Lionel from Oshawa, Ontario writes about General Motors:
Good morning Lou,
As I listened to AM640 this morning with you talking about a GM pullout of Canada I thought that with all the various levels of governments previous incentives, could we not keep all the equipment and start our own car company? Canada Motor Company, C.M.C.
Thanks, Happy Capitalism.
Lionel
Hi Lionel,
There are a number of limitations in taking an existing plant and converting it to produce a new model. If I was thinking of doing that I would immediately call Magna International.
Building a Base
They not only build and supply parts to their clients but have assembled complete vehicles for BMW. Don’t forget that MG.A was nosing around Chrysler when Daimler was looking to off load the boat anchor. They are probably glad they missed that ride!
So if GM were to pull out of Canada I would look to Frank Stronach and his crew to be part of a solution. But keep in mind that if the governments get involved all bets are off. Just think about the fiasco that was the gun registry.
One other thing to keep in mind is that there is a Canadian auto maker called Zenn Motor Company Inc. They produce electric vehicles and own a piece of an ultra capacitor company out of the United States.
Zenn has met lots of regulatory challenges that have kept their vehicles off the highways but the concept is interesting.
Early Stage Electric Vehicles
The problem with early stage developments is that they are at risk of running out of money before they gain market acceptance. But if you are going to shovel billions into the likes of GM and Chrysler why not look at an alternative.
Happy Capitalism!
You can bet that any newly born car maker who employs some new workers will have CAW organizers camped on their doorstep to organize the workers and tell them they should get the same $$ as CAW people now get. If they offer realistic wages, say $15/hour, then most will join the union as they will be promised strike pay of more than $15 per hour. The CAW will fight any such newco tooth and claw.
Now the government in its rescue bid should say they will rescue jobs that pay, say $15/hour, but these $71 jobs (with perks) the CAW has do not qualify.
Remember, bad job can be one that pays $6.75/hour. It can also be one that pays $71/hour, as that job gives you the false impression you are worth $71/hour. It forces all the workers who get a lot less $$/hour to buy your work product which few can afford.
The blue collar workers have been wiped out by competition that made their factories close due to the $71/hour and other high wages. It used to be the freight for a car was a barrier to Korean/Japanese cars being sold here. Not any more. The new unit ships for cars ship for less, and cancel that barrier.
if wages were half what they were in CAW shops, the defect rate would drop to zero, and they would still get $35.50/hour.
I cannot comprehend the bull headed stupidity of the CAW and their inability to see they are the real problem. Management was stupid too, they gave in instead of holding an industry wide lockout to stop these UAW/CAW holdups, they just gave in, passed on the costs, and invited Japan inc right in the door.
Bill