GM packing its bags in Oshawa

[Zeitgeist]

23 minutes ago, bush_cheney2004 said:

 

Go for it....GM doesn't care.   The past is the past, and GM is worried about the future.   Oshawa accounts for only 6% of Canadian automotive manufacturing, making vehicles that even Canadians don't want to buy.   Other plants will survive or close based on prevailing conditions, not some sentimental obligation to Canadian taxpayers and poor choices made by the governments in power.

What is so special about this single plant ?    Is Oshawa a northern paradise ?

 

 

The best idea I read so far and very consistent with Trudeau/Liberal Party priorities is to retool for a massive cannabis grow op in the abandoned Oshawa plant.  Plenty of power for lighting !!

The big U.S. automotive milk cow for Canada and Mexico has changed forever....better roll with the punches.

 

Oh really?  So you want the US to be protectionist towards Canada but Canada should be s free market for the US?  Real fair play...

[bush_cheney2004]

1 minute ago, Zeitgeist said:

Oh really?  So you want the US to be protectionist towards Canada but Canada should be s free market for the US?  Real fair play...

 

No...I don't care what Canada does....but massive dependence on U.S. exports and foreign direct investment has again come back to bite Canada in the ass.

Still waiting for that Canadian owned auto/truck assembly plant to be built in the USA.

[Zeitgeist]

6 minutes ago, bush_cheney2004 said:

 

No...I don't care what Canada does....but massive dependence on U.S. exports and foreign direct investment has again come back to bite Canada in the ass.

Still waiting for that Canadian owned auto/truck assembly plant to be built in the USA.

US based companies keep buying out our companies once they get to a certain size. That’s the story for much of our aircraft industry as well. 

[bush_cheney2004]

Just now, Zeitgeist said:

US based companies keep buying out our companies once they get to a certain size. That’s the story for much of our aircraft industry as well. 

 

...and Canadian companies buy smaller U.S. firms as well (e.g. LearJet, railroads, pipelines).

I'm watching the Unifor workers go though the same predictable phases of grief, while others have accepted reality and plan to move on with their lives in an economy with very low unemployment.   Nobody in Ontario is crying the blues for Albertans and the oil sector.

The plant has no product past 2019....what is GM supposed to do ?    What makes Oshawa so damn special ?

 

[Machjo]

12 hours ago, turningrite said:

The timing could hardly be worse, with Christmas only a month away. But the optics are even worse when considering the Trudeau government's recent and supposedly successful NAFTA (um, USMCA) renegotiation and Morneau's corporate tax cuts of last week. What's left of Canada's manufacturing sector, which once produced solid middle class jobs, is simply evaporating and it looks like there's nothing the government can or will do to stop it. Trudeau's pompous twaddle about sustaining the middle class and those "working hard to join it" surely must ring hallow for more people each day. When listening yesterday to the news about the closure of the Oshawa plant, I thought back to statements made by labour leaders a few short weeks ago about what a good deal the USMCA was/is. It appears their optimism was little more than wishful thinking.

Would the last person to hold an ordinary middle class job in the private sector in this country please shut the lights off before shutting the door on your way out. The rest of us can't afford to pay to keep them on.

It's time to explore our advantages. Raising carbon taxes will logically reduce motor-vehicle production. How could the government not have anticipated this?

That being said, what are our advantages? If the carbon tax were revenue neutral, then we could argue that while the automotive industry might experience decline, other less fuel-dependent industries could benefit from the tax reduction to compensate. Unfortunately, the carbon tax was not revenue neutral, but an overall tax increase. In other words, we made it harder for the auto industry to grow without making it easier for other industries to take its place.

Edited November 27, 2018 by Machjo

[bush_cheney2004]

28 minutes ago, Machjo said:

It's time to explore out advantages. Raising carbon taxes will logically reduce motor-vehicle production. How could the government not have anticipated this.

That being said, what are our advantages? If the carbon tax were revenue neutral, then we could argue that while the automotive industry might experience decline, other less fuel-dependent industries could benefit from the tax reduction to compensate. Unfortunately, the carbon tax was not revenue neutral, but an overall tax increase. In other words, we made it harder for the auto industry to grow without making it easier for other industries to take its place.

 

This is the first sensible (less emotional) thing I have read on this matter.   Trudeau imposes a carbon tax on top of the damage that Liberals did in Ontario and now they are SURPRISED that the Oshawa plant is shutting down ?   Their policies are beyond stupid if a different outcome was expected.

