Reid Bigland may sound like the name of a Harold Robbins character, but he’s the CEO of Chrysler Canada. And good for him! But apparently this little factoid is not important enough for The Montreal Gazette. The paper published an article penned by Mr. Bigland entitled “Chrysler: It’s all about great products,” with the sole identifier “Freelance.” That said, if you had any doubts about the author’s paid Pollyanna perspective, a quick read– noting the use of the royal “we”– will disabuse you of those notions. “Nearly half of all Canadians are buying four-cylinder vehicles, and over the past year we have launched three outstanding products to appeal to these consumers. The Dodge Caliber, Jeep Patriot and Jeep Compass all offer our four-cylinder World Engine – Chrysler Canada’s most fuel-efficient powertrain. Equipped with this engine, these vehicles achieve better than 7.1L/100 km (40 mpg). Our trio has proved extremely popular, with sales up 30 per cent calendar-year-to-date through August.” Meanwhile, in August, Chrysler’s Canadian sales slid 24.2 percent to 15,548 units. Car sales fell 39.3 percent to 2,517, while truck sales were down 20.3 percent at 13,031. Anyway, who said the Volt was the only Americna revolution [not] in town? “The all-new 2009 Ram is a game-changer that really raises the bar for the competition.”
Category: Canada
An old buddy of mine, who became an organizer for Liberal Party of Canada, once told me “nothings smells like elections more than asphalt.” The pre-election release of the purse strings is a tradition as old as democracy itself. Machiavellian and cynical? Damn straight. It now appears that Canada’s federal government is ready to take the cynicism to a whole ‘nother level by promising old money before an election. It’s not new money, it’s only a reiteration of something that’s been known for months. The Globe and Mail reports that Canadian PM Stephen Harper will travel to the heart of Canada’s rust belt to announce $200 million in pork for Ontario’s ailing automotive sector. That Ontario hold over 100 of the parliament’s 308 seats has absolutely nothing – nothing, I swear – to do with the announcement. Neither does the fact that Harper is expected to dissolve the government by Friday in preparation for the third federal election since 2003. Or that Harper`s government has been repeatedly taken to task by Ontario’s provincial government over its constant refusals to “invest” (i.e., give money) to Ontario’s automotive sector. The fact is, the announcement of this money dates back to Finance Minister’s last budget. It’s such old news that I asked Buzz Hargrove about it back on July 29th. What did Buzz say? “It’s peanuts”.
Despite the headline claims of, um, some Motor Authoritative sources , Peugeot is not coming to the United States any time soon. And Canada would be a real stretch. The basis for the claim is that Peugeot is looking to expand the number of markets in which it sells cars, and the French company brass said "with the American dollar being weak, sure, it's possible." But that's not enough. This story comes out every few years , and it's no more true this time around. As much as this writer and probably many other European car lovers would be excited at the prospect of another affordable marque in this country, it's not gonna happen any time soon, or any time not as soon. Americans are still politically not so hot on the French, then there are dealer/service/parts infrastructure issues (namely that there isn't much of anything left from 20 years ago), the added cost of engineering for our emissions and crash standards, and the inconvenient reality that most Americans still aren't truly warmed up to small cars. Not to mention, the current Peugeot lineup is seriously strange.
As Reuters notes, 90 percent of the vehicles Ford builds in Canada end-up in the U.S. So, despite the fact that the Ford F-series is still the best-selling vehicle north of the border, Ford Canada is suffering. All of which leads to the suprise (really?) resignation of Barry Engle, Ford of Canada's president. Though Engle has served for several years for Ford and Chrysler, working in several capacities around the globe, he decided to exit the auto industry just six months after assuming FoMoCo Canada's top job. Engle's new job will be in his native Pennsylvania, working for an agricultural equipment company; IMHO he's using "family time" as a smokescreen. Time for a Lilly Pulitzer: did he fall or was he pushed? And why?
When CAW Prez Buzz Hargrove told me a GM C11 is inevitable, I wondered if Canadians might have a more realistic idea of The General's financial health, or lack thereof. The Toronto Star provides confirmation. The paper reports that GM's Ontario workers have noticed that the automaker has taken full advantage of a company- specific exemption allowing them NOT to fully fund the workers' defined-benefit Canadian pension plan. Which GM hasn't done since 1992, to the tune of $5b. [A defined-benefit plan obliges GM to pay out a fixed, agreed upon amount to its beneficiaries– no matter what's in the fund.] "My concern is that, if GM goes into Chapter 11 bankruptcy protection in the U.S. or they go bankrupt altogether and out of Canada," a retiree worried. "My pension is going to be cut nearly in half." It seems GM's legislative loophole was worth every penny the company spent acquiring it. For GM, anyway.
