Phony Car War With China Gets Real In Canada

Picture courtesy UNIFOR

The United State’s phony “car war” with China may be more political rhetoric than business reality, but Canadian labor union Unifor (successor to the Canadian Auto Workers) seems prepared to switch to live ammunition. Reuters reports that Unifor is threatening a strike on Johnson Controls Inc’s plant in Whitby, Ontario in hopes shutting down the GM Oshawa plant it supplies. Unifor thinks that by hurting GM at Oshawa it will leverage pressure on JCI to change its plans to shut down the Whitby interior plant. Unfortunately a peaceful resolution is unlikely. As Reuters reported last month, JCI is transferring its entire interior supply business to a joint venture with a subsidy of GM’s main Chinese partner SAIC. GM will not fight an SAIC-related merger on behalf of Unifor, and as a result Canada can look to Australia for hints at the future of its auto industry. [Continue Reading]

Chrysler’s Canadian Breakdown

 

Southbound and Down? (Courtesy: canadianmetalworking.com)

Brampton: Southbound and Down? (Courtesy: canadianmetalworking.com)

When Chrysler Group LLC announced that it was withdrawing requests for Canadian Government aid earlier this week, my immediate reaction was to think: “there goes another piece of Canada’s auto industry.” Having just months ago watched GM close its Australian operations when it became clear the government there wouldn’t continue to subsidize the industry, it seemed clear that Chrysler would move at least one of its Canadian products to the waiting Toluca, Mexico plant. I was not alone in guessing that Windsor’s minivan plant would be on the block, but in its carefully-worded statement Chrysler indicated it would move ahead with the tool-up for a new generation of minivans there. Chrysler even committed to investing in “substantial product interventions” for Brampton’s Lx platform vehicles (300, Charger, Challenger), which are supposed to hit markets later this year.

So did FCA’s CEO Sergio Marchionne break the political math tying government support to new product investments? Not exactly. He still has plenty of room to maneuver, and lots of possible asks. And the likelihood that a Canada plant will end up losing a Chrysler plant to Mexico remains very high.

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Why The UAW’s Loss At Chattanooga Was Good For Autoworkers

A worker at VW's Chattanooga plant answers questions from the author during a plant tour in 2011. A worker at VW's Chattanooga plant answers questions from the author during a plant tour in 2011.

A worker at VW’s Chattanooga plant answers questions from the author during a plant tour in 2011.

My latest post at Bloomberg’s The Ticker blog covers the UAW’s defeat in Chattanooga… and that’s right, it was good for autoworkers. I don’t believe unions are intrinsically good or bad, but I know the UAW has nothing to offer auto workers. The deeply unfair Two Tier wage structure drives away new hires, and in Chattanooga the union was simply trying to rent-seek on what could be an important experiment in US labor relations.

Put simply, VW management and Chattanooga workers alike want a German-style works council, not the UAW. The law should allow workers to adopt works councils and other innovative representative tools (considered a major factor in the success of Germany’s auto industry), and not simply enforce a politicized union’s monopoly (which has nearly a half-century of decline in jobs and wages in this country to answer for).

A lot of people have been reacting to this news with the old trope of the South’s ingrained resistance to change, but what’s really happening is a much-needed innovation in labor relations: decoupling plant-specific worker representation from the political machines that unions like the UAW have become. The key to remaining competitive is experimenting with what is proven to work for others, not retreating into a long-faded past. If works councils wash away the UAW, workers will be far better off for it.