Skilled Trades Association, CAW Local 199 St. Catharines (General Motors Unit) | ||||||
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 CAW crisis? No way, Hargrove says By GREG KEENAN From Tuesday's Globe and Mail POSTED AT 12:00 AM EST Tuesday, Dec 28, 2004 Toronto — Buzz Hargrove has a problem, and if you stare out his office windows in suburban Toronto it soon becomes evident. Fewer and fewer of the cars and trucks whizzing by on Highway 404 bear the badges of Chrysler, Ford and General Motors — just over half of the vehicles — which means not enough of them are built by members of the union Mr. Hargrove heads, the Canadian Auto Workers. CAW membership at DaimlerChrysler Canada Inc., Ford Motor Co. of Canada Ltd. and General Motors of Canada Ltd. has declined dramatically since 1996, amid a steep drop in those companies' market share. Each has closed an assembly plant in Canada in the past two years. The union now represents just 39,000 people at the three auto makers, compared with about 54,000 in 1996. Mr. Hargrove, however, disputes the view that this is a crisis for Canada's largest industrial union. Instead, he says, the plant closings and billions of dollars in new automotive investment that flooded into the U.S. South represent a crisis for the industry in this country and for the Canadian economy, which relies more on the wealth generated by the auto sector than any other major country. "In any other country in the world, auto analysts looking at the size of the economy, the size of the industry, and having watched three assembly plants close within a 24-month period would have to agree that that's a crisis," he says. The union, on the other hand, is healthy, he insists, perhaps because he knows that the main cause for the decline in his membership is something he could do nothing about — the decline in market share at Chrysler, Ford and GM. As Mr. Hargrove ponders a new round of Big Three contract negotiations that will begin in the spring, he also knows the market share losses and ferocious competition in North America will be on the minds of those on the other side of the bargaining table. He can't do anything about it. "We're very strong in our argument that we can't solve the currency problems, the fuel problems, the fact that we don't have a product that's designed or styled properly so that people are attracted to buy it." The decline in market share at Chrysler, Ford and GM has been steady. They held 75.7 per cent of the Canadian market in 1996. As of the end of November, the latest data available, that had plunged 19.3 percentage points to 56.4 per cent. Based on average annual sales of 1.53 million in Canada over that period, each percentage point drop represents more than 15,000 vehicles. The decline in market share is similar in the United States, the destination for about 80 per cent of the vehicles assembled in Canada. So the Big Three have been cutting production, both here and in the United States, although Mr. Hargrove has argued that Canada sustained more than its share of cuts in the most recent round of closings. The problem the market share decline gives him is twofold: If it continues, the three will need to slash more assembly capacity, but even if they stop the bleeding, they won't be building new, greenfield plants any time soon. "The chance of GM, Ford and Chrysler adding assembly plant capacity in Canada is extremely low," says industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. of Richmond Hill, Ont. Mr. DesRosiers maintains that it is the unionized side of the industry in Canada that is in crisis. Employment in the vehicle assembly sector in Canada has fallen to a little more than 48,000 from 57,500 in 1996. Employment at two non-unionized plants, Honda of Canada Mfg. in Alliston, Ont., and Toyota Motor Manufacturing Canada Inc. in Cambridge, Ont., has grown to 4,300 people each from 1,600 and 1,500, respectively. "I don't know how to get around the math," Mr. DesRosiers says. Mr. Hargrove counters that recent events have improved the jobs picture at Chrysler, Ford and GM. He points to Chrysler, which will add a third shift and 900 jobs at its Brampton, Ont., assembly plant on Feb. 28, an announcement by Ford that it will invest $1-billion at its Oakville, Ont., facility and the addition of a third shift at one of GM's car plants in Oshawa, Ont., in 2002. Those jobs have not completely offset the plant closings. The new shift at Brampton simply returns employment at that Chrysler operation to where it was before a company restructuring in 2001. "It really comes down to product," says Sean McAlinden, director of the economics and business group at the Center for Automotive Research in Ann Arbor, Mich. "You just need better products out of those Canadian plants." Mr. McAlinden agrees that there's little chance of any new Big Three plants being built in Canada. Nonetheless, he thinks the strategy Mr. Hargrove used in recent negotiations makes sense. That strategy involves using bargaining and the threat of strikes as a way to lever investments out of the Big Three. Mr. Hargrove intends to continue those tactics in the talks for which he and the union are now preparing. It worked in 2002, he says, in helping land the $1-billion investment Ford will make to turn Oakville into a leading-edge, flexible manufacturing facility. "We now have a plant that's secure for 15 or 20 years because of the type of facility it is," he says. In 2005 bargaining, the union will put a priority on securing a commitment from Ford that it will turn its St. Thomas, Ont., assembly plant into a flexible operation. At Chrysler, the focus will be on landing a new facility. If any of the Big Three is going to need new capacity in North America in the next few years, it will be Chrysler, provided it can duplicate the success of its Brampton-made Chrysler 300 line and Dodge Magnum with other new vehicles. "We still keep saying that they owe us a plant in Windsor," he says. "We've twice had a commitment for a new facility and our position with Chrysler will be if there's a new facility built by DaimlerChrysler or Daimler in North America, then we're absolutely entitled to that." At GM, he wants new investments from the world's largest auto maker at an engine plant in St. Catharines, Ont., and a transmission facility in Windsor, Ont. He's not expecting the companies, as he often says, to open the vault and tell his members to stuff their pockets until they have as much as they want. But he says they have no excuse to beat up the union either. "The companies don't have an argument in terms of costs — labour costs — they don't have an argument on quality and productivity and commitment by the union to helping ensure the companies are successful." The original link to the article is here | ||||||
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