Edited November 27, 2018 by bush_cheney2004

[bush_cheney2004]

I just listened to Oshawa mayor John Henry on CTV...he was more interested in the long history of the Oshawa plant than present day reality.

The mayor's voice and plaintiff wailing reminded me a lot of Rick Moranis as Louis Tully in Ghostbusters (1984).

[Machjo]

16 minutes ago, bush_cheney2004 said:

 

This is the first sensible (less emotional) thing I have read on this matter.   Trudeau imposes a carbon tax on top of the damage that Liberals did in Ontario and now they are SURPRISED that the Oshawa plant is shutting down ?   Their policies are beyond stupid if a different outcome was expected.

Some jurisdictions do have heavy carbon taxes. Hong Kong's for example makes Canada's seem mild in comparison. Same with Singapore's.

The difference though is that taken overall, they overall tax bases are still very low. If a government cranks up taxes like crazy in one area while still ensuring that taxes are low overall, then while industries affected by the tax might suffer, at least other industries could take its place. Unfortunately, this is not what is happening in Canada. When I'd visited Hong Kong a few years ago, people seemed unfazed by its high carbon taxes. But then again, they're a low-tax jurisdiction anyway. If Canada wants to raise carbon taxes, maybe look at countries that have implemented it successfully.

[bush_cheney2004]

2 minutes ago, Machjo said:

.... If Canada wants to raise carbon taxes, maybe look at countries that have implemented it successfully.

 

....and be mindful of the fact that the bean counters at GM (and other manufacturers) are already spooked by high energy and labour costs in Ontariario.

This plant closing dance has been going on for years....yet they still are acting like it was a bolt out of the sky.

[Machjo]

15 minutes ago, bush_cheney2004 said:

 

....and be mindful of the fact that the bean counters at GM (and other manufacturers) are already spooked by high energy and labour costs in Ontariario.

This plant closing dance has been going on for years....yet they still are acting like it was a bolt out of the sky.

And the government has to make a choice. Let's look at it logically. The point of raising carbon taxes is to deter the consumption of carbon. Consequently, this will undermine the purchase of personal vehicles. The government could decide to subsidize the car manufacturers to compensate for the carbon tax, but then that would be a case of the right hand not knowing what the left hand is doing.We'd then be paying more for gas but less for cars, so the same in the end, which would thus totally undermine the whole point of a carbon tax. In other words, if we intend to subsidize the car industry, then we might as well just eliminate the carbon tax as a failure. If the government sincerely believes that we need a carbon tax to protect the environment, then it should follow through with its consequences (because that's the point of it). A carbon tax will hurt certain industries, yet for it to accomplish its stated goal, the government must let that tax do its work and not undermine it. That means that to maintain policy consistency, the government should let the businesses suffer the consequences of the carbon tax but lower other taxes instead so as to allow other less polluting businesses to grow. Like it or not, this will mean economic restructuring. How can it not be? After all, we'd be re-calibrating taxes, which like it or not must lead to a re-calibration of the economy. If the goal is to re-calibrate the economy, then this is the growing pain we must accept. Otherwise, if we introduce a subsidy to undermine the tax shift, then why tax shift in the first place?

Edited November 27, 2018 by Machjo

[taxme]

14 hours ago, Zeitgeist said:

This closure is a slap in the face for sure, especially given the previous GM plant closure and all of the past bailouts.  It's devastating news for Oshawa.  I think of the locals in Oshawa who buy GM vehicles and all of the infrastructure investments over the years.  If a production facility of some kind doesn't replace this plant, as everyone hopes, there should be a massive, Canada-wide boycott of GM vehicles.  This is important given the number of autos Canada imports from the US and the fact that auto sales in Canada were up over 13 percent.  We have the clout of our wallets.

Good luck if you think that boycotting the purchase of GM vehicles will work because there is no doubt in my mind that most Canadians will not be all that concerned about GM leaving town or the loss of jobs.. When was the last time you saw Canadians uniting together over anything? Canadians do have the clout but they refuse to use that clout to help other Canadians out. Just saying.  

[taxme]

14 hours ago, capricorn said:

Dream on. GM is restructuring and the cost of doing business in Canada/Ontario is too high. No number of boycotts will change their plans. Expect more GM plants to close.

Too much taxes and too many rules and regulations is what is killing jobs in Canada today. Capitalism works, socialism does not work. It's a wonder that the Canadian liberal media has not blamed Trump for this yet. 

