Time steps up to the e-plate with some timely cross-border bailout comparative analysis. “Canada is paying a significant premium over the U.S. to save Chrysler jobs at home, with no guarantees that the billions it is laying at the automaker’s door will ever be repaid or do anything to help maintain the country’s 20% production share of the North-American auto industry.” Drum roll . . . “Ottawa and the Ontario government are contributing a total of $3.2 billion in loans to keep Chrysler Canada alive, including $850 billion extended to the ailing automaker at the beginning of the year.” No, no, it’s a misprint. But even so, “the Canadian rescue package works out to more than $340,420 for every employee at Chrysler Canada, which has 9,400 hourly and salaried workers on payroll. That’s 15% more than the $295,000 per employee that Washington is shelling out to save about 40,000 Chrysler jobs in the U.S.” Why do I get the feeling that these numbers are lowball estimates? Because they are?
Oh, this is just the tip of the iceberg.
The Premier of Ontario also announced this week that “Free markets aren’t dead, they just have a new partner and that’s the government.”
http://www.torontosun.com/news/canada/2009/05/05/9356066.html
I shudder to think of what socialism would look like.
Does anyone in government on either side of the border ever do any kind of cost/benefit or net present value analysis on these bloody handouts?
Corporate Welfare Bums.
Does anyone in government on either side of the border ever do any kind of cost/benefit or net present value analysis on these bloody handouts?
Yes. They analyze how much taxpayers’ money they can piss away without triggering a revolt, then divide it by the number of votes it will buy them in the next election. Anything under $100,000 per vote is considered a bargain.
Is the economic concept of Opportunity Cost not taught in NA anymore?
Where are the “C7 NOW” T-Shirts?
Do these #s account for the exchange rate? Last I checked it was a 15% delta.. So if they don’t, the US and CD are running neck and neck per job.
Wait a minute! The free market types should say no to the bail out due to principles. The Big Government types should say no based on inability to trust corporations and their evil leaders.
We need a good conspiracy theory. After all, we are paying lots of money, we ought to at least be entertained.
We need a good conspiracy theory.
Is there a Canuck equivalent of Michelle Bachmann?
Kurt B, I’d definitely buy and wear a C7 NOW t-shirt…perhaps also including a pentastar…
Meh.. what’s a few billion between friends, eh?
Anyway, our Feds (in Ottawa) have been supporing Bombardier and other corporate welfare cases for years, so I guess it’s time the auto industry got a swipe at the taxpayers’ trough.
@PeteMoran:
Is there a Canuck equivalent of Michelle Bachmann?
Well, we have Randy Bachman, would he suit?
The Canadian education system is the envy of the world. It’s cruel but it is fair.
Unlike America, a Canadian pre-schooler has to pass an intelligence test in order to prove their fitness to learn. The counselor will usually ask but a single question to determine admission:
“Little Timmy—do you know the name of the Nations’ Capitol?” If Little Timmy has his act together, he will sigh and say: “It’s mostly Chinese, since everyone is dumping American Dollars these days…”
If he bolos the question, the counselor will ask his parents to fill out a UAW application for their son/daughter and wish the parents better luck next year!!!
So they all could be salaried for the time of any College or University program?
I like the CH7 now T shirt idea.Get a T shirt guy to print some off.The Chrysler or GM logo,buyers choice.
Hey then get a list of Chrysler and GM one industry towns.You know the places with the closed stores, bars and lumber yards.Put your ch 7 T shirts on and take a stroll through the streets.
Now thats entertainment!
No mikey, that’s f***ing suicide.
mikey :
May 7th, 2009 at 5:42 am
I like the CH7 now T shirt idea.Get a T shirt guy to print some off.The Chrysler or GM logo,buyers choice.
Hey then get a list of Chrysler and GM one industry towns.You know the places with the closed stores, bars and lumber yards.Put your ch 7 T shirts on and take a stroll through the streets.
Now thats entertainment!
Other “company” towns in the past have survived when that company closed down. Why do people assume that these things can’t work out? But then that means that people have to get off of their ass and work on fixing things.
Is the economic concept of Opportunity Cost not taught in NA anymore?
