Topic: Feds order CAW to cut GM labour costs

[toolatecrew]

http://www.canada.com/business/fp/ordered+labour+costs+Lewenza/1573629/story.html

The federal government has given the Canadian auto workers an ultimatum to bring down the labour costs of its workers at General Motors Corp. to the level of Toyota Motor Corp.’s assembly factories in the country or GM’s Canadian operations will be liquidated, the union said Thursday.

Very interesting but not unexpected. Despite the fact that CAW and GM Canada reached a deal earlier spokespersons for Ford and Chrysler said it was not mearly enough. Industry anyalyts said it wasn't enough and I personally was shocked that they didn't get deeper cuts (less than half why Chrysler got)

Usually I'm agaionst government intervention in this type of thing but in this case the Goovernment is a stakholder/owner in this company. They are providing the funding to keep the company running and therefore have a vested interest in seeing the company be profitable and their investment retunred. The Government alos has an ownership stake in Chrysler.

If I owned 2 companies and labour agreed to give a $19 an hour cut in costs to company A I'd sure as hell expect company B to get the same deal.

I wonder where Ford will land in all this. I'd guess they would expect an equivilant deal to the "best" deal out there so as not to have any of their competion have an unfair advantage.

[Patate]

no, the government isn't a stakholder of GM Canada.  They lended money, they haven't bought shares of it.

And even if they were, a work contract is a work contract.  The governement has no business saying things like that. What we see here is yet another way for the Conservative party to try to destroy the middle class's wages and the unions.  That doesn't really surprise me, coming from that retarded government. 

What company is Harper pleasing by doing this? from whom has he recieved an envelope full of cash?

This administration is destroying everything the labor movement has done in the past 50 years.  If only my province hadn't been scared by the Feds propaganda 13 years ago, I would have been happy of seeing how Canada is becoming a shithole.  I feel bad for the Ontario workers who see their province getting poorer and poorer because some redneck from the West has no idea how to run a country with industries, and not just oil fields.

[toolatecrew]

They don't have a formal ownership stake YET.

They do in Chrysler. Its only a matter fo time with GM. The Canadian government has followed step for step with what has been done in the US.

Its mostly symantics anyways. If you make loans that have a very low likleyhood of ever being rapaid what do you call it? In Chrysler's case it wasn't the Government that foced the Wage cut deal with CAW it was Fiat with their threat that operations would be pulled from Canada.

For the record I was against bailing out Chrysler in Canada. I'm against bailing out GM in Canada. But if the Government of Canada is commited to GIVING (that's what it is when there is low to little likleyhood of the loans being repaid) Billions to a company then they should have the ability to dicate some terms.

The Giovernment has as much "business" dictating wage negotiations as it does giving Billions to some compaines while giving nothing new to others.

[Patate]

They don't have a formal ownership stake YET.

They do in Chrysler. Its only a matter fo time with GM. The Canadian government has followed step for step with what has been done in the US.

Its mostly symantics anyways. If you make loans that have a very low likleyhood of ever being rapaid what do you call it? In Chrysler's case it wasn't the Government that foced the Wage cut deal with CAW it was Fiat with their threat that operations would be pulled from Canada.

For the record I was against bailing out Chrysler in Canada. I'm against bailing out GM in Canada. But if the Government of Canada is commited to GIVING (that's what it is when there is low to little likleyhood of the loans being repaid) Billions to a company then they should have the ability to dicate some terms.

The Giovernment has as much "business" dictating wage negotiations as it does giving Billions to some compaines while giving nothing new to others.

It is an high risk LOAN.  Some used car dealers are giving loans to people who have low chances of repaying them, are you saying they're GIVING them money?

[dorin]

It is an high risk LOAN.  Some used car dealers are giving loans to people who have low chances of repaying them, are you saying they're GIVING them money?

Yes, in that example the used car dealers are effectively giving those people money and they are also bad/stupid businesspeople for doing so.  Sad but true.

[Patate]

It is an high risk LOAN.  Some used car dealers are giving loans to people who have low chances of repaying them, are you saying they're GIVING them money?

Yes, in that example the used car dealers are effectively giving those people money and they are also bad/stupid businesspeople for doing so.  Sad but true.

There is a market in lending money to sub-prime customers.  Therefore, it isn't as bad as you might think.

[toolatecrew]

They don't have a formal ownership stake YET.

They do in Chrysler. Its only a matter fo time with GM. The Canadian government has followed step for step with what has been done in the US.