[taxme]

14 hours ago, bush_cheney2004 said:

 

Of course....Michigan and Ohio too...so what ?   My area lost a 90 year old Ford truck assembly plant some years ago....it is being redeveloped into a light industrial park.

GM has shed 30,000+  jobs in Ontario before this, but now it is serious because the last 2500 in Oshawa are going too ?   Where was the big bad boycott back then ?

Still waiting for a Canadian owned car make to build an assembly plant in the USA.

That is a good one. The Canadian car builder would probably be getting their cars built in Mexico and shipped thru America too Canada. Probably a lot cheaper in the end. 

[bush_cheney2004]

1 minute ago, taxme said:

That is a good one. The Canadian car builder would probably be getting their cars built in Mexico and shipped thru America too Canada. Probably a lot cheaper in the end. 

 

True.....the Unifor crybabies are already talking about retooling the plant with yet another foreign owner...no consideration at all for a domestically owned product.   It must be a permanent mindset....build foreign cars for export to other nations.

[taxme]

3 hours ago, bush_cheney2004 said:

I just listened to Oshawa mayor John Henry on CTV...he was more interested in the long history of the Oshawa plant than present day reality.

The mayor's voice and plaintiff wailing reminded me a lot of Rick Moranis as Louis Tully in Ghostbusters (1984).

Does anyone here thinks that the Mayor of Oshawa really gives a dam about GM leaving town or of the lost jobs? Him and his council of no producers have a job so why should they care. He is probably one of the reasons why GM is leaving town. Our politicians are not real business man at all. They are just a bunch of liberal socialist hacks who believe that high taxes, carbon taxes, and more rules and regulations on the auto sector and everything else is the answer to creating more jobs. This country could be just as great as America if it were not for our stunned liberal socialist politicians who appear to try everything in their power to stop the creation of new jobs. They like to keep telling us that more immigration will create new jobs. Such bull chit. 

[Machjo]

8 hours ago, bush_cheney2004 said:

 

True.....the Unifor crybabies are already talking about retooling the plant with yet another foreign owner...no consideration at all for a domestically owned product.   It must be a permanent mindset....build foreign cars for export to other nations.

Canada should introduce right-to-work legislation.

[Shady]

18 hours ago, Zeitgeist said:

We don’t need to hear more anti-labour alt right script. Production costs are no higher in Canada when you factor in the exchange rates, lower health care costs, and higher productivity of operations. If you don’t have solutions to protect good jobs and families, your comments have zero value.  You fuel anti-American sentiment then complain about anti-Americanism. 

Pointing out the negative effects of high labour costs, high regulatory burden, and high taxes isn't so-called alt-right.  This nonsense has to stop.

[turningrite]

21 minutes ago, Truth Detector said:

Pointing out the negative effects of high labour costs, high regulatory burden, and high taxes isn't so-called alt-right.  This nonsense has to stop.

The problem with the dogmatic right's critique is that it too often fails to take into account the fact that "free" trade fundamentally and in most cases practically functions as an explicit form of wage arbitrage. Workers in Western countries simply can't survive at the wage levels paid in the developing world, no matter how productive they are or what regulatory environment (over which workers have no control in any case) their employers face. Corporate globalization is designed to provide investors with access to Western consumer markets while offloading wage costs. At some point, logically, the system tips toward negative outcomes when once well-paid workers simply lose their ability to consume even the supposedly cheaper (and often inferior, if truth be told) products that are available. Free trade theoretically generates a form of virtuous feedback loop whereby growing middle classes in developing countries can buy Western-produced high value products. But the global system (i.e. WTO) has permitted developing countries to protect their own domestic markets, thus negating the potential feedback benefits. The "free" trade system that's emerged under globalism is at fault here because it's based on an unsustainable model. The real nonsense lies in pretending this isn't the case and the absurdity of the situation is compounded by blaming Western workers for their plight.

Edited November 27, 2018 by turningrite

[Shady]

5 minutes ago, turningrite said:

The problem with the dogmatic right's critique is that it too often fails to take into account the fact that "free" trade fundamentally and in most cases practically functions as an explicit form of wage arbitrage. Workers in Western countries simply can't survive at the wage levels paid in the developing world, no matter how productive they are or what regulatory environment (over which workers have no control in any case) their employers face. Corporate globalization is designed to provide investors with access to Western consumer markets while offloading wage costs. At some point, logically, the system tips toward negative outcomes when once well-paid workers simply lose their ability to consume even the supposedly cheaper (and often inferior, if truth be told) products that are available. Free trade theoretically generates a form of virtuous feedback loop whereby growing middle classes in developing countries can buy Western-produced high value products. But the global system (i.e. WTO) has permitted developing countries to protect their own domestic markets, thus negating the potential feedback benefits. The "free" trade system that's emerged under globalism is at fault here because it's based on an unsustainable model. The real nonsense lies in pretending this isn't the case and the absurdity of the situation is compounded by blaming Western workers for their plight.

