According to The Financial Post, The International Association of Machinists and Aerospace Workers (IAM) is accusing Toyota of "unduly influencing employees to vote against a union in a certification vote." In a complaint filed Monday with the Ontario Labour Relations Board, the union says Toyota Canada is distributing anti-union documents to employees and putting "vote no" signs inside the plant where they build the Corolla, Matrix and Lexus RX350. The move is largely seen as saber-rattling ahead of this Thursday's unionization vote. The stakes couldn't be higher. If the IAM gets its foot in the proverbial door, Cambridge will be ToMoCo's first wholly-owned unionized North American plant. Thin end of the wedge? An excuse to slowly shift production out of Canada? Or yet another thwarted attempt to infiltrate the world's largest automaker's NA ops? We should know by week's end. Meanwhile, Automotive News [sub] reports that workers at two Johnson Controls factories (Alabama and Mississippi) rejected the United Auto Workers' [UAW] efforts to unionize the workforce. It's a major defeat for the UAW; Johnson is the fourth largest U.S.-based automotive parts supplier.  

Last January, Transport Minister Lawrence Cannon said that Canada will match the U.S.'s fuel-consumption benchmarks for new cars and light trucks. Meanwhile, Quebec and Manitoba have pledged to adopt more stringent California standards while Ontario warns that its automakers can't possibly meet them. The Canadian Press reports that Transport Canada is studying the trade-off between fuel-economy and safety. Even before the results are known, Canada's greens are up in arms. Clare Demerse, senior policy analyst at the Pembina Institute: "I would hope that the government would not, in any way, use this kind of research… as an excuse not to go the more aggressive vehicle efficiency standards." George Iny, president of the Automobile Protection Agency: "If you could reduce some of the presence of those large-type vehicles, unyielding full frames, you would be improving vehicle safety most likely." Why let the facts get in the way of PC public policy?

A few days back we asked "Does God Hate Chrysler?" We're beginning to think that was more than just a rhetorical question. Regardless of your theological beliefs, it's obvious Chrysler has pissed off someone on a higher plain of existence. Hot on the heels of broken equipment, bankrupt suppliers and assembly plant fires, a "mechanical problem" forced Chrysler to shut down their main office in Windsor, Ontario. Mlive doesn't identify the culprit, but they revealed that the utility company has cut off the building's water and power. Chrysler hasn't said how long it'll be before their Canadian HQ is back in operation. Farago thinks there may be a terrorist/disgruntled employee lurking behind the scenes. I'm thinking Bob Nardelli needs to hire an exorcist.

"It is not hard to imagine a time in the not-too-distant future when General Motors Corp. will not exist. In fact, a lot of investors are imagining such a scenario… The GM-is-dying argument is certainly compelling, which is why the stock is down 75 per cent over the past eight years." Of course, the Globe and Mail's eye-opening lead is the prelude to an argument that GM's shares are undervalued. David Berman says GM could be a terrific buy IF the automaker returns to profitability. "A number of savvy institutional investors, not exactly prone to making silly guesses, are making big bets on a recovery." The "number" of investors adding to their GM shares seems to be one: "Legg Mason increased its holdings in GM by 5.4 million shares at the end of 2007, bringing its stake to 15 million shares." Yes, well, good luck with that. The more important point: the Mail's tacit admission that The General is in a fight for its life which it could well lose. This marks a fundamental shift in perception. If the [erstwhile] car-buying public picks-up this vibe (so to speak), it could further depress GM sales, which would push them further and faster towards Chapter 11. Send in the flacks, STAT!