Its mostly symantics anyways. If you make loans that have a very low likleyhood of ever being rapaid what do you call it? In Chrysler's case it wasn't the Government that foced the Wage cut deal with CAW it was Fiat with their threat that operations would be pulled from Canada.

For the record I was against bailing out Chrysler in Canada. I'm against bailing out GM in Canada. But if the Government of Canada is commited to GIVING (that's what it is when there is low to little likleyhood of the loans being repaid) Billions to a company then they should have the ability to dicate some terms.

The Giovernment has as much "business" dictating wage negotiations as it does giving Billions to some compaines while giving nothing new to others.

It is an high risk LOAN.  Some used car dealers are giving loans to people who have low chances of repaying them, are you saying they're GIVING them money?

Didn't realize that giving a high intrest loan secured against an asset you can reposses was the same as giving a low interst loan to someone who is about to file for bankruptcy and doesn't have enough assets to cover their current debts let alone a new one.

Even a used car dealer wouldn't give a loan to someone who told them I'm filing for bankruptcy tomorrow.

NEW YORK (CNNMoney.com) -- Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing

http://money.cnn.com/2009/05/05/news/companies/chrysler_loans/?postversion=2009050517

The Canadian government also agreed to kick in about $900 million in bankruptcy financing. According to the filings, Chrysler's advisor assumes that this loan will be forgiven as well.

No used car dealer in the world will give you a loan with the certainty they will simply write off the loan. Business can't survive that way.

[Cord]

There is a market in lending money to sub-prime customers.  Therefore, it isn't as bad as you might think.

There was a market. The auto sub-prime finance market has all but disappeared. It will probably return but for now it's finished.

[toolatecrew]

Its a terrible analogy anyways and proves nothing. The two situations Auto Subprime lending and Government providing low interest loans to company going into chapter 11 that they KNOW will never be repaid are not remotley the same.

[Patate]

Its a terrible analogy anyways and proves nothing. The two situations Auto Subprime lending and Government providing low interest loans to company going into chapter 11 that they KNOW will never be repaid are not remotley the same.

Thy probably calculated that sending money to a company that pays Canadians to work, and suppliers to supply (no , I know) is better than having hundreds of thousands Canadian workers going to ask the governement for money to survive.  The bailouts are nothing compared to what Ontario would look like without the Big 3.

The bailout was money to prepare the Big 3 for a strategic bankruptcy: when emerging, they will pay enough taxes to repay the money.  Anyway, the Big 3 has been paying taxes and making Canadian works for nearly a century now, a bailout is the least the Canadian governement can do.  The Big 3 has been paying taxes to the Feds, who after that sent that money to the poor provinces (Quebec being one, and the Atlantic provinces being the worst).  Those companies have been part of the Canadian economy for so long, supporting so many retirees and Canadian workers, no one can expect the Japanese plants to replace them.


I was initially against the bailout idea, but then I realized some time had to be bought in order to make sure the bankruptcy Chrysler filled and GM will fill, will be fast.  The US governement judged that Chrysler was ready for it in May 1st, and GM will be ready for it in June 1st, or you may consider Chrysler's C11 a test, to make sure a huge part of the economy (GM) doesn't die in bankruptcy.  Either way, the Canadian governement has nothing interesting to suggest, no opinion or whatever.. they simply follow Obama's administration and try to kill the CAW in the meantime.

[toolatecrew]

Its not preparing the BIG 3 for Bankruptcy. Its for GM and Chrysler.

Ford isn't getting a bailout and Ford isn't going bankrupt (not right now at least). Ford has been here. Ford has paid taxes. Why isn't the government handing ford a few billipon that they don't expect to be repaid right now? The only possible answer is that "we only GIVE money" (and thats what it is GIVING money ) to people who screw up so badley they can't survive without it. " How uinfair is that?

The reduction in benifits (wages are not being cut) is nothing more than a market adjustemnt. Its happening in the US and its happening here. Wages and benifits at the CAW and UAW were higher than the MARKET could bear. Too many workers not enough work. Under normal circumstances the market would lower wage/benifits costs when times are bad and they go up when times are good. Union contracts prevent downward adjustments. Those wages and benifits would have been downward adjusted SOMEDAY. The fact that the UAW adjusted their costs down and that they are in competion for jobs forced CAW to make an adjustment.

Ford has been here. They have contributed Billions in taxes. When will the Government be giving them the gift of billins that don't need to be repaid so they never get to the ppoint that GM and Chrysler are in?