No, and neither is the concept of Sunk Cost apparently.
South Bend (not “Studebaker Indiana”) closed up 99% of it’s US operations just before Christmas 1963.
By 1971, South Bend had completely recovered.
I have a suspicion that the Governments are dumping money into Chrysler in order to avoid Chrysler going T.U. If Chrysler goes down then the government will have to justify to a screaming ranting labor movement why they wont bail out their pensions. There have already been a number of demonstration by the CAW and CAW retirees demanding that they government gold plate their pension entitlements. I suspect the Governments have woken up to the concept that to give the pension guarantees the CAW is demanding would be political suicide. Life s much simpler when you can throw gobs of money away when you say your savings jobs.
We need a good conspiracy theory. After all, we are paying lots of money, we ought to at least be entertained.
Bastardization, but: Never attribute to an evil conspiracy what can be adequately explained through active cowardice.
Yeah, menno and moedeaman your right.Cities,towns
and regions,and individuals better have a plan B.
Never under estimate the human spirit.I just fail to see the humour in thousands of families losing thier life long dreams.
“Ottawa and the Ontario government are contributing a total of $3.2 billion in loans to keep Chrysler Canada alive, including $850 billion extended to the ailing automaker at the beginning of the year.”
Certainly this must be million, I doubt the Canadian govermment has nearly a trillion dollars for anything.
The government has some nerve asking us to fork over thousands of dollars in income taxes only to spend that kind of money on votes in democratic states. And they wonder why the Tea Parties were organized.
South Bend (not “Studebaker Indiana”) closed up 99% of it’s US operations just before Christmas 1963.
By 1971, South Bend had completely recovered.
1971 was very different, economically speaking. The earning power and employability of the middle class has badly eroded since then.
The other problem is timing: pulling the plug on a major employer when we’re hip-deep in one of the largest recessions since 1930 is not sound economic policy. The idea behind what’s being done to GM and Chrysler (and the banks) is to soften the blow. Were this 2005 or 2011, I don’t think we’d be seeing the same level of stewardship, and indeed if either company survives to see the end of the recession, they’ll find government support lacking.
Of course, it’s much more fun to believe that there’s some shadow UAW/Democrat conspiracy to bring communism to the United States.
Hey Mikey, you’re an ex-autoworker, right? Did you vote NDP without fail?
@ dew542512 No one has asked to gold plate our entitlements.We are asking for the Government to honor thier promise.
The NDP government in the early nineties let GM off the hook for thier pension contributions.GM was too big to fail.Right, so GM had to make mega payments to the pension gauranty fund.Call it insurance if you will.
Well GM is failing now!
Now the province say “we don’t got enough dough”
A spokesman for the salary retirees group,put it this way If your house is on fire and you get a call from your insurance guy “sorry folks we decided not to cover your loss”Your not gonn’a be really happy eh?
We were told the insurance will cover up to 1000 a month.
Anybody that lives and pays taxes in our little socialist utopia knows one fact for sure.
All levels of Government will pay one way or the other.
NO! psar never.As matter of fact I’m a card carrying Liberal,and proud of it
In the end the gub-ment loses when taxpayers end up not making as much money. Sure, they can increase the grab on what little is left but that is mighty risky because that leaves little for other things, like food.
I’m waiting for the public sector to take a hit on their job security. They are not immune to a reset, they just think they are.
@Mikey,
A couple of facts to consider:
When GM was let off the hook the CAW also let them off the hook (probably for something additional in the contract)
No government in the western world will guarantee private pensions for the same reason they will not guarantee incomes. They don’t have the money to support it! (Guaranteed incomes are the penultimate socialist wet dream which replaces welfare and give all citizens a guaranteed income so no one has to work anymore)
If Chrysler goes T.U. I have heard a number bandied about that the pensioners will lose something like $400-$800 a month in income (give or take).
The role of the Government is to ensure that citizens are not starving and living out on the street. This is why the Government has an old age pension scheme to ensure this doesn’t happen. So if the CAW pensioners are still getting $800 to $1000 a month (give or take) in income after Chrysler dies the Government will not give them any extra as they have sufficient income to keep them from living on the street and its more than what the old age pension is paying.