Finally, it looks like the other shoe is dropping. Nine days after Toyota slashed prices on 16 of its Canadian models, its greatest emulator, Hyundai, has followed suit. CanadianDriver.com reports that Hyundai has recently clawed back the prices the Tiburon and the Tuscon L by $3,000 and $4,200 respectively. So how does this stack up against U.S. pricing? According to Hyundai.com, a new base-level Tiburon now costs $15,995 in Canada vs. $17,025 south of the border. The Tuscon is now cheaper north of the border, at $16,995 versus $17,235 in America. Before you Americans start drafting your business plan around a Canadian domestic market importation scheme, beware: the base Sonata is still more expensive in Canada, relieving of you $18,995 Canadian or $17,670 American. Now that Chrysler, Toyota and Hyundai have put the squeeze on dealers at other car companies' franchises, we expect many more "adjustments" to come. [thanks to Dave McDonald for the tip]

Two leasing companies are taking issue with Canada's restrictions on importing vehicles from the U.S. Globe and Mail reports Fournier Leasing and Canadian Auto Associates have filed a class-action lawsuit against Transport Canada and the Canada Border Services Agency alleging they're part of a conspiracy to keep vehicle prices high. BMW Canada, Mercedes-Benz Canada and Mercedes-Benz USA are also named in the suit. The leasing companies claim Canadian import requirements reduce competition and raise prices 20 to 35 percent above similar U.S. models. They also say government restrictions on importers add additional costs. M-B Canada had no comment. BMW Canada said they weren't aware of the lawsuit, which seeks damages in excess of $1b.

Canada's ZENN, Dynasty and Electrovaya make small, four-wheel, electric cars classified locally as Low-Speed Vehicles (LSVs). They mostly sell these zero emission machines to Americans as Neighborhood Electric Vehicles (NEVs). Though the 25 mph max speed NEVs must be approved at the local level, they are potentially legal on 35 mph roads in 40 US states. The Canadian EV makeers desperately want to sell their products in their home market. As The Toronto Star reports, both Transport Canada and Ontario's Ministry of Transportation restrict the sedate LSVs to "planned" areas like campuses and retirement communities; LSV owners are legally banned from taking their chances among Canada's mix of normal, fast and insanely fast traffic. While slower bicycles and scooters also use Canada's streets, officials are hung-up on the fact that the LSVs look like cars but don't have airbags, side-impact reinforcement or meet any crash-test standards. Makes sense, but is it sensible?

Although Canada is the highest-cost location in North America in which to build a car, Canadian Auto Workers (CAW) union president Buzz Hargrove maintains he'll allow no concessions on salary or benefits in the contract negotiations this year. "We're not going to try to buy jobs by being the cheapest workers in the world," he told CAW workers meeting in Toronto. The Globe and Mail says Harvgrove and his hired economist, Jim Stanford, both deny the concessions given by the UAW last fall are equivalent to a $25/hour labor cost reduction. The fact that the exchange rate has driven Canadian wages and benefits to the equivalent of $80/hour in the U.S. is irrelevant to Stanford. He claims the higher productivity in their plants more than makes up for the cost difference between the average CAW and UAW worker. We'll see how long this posturing lasts once the negotiations start. At that point, it will most likely turn into a bidding war between the CAW and the UAW for the "right" to build new and existing product.

The Detroit automakers aren't the only ones feeling the cost crunch in Canada. The London Free Press reports our neighbor to the north is also the most expensive place Toyota assembles vehicles– in spite of a distinct lack of Canadian Auto Workers' union members. And yet, in spite of higher operating costs, ToMoCo may be looking to expand their RAV-4-producing Woodstock assembly plant even before it opens next fall. Toyota's playing down the rumored expansion. They're declaring that the plant must first open and perform before they'll consider adding more capacity. When asked why they'd consider spending more on a plant that already costs so much to operate, Toyota Canada's president Yoichi Tomihara replied "Toyota's philosophy is to make the investment in the long term, not the short term." Toyota executives also said they don't let current market conditions sway their strategy; economic conditions can change. Besides, they added, they like making vehicles in Canada. I'm thinking ToMoCo likes it anywhere where they don't have to deal with a labor union.

GM's record losses last year is Canada's fault– at least part of it anyway. GM CFO Fritz Henderson told Financial Post "three-tenths of a billion" of the $38.7b loss was due to foreign exchange losses. In other words, "This is largely driven by the strengthening C-dollar versus the U.S. dollar and the impact on our balance sheet through the 2007 calendar year." And in spite of CAW president Buzz Hargrove's insistence he will give no concessions in the upcoming contract negotiations, the handwriting is on the wall; Canada is now the most expensive place in North America to build cars. David Healy, an analyst at Burnham Securities: "[GM]'s strategy would likely be to do some hedging and hope that everything settles down. But Mexico and the U.S. are looking more attractive than they were to build future product." Looks like Buzz may be reconsidering his stance, if he wants to keep his union's members employed and paying their dues.

