Tuesday, November 27, 2018

That's What You Get For Loving Me

While thinking about General Motors' announcement that it will be closing the company's Oshawa assembly plant next December, I couldn't help but wonder just how secure the remainder of Canada's manufacturing base may be.

The Oshawa closure seems worse because of the billions of dollars in bail out loans and subsidies Ottawa and Ontario lavished on GM when it was in hard times. The company could have announced that it was going to revamp Oshawa to build new electric vehicles but, sadly, that will also be "America First."

Ever since Mulroney launched Canada onto the path of neoliberal globalism, "protectionism" has had a pejorative quality. It was old thinking, anti-trade talk, backward thinking. Well, today a little protection might be nice.

We've watched as Boeing literally beat the "C-series" jetliner out of Bombardier and straight into the lap of Airbus. Now we have the Oshawa debacle. What next?

As our manufacturing base continues to decline, Ottawa seems powerless to make things right. We've got a giant and increasingly protectionist country beside us, thumbing its nose at us, and, beyond that, it's "race to the bottom" globalism. Where's the magic of neoliberalism now?

Ontario's industrial weakness can only heighten the perceived value of our petro-resources. It's a bad bet but Ottawa has left itself little choice but to double-down on what's seen as a stranded-asset-in-waiting, high-carbon bitumen. I suppose we could re-open the mine at Asbestos, Que.

With the federal government condemning Canada's labour force to a future of "job churn," are well-paid, steady manufacturing jobs soon to become a distant memory?

How do we make this new trade deal, NAFTA II, the USMCA, work for us? That came to mind while reading a CBC article on the demise of Oshawa.
The new North American trade agreement — the one that was supposed to be key to the future of Canada's automotive sector — didn't even make it to its signing ceremony before General Motors announced it soon will stop assembling cars in Oshawa, Ont. 
"The car industry now has stability and room to grow and thrive," Foreign Affairs Minister Chrystia Freeland wrote in an op-ed published just last month, describing what she called the "well-balanced outcome" of Canada's trade negotiations with Washington.
Are we really as powerless as we seem? What is our industrial policy? Do you know? "Job churn" just can't be an industrial policy. That's capitulation, pure capitulation. Can't we do better than that?

Why can't Canada have a robust, thriving aerospace industry? Little Sweden, with a population just shy of 10-million does. Volvo manufactures jet engines. SAAB designs and builds and, wait for it, sells fighter jets. In partnership with Boeing, a SAAB trainer design was chosen by the US military. That's 350-jets right there.

It's not like Canada lacks resources. It's not like we don't have a highly-educated work force. We do, on both scores. We could be energy independent if we were ever bright enough to refine the stuff we already have in-house. It looks like we've got it all. Yet something's missing as we need to sort out what that is.

There's a real discount factor when your manufacturing base, such as it may be, is heavily "branch plant" oriented. What we should have learned is that when times get tough or political expedience gets involved, the big guys have the sharpest elbows.

Canada is closing in on 40-million people. Perhaps it's time to explore what we can do with that market. This isn't about turning Canada into another 'hermit kingdom' but evaluating our options in terms of our domestic economy, industrial policy and global trade in an environment when we don't leave all of the important decisions to the vagaries of market forces.


Purple library guy said...

Nationalize it. An industrial policy needs to be multifaceted, but that's a start.

rumleyfips said...

Nobody needs to buy a GM car. Hondas, Toyotas, Hyundais etc are made and sold in Canada. Canadian consumers can make a difference if they so choose.

Anonymous said...

Besides, Ontario isn't really "open for business". Would you do business with a government that arbitrarily cancels contracts signed in good faith?



rumleyfips said...

General Motors decides the future is electric cars. Dougie cancels support for electric cars. Own goal.

crf said...

There is more auto manufacturing capacity in North America than needed to meet demand. So plants have to close. They are closing plants in the US too. There still is too much capacity, so more will close in the future.