With the strong loonie, declining auto production and cheap foreign-made parts working against them, auto parts makers in Canada, along with the governments of Ontario and Quebec, asked the federal government for CA$400M in assistance to stay afloat. The response from Federal Industry Minister Jim Prentice came in typical bureaucratese: "I'm certainly happy to sit down and discuss it, but I would point out that the items which the government can control and which ensure competitiveness in the auto sector are items we are working on." Okay, Finance Minister Jim Flaherty, what do you have to say on the subject? "Had they [the Ontario and Quebec premiers] been fully briefed, they would be familiar with the $1.3-billion reduction in the capital costs, the accelerated capital costs [for manufacturers], the benefit that we brought in … the March budget, months ago … so the federal government has done a great deal and I'm looking forward to the provinces emulating the federal government." Uh… right. So will they get the assistance or not? We make that a definite maybe.
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Is it me or does that guy look like an Ump Lumpa. From the original movie not the horrid remake.
Oh bummer for the parts suppliers, wishy washy politicians rarely give any real help just empty promises.
Reduced federal corporate taxes are of minimum value to unprofitable companies. Hypocritically, Ontario is seeking additional federal corporate handouts while continuing to levy punishing sales taxes on them.
Regardless, the domestic auto industry’s wounds are wholly self-inflicted. They can’t expect to make lousy products and mistreat customers for decades and have the taxpayers bail them out.
Regardless, the domestic auto industry’s wounds are wholly self-inflicted. They can’t expect to make lousy products and mistreat customers for decades and have the taxpayers bail them out.
That statement works on either side of 49°N.
–chuck
http://chuck.goolsbee.org
In reply to Gardiner Westbound The domestic auto industry’s wounds are wholly self-inflicted. They can’t expect to make lousy products and mistreat customers for decades and have the taxpayers bail them out. It is the Parts makers that are looking for help, not the Car Companies. The parts makers make the parts they are told to make with the materials and specs that are on drawings from the Big 3. As a Quality Manager from a supplier, I can assure you that very heated battles go on between the supplier and the car company. What ever you design, so that the part will be robust with a bit of margin for error, the bean counters from the customer will be back demanding shaving on every corner. I have watched engineers for suppliers just refuse to cut the corners demanded and of course they are quickly replaced by someone who needs their job more or works from an edited materials handbook. Also many of the parts that are going into your car today, like screws, bolts, electric motors and unseen plastic parts were negotiated with a 65 cent dollar years ago, along with automatic built in price reductions over the length of the contract. In my employers case it would have been much cheaper just to put a loonie in every box we sahipped instead of a motor. The rising dollar has made the problems for suppliers more intense but the problem has been going on for years. In my companies case I started there 12 years ago, along with 2500 other people at a 20 year old operation. Over the years to reduce costs we have shipped off the equipment and 2200 jobs to Mexico to try and remain competitive. After getting down to 250 peole at our location the owners are just tired of putting good money after bad and this plant along with 3 others of theirs in other Ontario locations are closing. It comes on slowly, in a clipping here and a news report there, but over the last 6 years my company alone no longer will employ about 10,000 people who made in wages about what the big 3 have just gotten their employees down to. Oh and if you think the parts are to expensive here, a radiator fan cooling motor that my company sells to Chrysler for $8.40 was just purchased by my father in Florida for his minivan for $240.00 with another $200 for instalation. If you can make that kind of a markup and still loses millions you really have to wonder where the money goes.
daro31 Does this happen with all the car companies you work with or just the Big 3?
It’s sickening to see this going on while the guys at the top get paid millions to flush the company down the toilet.
It amazes me how the general discussion is about when the Chinese built vehicles will arrive in NA.
What we should be discussing is what has happened iin most other sectors, Chinese parts.
We’re going to have to say a sad bye bye to the NA parts manufacturers in the near future.
What are they going to do? Start charging special Canadian pricing just to spite us?
The saddest thing about the China parts making it into the parts warehouses, is that the parts will still be outraguosly priced to the end user. Regaurdless of how inexpensive they are purchased for. When will we discover the kinder genteler Capitolist?