It looks like the prospect of getting a partial payback for its investment could have hastened the deal reached between General Motors Canada and its autoworkers’ union.
The automaker could have up to 40 percent of the money invested in its Canadian operations handed back by the Ontario and Canadian governments, according to a report in the Globe and Mail.
If the full amount is realized, it means a government cash injection of $56,410 per autoworker.
There was already talk of hands-off government intervention before the two sides reached a last-minute agreement on September 19. Unifor president Jerry Dias mentioned the looming changes to the federal government’s Automotive Innovation Fund (which moves from low-interest loans to grants), claiming the switch would help seal a deal with GM Canada.
After 3,900 union members ratified the $554 million (CAD) deal, GM Canada claimed it was “in discussions with the federal and Ontario governments toward potential support agreements to help optimize the competitiveness of our Canadian operations for the future.”
The deal sees unfinished full-size pickups sent to the automaker’s Oshawa plant for final assembly, and product diverted from Mexico to its St. Catharines engine and transmission plant. Workers covered by this collective agreement are employed at these two plants, plus a Woodstock, Ontario parts facility.
According to the Globe, the federal fund and Ontario’s Jobs and Prosperity Fund could hand GM Canada a total of $220 million. That’s assuming the full sum of the investment qualifies for the two programs, each offering up to 20 percent.
One industry source told the publication, “you can get 20 percent by showing up.”
If the remaining two Detroit Three automakers know this, Unifor’s job of securing investment becomes much easier. Among the Canadian facilities seeking upgrades or new product are Fiat Chrysler’s Brampton plant and Ford’s Windsor engine facility.
Both governments paid a total of $13.7 billion to GM Canada and Chrysler Canada in 2009 to keep the companies afloat. The federal government’s contribution to GM was $7.23 billion.
[Image: General Motors]
is there a business case for shipping truck bodies so far for completion only to then ship them again for sale? Or is this decision made for political reasons?
You seem to be implying that it’s possible do something with a union and *not* have it be laced with politics.
The ingredient that causes politicization, is the government. Not the unions per se. The latter are just attempting to do the best they can for their members, by adapting to life in a totalitarian world.
$56,000? Greasy kid stuff. Down south it’s more like $200,000 per job, with some calculations for the VW plant in Chattanooga are closer to $285,000 per job.
And to think that some consider my views on protection extreme. Go figure. If the Canadian taxpayers consider this efficient I hope Canada goes broke.
Why not let the sh!t loss makers sink and use this waste to reduce taxes on viable profit making businesses.
What a irresponsible government.
The Ontario provincial Gov’t is horrendous.
The federal gov’t changed last year. The previous gov’t refused to provide grants to Chrysler, just low interest loans. This gov’t is of the belief that they can positively influence the economy by taking an active stance. They are of course wrong.
@BAFO – Where’s the “protection” of US trucks you consistently yammer on about? This just spreads out the labour. And why doesn’t this “protection” fairytale work so well on the Tundra, Titan and Ridgeline?? Does it pick and choose what to trucks “protect”???
BAFO – “And to think that some consider my views on protection extreme.”
They are extreme considering the fact that you are a “lifer” civil servant.
Don’t worry with PM Trulander in we’re pretty much on the way :) (Trudeau + Zoolander)
big al – “PM Trulander” ROTFLMFAO
Let me thank Canadian taxpayers in advance, in case my next new car happens to have a VIN that starts with “2”. Anyone else willing to subsidize my next car purchase? The bidding is open.
The “Tesla survives on government money” crowd can weigh in now.
Hello?
This is really a sign of a weak economy, that the government is willing to throw this much money toward so few jobs. If things were going swimmingly in Ontario, the government would have let GM walk.
Unifor has won a major victory here. So, just what is the limit of government corporate welfare?
Well, they do. The fact that GM also does really doesn’t change that.
Not sure why it matters. Everyone knows government money grows on the Magic Money Trees they keep at Area 52.
How many bloody Areas are there?
Just 2. They numbered them that way to fool the Russians into thinking there were more.
@Kenmore – Don’t worry, your stainless steel shell protects better that aluminum foil hats.
Little happens in Soviet Canuckistan without corporate welfare.
A billion here, a billion there, pretty soon you’re talking real money.
Well, it’s either “Soviet Canuckistan”, or Communist China – seems to the implied choices these days to keep jobs in our hemisphere…
Not surprised by the “Soviet” and “totalitarian” remarks.
The neoliberal right tends to be myopically predictable. Add to that Trump’s poor debate performance and all of that stress and anxiety about Hilary as commander in chief has to bubble out somewhere.
The force is strong within the disciples of Milton Friedman.
56,410 per worker!
(85,641 per worker is GM’s portion)
How many dependants does each worker have?
How many businesses provide food, clothing and assorted services to each worker?
Is it worse to let the industry collapse completely and have the government spend 56,410 per worker, and per dependant and per tertiary support workers in direct welfare?
How did the USA economy fare with the auto industry bailout?
Why don’t you google corporate welfare especially in the USA?
Note to self: anything remotely pro-worker especially workers under the umbrella of a union is bad.
Every time I’m away a while and come back, someone else is gone. Now where’s PCH101? Alex?
an innocent man – Pch101 is around.
Only m is the globe and mail got ir wrong, the investments agreed to in the contract do not hinge on government money, gm has agreed to put this money into the plants, and and are now contractually obliged to do so as the contract has been ratified, there is no clause saying conditional on government aid. They are however in talks for future investments, now if the government wants to give them money they don’t have to that is another matter altogether and would no surprise me if they did (and GM isn’t likely to refuse it are they?)