Basil "Buzz" Hargrove has been active in the Canadian Auto Workers (CAW) since its inception in 1984, including sixteen years as President. To put that in perspective: during Buzz' tenure at the top, he's seen five Canadian Prime Ministers, five Ford CEOs, four Chrysler CEOs, four GM CEOs and countless union actions. As I sift through the archived newsbites that capture his soon-to-be legacy, I'm left a little overwhelmed. For better or worse, Hargrove's fingerprints are all over the Canadian automotive lanscape. And tomorrow, at 11 AM in Toronto, I'm sitting across the table from the man himself on your behalf. So I turn to you, our Best and Brightest, for a little help. What should I ask Buzz Hargrove? Obviously, I can't promise I'll forward every question posed here. But if the deal goes down (i.e. Buzz doesn't read this blog post before tomorrow), you know I won't shy away from the tough questions. And neither will Hargrove.
After accusations of "betrayal," blockades by the Canadian Autoworkers union, threats of lawsuits against the union and sops tossed to the union, GM is moving ahead with plans to close their truck plant in Oshawa, Ontario. However, it looks like it'll cost them a bit more than they'd anticipated. The Globe and Mail reports GM and the CAW have struck a deal whereby GM will add another model to the mix produced at the auto assembly plant there. Oh, and pay some workers for four years after the plant closes. The complete details of the deal will be announced to workers later today, but it includes paychecks for laid-off workers with 26 years seniority for four more years at 65 percent of their current wages. That makes them eligible for "a special retirement incentive applicable to people with 30 years of experience." Workers with 27 to 30 years would also be paid until they reach the 30-year mark. In return, GM gets to keep building cars in the most expensive location in North America. Such a deal!
Our contacts at Ford tell us there's big trouble brewing for The Blue Oval Boys. Two independent sources report that FoMoCo is ceasing production of the fresh-out-of-the-box Flex in their Oakville, Ontario plant. Apparently, the factory has built some 13k xB-shaped CUVs since production began on June 3– and sold [a lot] less than a thousand. Our correspondent tells us "the 500 additional employees that they were hiring for a third shift have been canceled… The CAW [Canadian Autoworkers Union] is not too pleased." If true, Ford's beancounters will share their dismay; the automaker spent over $1b converting Oakville to, wait for it, flexible manufacturing. While we seek further confirmation, a TTAC tipster working at a supplier for the Ford Edge (also made in Oakville) says dropping sales are leading to a severe cutback. "Our schedulers are trying to get some hard numbers so they can work out our shifts." You want hard numbers? Although Edge sales are up 16.8 percent year-to-date, they fell off a cliff in June, down 19.9 percent. The same fate befell the Lincoln MKX (the Edge's twin under the skin), up 4.2 percent year-to-date, down a whopping 34 percent in June. We will keep you up-to-date with new info as we receive it. One thing is for sure: when Ford reports its financials on Thursday, there will be Hell to pay. [thanks to our sources]
Canadian Auto Workers (CAW) union president Basil a.k.a. Buzz Hargrove is stepping down early. Although Buzz was expected to retire when he reached the mandatory retirement age of 65 next year, he's now leaving "soon after" the union selects his successor this summer. His hand-picked heir-apparent is the equally-outspoken not-to-say borderline-militant Ken Lewenza, current president of Windsor, Ontario Local 444. Buzz is leaving amid the controversy we've all come know and love; rumors say the national executive board is pressuring their staff to support Lewenza's bid. The Victoria Times Colonist quotes columnist Gord Henderson, who describes Buzz' golden boy as having a "Dr. Jekyll-Mr. Hyde persona" whose "flights of rhetoric are a wonder to behold, akin to watching Mount Vesuvius blow its stack." So we shouldn't run out of Lutz Award-worthy quotes from north of the border. With Canada's dubious distinction as the highest-priced labor force in the North American and auto industry manufacturers shutting down Canadian plants, Lewenza will have plenty opportunity to display his brand of "old-time table-thumping unionism." So don't go away; we'll be back with more!
Amidst all the buzz surrounding controversial abortion activist Dr. Henry Morgantaler's elevation to the Order of Canada, you may have missed the fact that the same honour has been bestowed on long-time Canadian labour leader Basil Hargrove, or 'Buzz' as we know him 'round here. The Order of Canada is Canada's highest civilian honour. The National Post reports that Buzz was given the award for "his contributions as a labour leader who is respected on both sides of the bargaining table, and for his advocacy for equality and human rights in Canada and abroad." Though many will argue Buzz was intensely active in keeping Canadian labour costs artificially high, and thus, shares some responsibility for the current decline of Ontario's automotive sector, Buzz's long and illustrious careers remains one of great renown. From his humble beginnings as a Chrysler line worker, to his soldiering for the then-CAW leader Bob White in the 80s, to obtaining his own mandates as leader since 1992, Buzz was instrumental in every major CAW negotiation for the last twenty years. History will judge Hargrove harshly, though, for the closure of GM-Oshawa and the decline in the CAW's bargaining power during his reign. 
