The CAW's Response to the Auto Crisis
November 21, 2008, 4:47 PM EST
The CAW is urging Canadian governments and the auto industry to develop a plan that addresses the structural problems of the auto industry and which provides a long-term solution.
In the short-term the federal and Ontario governments must also demonstrate their willingness to be part of a continental solution that helps the industry survive the current crisis and put it on stable footing for the future. Canadian governments in return for a proportional contribution would receive a proportional share of investments and jobs.
At the same time, a comprehensive plan must be developed to put the North American industry on a solid foundation, including creation of a North American auto pact.
"The financial meltdown and credit freeze are responsible for a situation where the financial industry has stopped lending to not only car purchasers, but also to auto dealers, part makers and auto manufacturers," said CAW President Ken Lewenza.
Offshore imports will take 30 per cent of the North American market this year, the highest ever. While other countries have worked hard to support their domestic auto industries with all kinds of measures the same isn't true here, Lewenza said.
"The Canadian government has provided $100 billion in support for banks, but it also needs to support the real economy," Lewenza said.
"Hundreds of thousands of jobs in Canada depend on a vibrant domestic auto industry," he said. It's important to note that Canadian labour is a strength within our industry providing skills, productivity and quality that are internationally recognized, he said.
CAW labour costs equal seven per cent of the cost of a vehicle, an amount that is less than the dealer margin. At the current value of the Canadian dollar (82 cents U.S.) CAW labour is cheaper than auto labour in the U.S., Germany and Japan.
"We were also proactive with our 2008 auto bargaining," Lewenza said. "Our contracts will save $300 million per year once fully implemented."