Canadian Auto Workers President Ken Lewenza calls on the Canadian government to craft a national auto policy to prevent the country’s automotive sector from shrinking further.
“We don’t know how committed the government is to a national auto policy,” he says today in a conference call with the media. “The auto industry should be a national economic priority.”
Lewenza says it’s time for industry leaders and government officials to collaborate on a long-term policy that will keep Canada competitive in the global auto industry.
Jim Stanford, CAW economist, says the Canadian auto industry has contracted since the turn of the century. Once No.4 among the world’s top auto manufacturing nations, Canada has fallen out of the top 10.
Five auto plants have closed since 2001, with a sixth one, in Oshawa, ON, slated to shut down within a year, he points out. “All of Western Europe lost two plants during the financial crisis. Germany has not closed plant a since World War II.”
Some of Canada’s decline was due to the global economic recession, but the union now believes the industry could be poised for growth.
“There is an enormous opportunity right now,” Stanford says. “Sales are rising strongly in North America, and prices are rising.”
Among misconceptions surrounding Canadian auto workers is that they earn more than other auto workers in the world, the CAW says.
“This is false,” Stanford says. “In Canada, consumer prices are higher than the U.S. Home prices are more than twice as high and gas is 26% more. If you compare all-in active labor costs, ours are 6%-7% lower (than the U.S.).”
He says the CAW’s refusal to accept a tier-2 pay structure similar to that adopted by the United Auto Workers union hasn’t caused auto makers to move jobs to the U.S., as some believe.
Canada has retained three-fourths of its production jobs since 2006, while the U.S. has kept only two-thirds, Stanford says, citing productivity in Canada that is 5%-7% higher than in the U.S.
“And companies have significant tax advantages to be here,” he adds. “The corporate tax rate is one-third lower than the U.S., so there are many reasons to do business in Canada. But we need a national policy framework.”
The union’s 10-step strategy proposal calls for the federal government to:
- Implement an integrated national auto policy.
- Negotiate Canadian manufacturing footprint commitments.
- Establish a consistent and transparent auto investment program.
- Encourage public minority equity shares in OEMs.
- Investigate the possibility of building a Canadian OEM.
- Rethink automotive trade policy.
- Take actions to reduce the Canadian dollar.
- Build a green auto industry.
- Launch a “Buy-Canadian” vehicle-procurement strategy.
- Invest in human and physical infrastructure.
Lewenza admits “some of the proposals seem like they are coming out of left field,” but says “every one has been tried” by other governments in the past.
The CAW says it will visit eight Canadian cities over the next few weeks to outline its proposals to business and community leaders.