I'm not blaming the workers, I'm blaming the governments for the regulatory burden and the tax burden.

[Machjo]

26 minutes ago, turningrite said:

The problem with the dogmatic right's critique is that it too often fails to take into account the fact that "free" trade fundamentally and in most cases practically functions as an explicit form of wage arbitrage. Workers in Western countries simply can't survive at the wage levels paid in the developing world, no matter how productive they are or what regulatory environment (over which workers have no control in any case) their employers face. Corporate globalization is designed to provide investors with access to Western consumer markets while offloading wage costs. At some point, logically, the system tips toward negative outcomes when once well-paid workers simply lose their ability to consume even the supposedly cheaper (and often inferior, if truth be told) products that are available. Free trade theoretically generates a form of virtuous feedback loop whereby growing middle classes in developing countries can buy Western-produced high value products. But the global system (i.e. WTO) has permitted developing countries to protect their own domestic markets, thus negating the potential feedback benefits. The "free" trade system that's emerged under globalism is at fault here because it's based on an unsustainable model. The real nonsense lies in pretending this isn't the case and the absurdity of the situation is compounded by blaming Western workers for their plight.

I don't necessarily identify as 'right' and, if anything, even sympathize with the plight of the left. However, Hong Kong is a thriving free-trading high-wage economy. And it has almost no natural resources to speak of to boot. how did that happen?

 

Oh yes, and finally, Hong Kong has a 100% gas tax and it's still doing better than Canada. How do you reconcile all of that?

 

Oh yes, and on the human-rights front, it respects its Basic Law wich enforces the International Covenant on Civil and Political Rights. Even the Canadian Charter of Rights and Freedoms fails to meet that standard due to the separate denominational schools discriminating on the basis of religion. Go figure.

Edited November 27, 2018 by Machjo

[turningrite]

1 hour ago, Machjo said:

I don't necessarily identify as 'right' and, if anything, even sympathize with the plight of the left. However, Hong Kong is a thriving free-trading high-wage economy. And it has almost no natural resources to speak of to boot. how did that happen?

Oh yes, and finally, Hong Kong has a 100% gas tax and it's still doing better than Canada. How do you reconcile all of that?

Oh yes, and on the human-rights front, it respects its Basic Law wich enforces the International Covenant on Civil and Political Rights. Even the Canadian Charter of Rights and Freedoms fails to meet that standard due to the separate denominational schools discriminating on the basis of religion. Go figure.

Hong Kong's economic situation is unique in that it functions as an entrepot into the massive Chinese market and it has massively prospered as that market has expanded over the past generation. You realize, though, that about one-third of Hong Kong's people reside in subsidized housing of one sort or another, right? The local government recognizes the impact of the high-priced housing market and helps to promote continued productivity and access to reliable and affordable labour by ensuring that its workers are, at the very least, adequately housed. Canada and most other Western counties are in this respect far less interventionist than is Kong Kong.

Further, China's increasing control over Hong Kong is undermining the human rights advantage(s) the former British colony's residents have long enjoyed. Many observers wonder whether Hong Kong's attractiveness as a business destination can be maintained as this situation develops further.

Edited November 27, 2018 by turningrite

[turningrite]

1 hour ago, Truth Detector said:

I'm not blaming the workers, I'm blaming the governments for the regulatory burden and the tax burden.

Much of the regulatory burden imposed throughout the West relates to ensuring compliance with adequate environmental and safety standards. It seems odd to tout the benefits of relieving businesses from this burden when the consequences, including environmental degradation, are so apparent in places where the burden is less onerous. Another thing to consider is the application of differential regulatory standards (so called "non-tariff" barriers) in some of the countries to which we've heavily exported manufacturing jobs. There is little reciprocity in many cases and yet manufacturing has continued to be offshored despite the onerous barriers erected elsewhere. As for taxation, there's almost no relationship between corporate taxation and the loss of manufacturing capacity in Western economies. The wage arbitrage effect is so pronounced that even bringing taxes down to zero would be unlikely to counteract it in most cases. Western countries have basically competed with each other's tax rates in an effort to grab whatever crumbs remain where the manufacturing sector is concerned but the hollowing out effect of corporate globalization has continued apace nevertheless.

