Tuesday, November 22, 2005

GM's job cuts

General Motors announced a drastic manufacturing capacity reduction, reducing 26,000 U.S. jobs and 3,900 Canadian jobs with the automaker.

Bad as these cuts are for beleaguered American auto industry workers - since each GM manufacturing job essentially translates into 6 to 7 jobs for other auto-industry-dependent employment, including parts suppliers, vendors, and also the ripple effect of GM employees' consumer spending in their local communities - it's proportionately worse for Canada and for Ontario in particular. The per-hour compensation for Canadian workers doesn't require paying bloated amounts for private-sector health care benefits.

Worse for Canadians: In March 2005, the Government of Canada contributed $200 million of taxpayer funds towards the GM Canada's $2.5 billion Beacon Project

Among the Beacon Project's goals:
The project includes an investment in state-of-the-art equipment for an all-new Oshawa Car Assembly Plant paint facility, which will provide significant environmental benefits.

GM Canada's March 2, 2005 press release has more official information ("puffery" if you prefer) on the project.

CTV interviewed David Paterson, GM Canada's Vice President of Corporate and Environmental Affairs, and learned the following:

Indeed, Paterson said the federal and provincial governments have provided GM Canada with a "tool kit going forward that's allowing us to spend some $2.5 billion in the next three years, and that's exactly what we need to be able to get back on footing here."

Paterson is referring to the so-called Beacon project, a program of investment in Canada announced last March which will create about 1,000 jobs. [emph. added]

"We're going to spend all that money, we're going to proceed with all of that investment and, in fact, last week, we confirmed that we'll spend an additional $400 million in Oshawa and in St. Catharines on top of that $2.5 billion."

Hmmm...... let's see: serious manufacturing overcapacity??? Does anyone here know more about the contributions of Federal and provincial governments toward's GM's boondoggle - which sounds A LOT like the money GM pissed down the rathole of its financially-disastrous Saturn project. BTW, for 11 years I happily drove a Saturn - my axe to grind isn't with Saturn cars (at least the original designs) but with GM's horrifying negative return on the Saturn project.

Does anyone care to comment?