PS: I’m guessing on the pension income here – I confess I have no idea what a CAW pensioner would make but assuming that the CAW workers pension plan gets the legal maximum every year I would assume its generous by any standard.
The role of the government in this situation is NOT to ensure that a pensioner can go to Florida every winter or flip their grandson $50 for their birthday or buy a new Toyota every 3 years.
What the CAW workers and pensioners are demanding is for the government to top up their pensions so the pensioner does not lose anything. Sorry, this cannot happen even in socialist Canada as the public backlash would kill any politician stupid enough to try it. It would also put the Government on the hook for all private pension plan shortfalls in the future.
The worst case scenario here is that a bunch of people retire and end up on Gov’t old age pension rather than having their private pension to support them. This is definitely cheaper than guaranteeing private pension plans.
@mikey – continued:
In regards to the guaranteed pension benefit issue you referred to please check out his link:
http://www.fsco.gov.on.ca/english/pubs/consumerbrochures/your_pension_rights.asp#o
Essentially the government plan is very limited in scope and application and is NOT intended as a top up for generous pension plans.
The PBGF does not cover:
* benefits provided by MEPPs;
* benefits in excess of $1,000 per month;
* benefits payable under a plan that is less than three years old;
* any benefit improvements that came into effect in the previous three years;
* certain types of special benefits, such as plant closure benefits;
* benefits provided by pension plans where an employer’s obligation to contribute is limited to a fixed amount set out in a collective agreement;
* DC plan benefits;
* certain public sector pension plans; or
* benefits provided by plans referred to as “designated” plans under the federal Income Tax Act.
NO! psar never.As matter of fact I’m a card carrying Liberal,and proud of it
Which was my point. People seem to have this impression that the union votes in a block, usually for the party they don’t like.
Every union person (CAW, Teachers, Steelworkers) I know who votes, votes Conservative. Every single one. I suspect it’s not quite as linear in the US, but highly doubt that, of the half-million UAW workers, even half that number show up to vote, and less than that would vote Democrat.
But of course, there’s a conspiracy.
(I’m a former NDP’er and a current Green, myself, but that shouldn’t surprise)
Certainly this must be million, I doubt the Canadian govermment has nearly a trillion dollars for anything.
Either it is a typo as you say, or it includes the U.S. totals. If Canada had that kind of cash lying around we would have bought Jamaica by now.
The worst case scenario here is that a bunch of people retire and end up on Gov’t old age pension rather than having their private pension to support them. This is definitely cheaper than guaranteeing private pension plans.
That’s not the worst-case scenario. I don’t think people who don’t live in an auto-industry town appreciate how much spending power automotive pensioners actually have. In Ontario, you’d be putting a bullet in St. Catharines, Whitby/Oshawa/Bowmanville and Windsor/Chatham. Brampton and Oakville will take it on the chin, too.
Put it this way: there are very few young guys working at GM, Ford or Chrysler and they’re not exactly hiring. There are a lot of people who used to and have retired or been bought off. If their pensions disappear, so does a big chunk of money spent in the local economy. You’d create an instant rust-belt that will, frankly, cost more to fix than it would to avoid in the first place
If I were the government, I would be ensuring these pensions stay in place for one or two years, and start putting programs together in that time so that there’s somewhere for these people to turn because, quite frankly, they’re not all that employable.
Especially if I was, oh, the federal Conservative Finance Minister (Jim Flaherty, Oshawa), Justice Minister (Rob Nicholson, St. Catharines), or the conservative MPs for Oakville. Young people by and large don’t vote Conservative. Women don’t vote conservative. Unemployed poor people don’t vote conservative Killing the pensions of the only people who do (old white middle class guys) is not a path to reelection.
Psar,
“1971 was very different, economically speaking. The earning power and employability of the middle class has badly eroded since then.”
No. Not even close. First, you need to define middle class (and in your case country). Second, you need to avoid the average household earnings trap, it’s a lie, the average household has fewer people, actual average AND median is up, way up. Median occasionally retreats in the short term, but never over a ten year period. The whole gap argument is a lie built on a deception.
Then you need to say what you meant by employability. You may have a point there, but I don’t know the facts, or what you mean.