[cannuck]

20 hours ago, Argus said:

It's more about this.

Wall Street has embraced the idea that companies exist solely to serve the holders of their stock. Under this way of thinking, managers of companies should focus their actions on driving short-term value for their shareholders, and should pay far less (or no) regard to other constituents who may have a stake in the business, such as employees, customers, or members of the community. Shaich partly blames activist hedge funds, many of which buy shares in companies with the aim of pushing their management to make decisions that drive their stock prices up within a few months. According to Shaich, this makes it more difficult to invest in long-term projects, and create sustainable jobs.

https://www.newyorker.com/business/currency/the-founder-of-panera-bread-explains-the-economic-forces-that-led-to-trump

You are now getting closer to the truth.  This is NOT a GM problem, it is a worldwide problem.  Companies are no longer owned by manufacturers, entrepreneurs, etc., they belong to finance  businesses who hold and manipulate large blocks of stock - not for the purpose of producing a better product and reaping the profits gained, but to move the share price - since they are speculators, not (or seldom) investors.  Problem is: governance is changed to have finance friendly boards, who in turn hire finance friendly officers - all of whom will rob real shareholders blind with the ridiculous compensation packages.   Boards and "shareholders" don't care because they are only speculators, not investors.  You could pay the janitor billions and nobody cares because there are no real owners to be seen, only those who are there just for the speculative gain/game.

Solution is simple:  stop giving speculative gain a free ride on the tax system - since it creates no wealth - worse yet is solely inflationary when it does its thing.  Tax the living crap out of anything that does not create wealth and stop beating the golden goose of actual work and industry to death.

[Machjo]

56 minutes ago, turningrite said:

Hong Kong's economic situation is unique in that it functions as an entrepot into the massive Chinese market and it has massively prospered as that market has expanded over the past generation. You realize, though, that about one-third of Hong Kong's people reside in subsidized housing of one sort or another, right? The local government recognizes the impact of the high-priced housing market and helps to promote continued productivity and access to reliable and affordable labour by ensuring that its workers are, at the very least, adequately housed. Canada and most other Western counties are in this respect far less interventionist than is Kong Kong.

Further, China's increasing control over Hong Kong is undermining the human rights advantage(s) the former British colony's residents have long enjoyed. Many observers wonder whether Hong Kong's attractiveness as a business destination can be maintained as this situation develops further.

In some respects, we can consider Hong Kong less capitalist and more corporatist. So yes, Hong Kong does take care of its poor. However, its social services are very much of the no-frills-no-gimmicks kind and realistic too. Instead of trying to save dying industries, they focus more on retraining the poor for the growing industries. It might mean a more rapidly changing economy but a more robust one too.

[turningrite]

1 hour ago, Machjo said:

In some respects, we can consider Hong Kong less capitalist and more corporatist. So yes, Hong Kong does take care of its poor. However, its social services are very much of the no-frills-no-gimmicks kind and realistic too. Instead of trying to save dying industries, they focus more on retraining the poor for the growing industries. It might mean a more rapidly changing economy but a more robust one too.

Retraining older workers hasn't had a great track record as a solution to economic dislocation resulting from globalization and technological change. Most workers who lose a middle-income level job when they're older than 50 will never land another job with a similar income, if they're able to find employment at all. Hong Kong houses much of its working class and not merely its poor in subsidized housing and that may have to become to model in the West for those who are dispossessed by government-promoted restructuring and globalization. Creating a population and workforce that's resilient and adaptable entails ensuring that basic needs will always be met. Otherwise, people will simply try to hold onto whatever economic resources, including jobs, they're accustomed to having and will resist and rebel if their needs are ignored. But other big changes will be required as well, including massively reducing immigration. As the economist Milton Friedman noted, a comprehensive social support system is not sustainable or practical alongside a policy of open borders and large-scale immigration.

Don't get me wrong here because I'm not actually a fan of the subsidy model but corporate globalization may be setting it up as the only alternative to chaos. I shudder to think what our progressive social engineers will do if expanding the subsidy model becomes the only viable option. We're seeing some of it under JT and I can only imagine the mess we'll face if his party or any other promoting similar policies maintains power over the short to medium term.

Edited November 27, 2018 by turningrite