.
By the mid senventies there was a Canadian Pontiac, and Pontiac Grand Ville which was an American car.
In 1972 the Canadian Lemans was a Chevelle, with the exception of the GTO, if one ordered a Lemans with the GTO “endura bumper”, the car was assembled in the US with an American Pontiac 350, not a Chev small block.
You could always get American Pontiacs in Canada, it usually helped to know the right dealer with the right contacts to source an American Pontiac, like an off beat Catalina Station Wagon with a 421 and a 4 speed.
“The Constitution of the United States indicates very clearly that the Dollar IS the equivalent of an ounce of silver OR the gold equivalent; it also indicates that such COIN (money) is the only means of cross-border (i.e. between the states) monetary transaction AND it specifies that ONLY the United States Congress may coin (produce) money for use within these United States.”
Section 8 of the constitution says that the federal government is empowered to (amongst other things): ” … coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;” Section 10 of the constitution lays out certain restrictions against the individual states as these matters are for the federal government. This includes: “No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”
Other than that, the constitution has little to say about money be it paper, coin, gold, silver or tradeable securities. There is no fixed ratio of dollars to silver mentioned anywhere. There is no restriction on the means of settlement of cross-border transactions.
Congress is empowered to pass laws providing for the regulation of the value of money, but is not restricted in how it accomplishes that task.
I’m a big believer in the notion that in many ways the federal government runs amok, but glenn126 is asserting as fact things which cannot be found in the document in question. You can have a look at the text of the US Constitution here:
http://www.archives.gov/national-archives-experience/charters/constitution_transcript.html
don’t forget to point out that with the weakened dollar, Canadian labor isn’t as attractive as it once was.