Big Three Rescue

There seems to be a good deal of confusion whether the proposed “bailout” of the Big Three North American auto-makers is a good thing or not. Those in favour generally suggest that the economic impact and potential job loss make the loss of the auto-makers unthinkable.Those opposed seem to be of the opinion that they got themselves into this mess and shouldn't be allowed any special treatment because they didn't build the vehicles people wanted in the first place. A subgroup is intent on Union bashing, and claims the labour costs are too high and the unionised workers don't deserve the pensions that they bargained.

It is clear that any major failure in the North American auto sector would have a catastrophic impact on employment in central Canada, in particular, Southern Ontario. Automobile manufacturing is a base level industry that provides at least seven spin off jobs for every direct job created. It is estimated that if this industry fails, it could result in the direct loss of 288,000 jobs in this country. Further, the retail sector would be crippled overnight. It is not difficult to foresee stagnation in the construction industry, (recall the situation in Calgary after the last bust in the oil patch). The loss of tax base to municipalities, increased social welfare and Employment Insurance costs would clearly preoccupy all levels of government. We have some idea of the sort of pain that the loss of manufacturing can bring by studying the aftermath of General Motors closure of its plants in Flint Michigan. It should not be a scenario we would wish to see repeated on a wider scale across North America.It is clear that serious errors were made in terms of long range planning by the management of the Big Three. However, under our system as it is currently structured, management's function is to maximize the profit for the shareholders. There is little or no incentive to look forward in any great detail to try and head off any perceived problems. Management is rewarded for immediate results. Caution is not rewarded, and at best due diligence receives only lip service.

As to the argument that they never built the type of vehicle people wanted, one only has to look at what people are driving on the highways in our country. Pickup trucks, vans and SUV's abound. They built what people wanted. They didn't anticipate how rapidly the market would change, almost no one did.

Those who blame the labour and pension costs are chosing to attack the group that has the least influence on the source or outcome of the problem. They would like to see the wages in the order of fourteen dollars an hour. If that becomes the case, then it stands to reason that all wages across the board should be adjusted. To what level would we rolled back minimum wage. Perhaps we should investigate the salaried of people in the financial industry, their performance leading up to the current crisis hasn't exactly been stellar.To blame the workers for bargaining pensions, goes to the heart of what people want from our society. First, the company's should never have been allowed to under fund these plans, particularly when times were good. For people to state that pensions should not be factored into a person's working life in short sighted indeed. We have an aging population; what is society supposed to do with people who have reached the end of their working life? Everyone will be in that situation someday. Food banks and side walk sleeping arrangements ought not be a viable option in a civil society.