July 1st was truly a landmark day for Canadian motorists. In addition to the start of a cell phone ban in Quebec and a carbon tax in British Columbia, drivers across Canada now face huge penalties for driving while stoned. No longer can Canadians re-create the infamous Cheech & Chong hotboxed car sketch. The CNews reports that police can now require drivers to submit to roadside drug tests. In addition, police can force suspected stoned motorists to go to a hospital or a police station for further testing. The whopping penalty for driving under the influence of drugs: CA$1,000 (minimum) for Strike 1 and jail time for Strike 2. Refuse the tests and you've committed a criminal offense. Though it goes without saying in The Sun, all of this is in addition to any other charges for possession and trafficking of classified substances that may be brought. Bummer.
Ontario's struggling manufacturing sector took another blow yesterday. CNews reports that Oakville, Ont-based automotive supplier Polywheels has shut down indefinitely. Workers arrived for their 7am shift on July 2 only to find the plant closed and shut down notices posted at the entrances. The workers, represented by the Canadian Auto Workers (CAW), were surprised that the company shut its doors without warning. "I'm upset because this is a good factory, they had good, good benefits," emotes a local worker in a moment of unionist entitlement. The Toronto Sun reports that American Axle's own strike, which halted production of Polywheels' bread and butter models (e.g. Sierra/Silverado) was a body blow for Polywheels. The subsequent rise in gas prices was the coup de grace, according to another worker: "We figure out how to bring the price of oil down and we'll all be fine." Easier said than done, I suppose. [Thanks for Michael Kirouac for the tip]
Today marks Canada's 141st anniversary. CTV reports that British Columbia's motorists can now look forward to higher motoring costs. That's right, Premier Gordon Campbell's "carbon plan" goes into effect today, costing motorists an extra $0.024/L per fuel in carbon tax. According to Campbell, the plan is "revenue neutral;" any extra revenue will be offset by income tax cuts. The aim, of course, is to tax consumption rather than income, thereby providing an incentive to reduce fuel consumption. Obviously, some of the highest gas prices in the ten provinces (as B.C. has) were not enough. Despite assurance from Campbell, many British Columbians are weary. How can its provisions be enforced without earmarking funds and major transparency?
Programs to buy back beaters have been implemented in California and Texas, pulling thousands of polluting vehicles of the road each year. Canada's program to buy back old, polluting cars is set to roll out in January of next year. The Detroit News reports that the three-year Canadian program is targeting 50k buybacks, or about one percent of all cars on the road. While provincial governments have implemented similar programs, this will be North America's first nationwide buyback program. The $92m program will offer drivers $300 per running beater, or discounts on bicycle purchases or a public transit pass. Busting-out the old calculator, it becomes obvious that buying 50k cars at $300 a pop would set back the Canucks $15m. Some $77m of the program will be going… somewhere else. But don't expect opposition to the program. The Alliance of Automobile Manufacturers spokesman Charles Territo says "we strongly support efforts to get older, less-efficient vehicles off the roads and help consumers." Because they'd rather you buy new than drive your clunker till it breaks, of course. Which means the only people who won't be thrilled by this program are people who care how their government spends money… and know how to use a calculator.
The Canadian Autoworkers Union (CAW) ended its two-week blockade of GM's Oshawa truck factory this morning, in compliance with a court injunction. The Detroit Free Press reports that the CAW is ditching the barricades for "other actions." CAW Chairman Keith Osborne tells the Freep that union lawyers will meet today to discuss the possibility of filing a complaint with the Ontario Labor Relations Board. But while the CAW lawyers talk offense, GM spokesfolks are trying to leave the unpleasantness behind: "Now is the time to focus on discussions on new product mandates for Oshawa and support for affected employees." And apparently GM's backing its words with… more words. Bloomberg reports that "GM is in preliminary talks to add a third vehicle at an Oshawa car plant," in addition to the "second car" promised to CAW in their month-old labor agreement. The Toronto Sun says that the Camaro and the unnamed rear wheel-drive "second car" planned for 2011 could be joined by a front wheel-drive model, thanks to the Camaro's flexible production line. Ontario may not be the cheapest or most efficient place to build vehicles, but its tax-dollar giveaways are world class. Expect public money for the third vehicle line to smooth things over between GM and the CAW. It's win-win– as long as you're not a Canadian taxpayer.
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