Canada.com reports that Transport Canada has concluded a pilot study of a GPS-based speed governing system that may intervene to cut throttle inputs in speeding cars based on their location. T-Can researcher Paul Boase breaks it down: "The technology has the ability of just saying, OK the posted speed limit is 50, so we'll let you go 55, that's it". Though the vehicle could be fitted to any new vehicle, Boase suggests its primary application should be for repetitive speeders who need a little "help" maintaining a safe cruising speed. So… what about those rare moments when breaking the law is actually the safer thing to do? What if an emergency vehicle comes up behind you? What if you need to speed to duck out of the way of someone who has crossed over the median? What if you're driving a woman in labor to the hospital? A manual override makes the device useless, but no override makes its dangerous. Nevertheless, the idea grabbed the attention of the Alberta's transportation ministry, which is highly interested in the research.

Just as TTAC's Samir Syed was getting himself all hot and bothered about the car price differential between new cars in Canada and the U.S., Toyota ran him a nice cold bath. The automaker is slashing its Canadian prices to reflect what Stephen Beatty, managing director of Toyota Canada, calls the 'new normal.' Driving.ca reports that ToMoCo CA's cutting the manufacturer's suggested retail price (msrp) on 16 Toyota and Lexus models by a range of $750 and $8,100. Some examples (all in Canadian dollars): a Yaris hatchback drops five per cent ($750) to $13,165; the RAV4  falls 6.8 per cent ($2,000) to $27,400; the Tacoma pickup truck drops 10 per cen ($2,290) to $20,470; and the Lexus IS sports car decreases 13 per cent ($4,650) to $31,900. Beatty denies that a two percent drop in Toyota sales spurred the move. "This isn't about weakness in the marketplace… There is a difference structurally today in the marketplace from where we were last year." Oh, do the math and the RAV4 is still more expensive in Canada than the U.S. I guess the new normal is the same old you-know-what, only less. 

When Toyota got slammed by Consumer Reports (and others) for declining product quality– the brand's raison d'etre– ToMoCo CEO Katsuaki Watanabe practically committed seppuku on the spot. Of course, he didn't; Watanabe said his company would do whatever was necessary to ensure that Toyota raised the bar for its product quality worldwide. Despite Toyota's southern plants, the man wasn't just whistling Dixie. Canada's Globe and Mail reports that the automaker has put the brakes on a new assembly plant in Woodstock, Ontario to ensure product quality. “We're very optimistic that we're going to have a good ramp up but I'm going to go slow,” admitted Ray Tanguay, president of Toyota of Canada. “Quality first before anything.” Either the Mail forgot to ask– or Toyota refused to reveal– the precise reason for the holdup. Perhaps, as the Mail hints, it's got more to do with the slowdown in the North American market. Or not. In which case, point taken.

The revival of Ford's defunct Windsor, Ontario engine plant may hinge on Prime Minister Stephen Harper's electoral ambitions. Here's the deal.. Each time the Canadian dollar rises, the divide grows between Canada's two most prosperous provinces. On one side we have Conservative Alberta, Harper's home turf, whose petro-success has strengthened the Canadian loonie. On the other side we have Liberal Ontario, the former industrial powerhouse, whose fortunes and competitive advantage have diminished in direct proportion to the loonie's ascent. In the past, Harper has rejected the call for manufacturing subsidies, pissing off Ontario no end. However, this time, an election looms; Harper needs votes in Ontario. Signaling a possible shift in government policy, Harper's industry minister Jim Prentice has hinted that Ford's Windsor plant may be eligible for a chunk of the $350m hardship fund earmarked for Ontario. The Globe and Mail reports that Prentice has pinned the chances of Ford receiving the money on just how much Ontario's provincial government, led by Liberal Dalton McGuinty, cooperates. And if neither Ford nor Dalton play by Harper's rules, well, GM is also lined-up to receive some that loot to build a six-speed transmission plant in St. Catharines, Ontario. Realpolitik, eh?