Sunday, September 02, 2007

Jim Flaherty: The Auto Workers’ free-market friend in Ottawa

G M’s announcement last week that it will cut 1200 jobs at an Oshawa, Ontario truck plant is the latest signal that the nation’s manufacturing sector is in deep trouble.

CAW economist Jim Stanford told the Toronto Star that “economic research over the years has shown that the spinoff effects in total add up to about 7.5 jobs” for every automobile job that is eliminated. The effect, therefore, of the GM job cuts will be the loss of about eight thousand jobs in a host of companies that supply the Oshawa truck plant as well as in local restaurants, building businesses and a variety of service industries. Many of the lost jobs in the auto parts sector will be south of the border in American plants that supply the truck plant.

Manufacturing layoffs are becoming an ever more common occurrence in Ontario, as core industrial employment is cut back, and the nation’s heavy industries are hollowed out.

Because the overall economic health of the country appears relatively robust, the growing crisis in the auto sector and in manufacturing as a whole has been masked.

Since the late 1990s, about 10,000 auto assembly jobs have been lost in Canada and over the past six years, 13,000 jobs have been cut in the auto parts sector. This year in addition to the General Motors jobs cuts, Chrysler has decided to eliminate 2000 jobs in Ontario.

One might expect that Jim Flaherty, Canada’s Finance Minister, who represents the riding of Whitby-Oshawa, where many of the workers who are about to lose their livelihoods reside, would be working overtime to save auto jobs.

On the contrary, he seems philosophical, content with the stance his government is taking. He told a reporter that he was “concerned” about the GM announcement and mentioned his recent budget’s faster write-offs for capital investments in machinery and equipment for manufacturers as evidence that the government is doing a lot for the auto industry.

At a time when the effects of the rapid surge in the value of the Canadian dollar and the slowdown in US auto sales are combining to threaten thousands more auto jobs, Flaherty’s faster write offs will be about as effective as a finger in a dike during a storm surge. Everybody knows that in a slowing market faster write offs don’t generate additional capital investment.

Flaherty is, and always has been, a staunch right-wing conservative, proud of never having interfered with the celestial functioning of free markets. That’s why he can be philosophical about the loss of good jobs in his riding. “People who have been losing jobs have been getting other jobs,” he noted.

He makes it seem so easy. What alternative jobs will those who are laid off be getting and for what kind of pay? What about workers in Oshawa and Whitby who are trying to pay down their mortgages?

While Flaherty fiddles, we stand to lose a big chunk of our manufacturing sector. And we’re not likely to get it back.

It’s hard to know whether Flaherty is intelligent enough to understand that his ideological outlook favours capital at the expense of labour, or is a bone-headed true-believer who thinks free markets are socially neutral. For the auto workers in his riding, it doesn’t much matter.

Their powerful MP won’t do a damn thing for them. Flaherty and the other members of the Harper government don’t believe in the concept of an industrial strategy to nurture and protect high paying jobs in key industrial sectors.

The trouble is that although the ways they do it may have changed, the French, Germans, Italians, Swedes, Japanese and South Koreans carefully protect their vital industrial sectors. And the Americans do exactly the same thing through the backdoor route of defence spending to procure equipment from key industries, including the auto industry.

Maybe it’s time for auto workers to find an MP who isn’t a neo-con boy scout who is dumb enough to think our competitors play by the free market rules they profess and don’t follow.


ken said...

The Conservatives along with Flaherty are all for having Canada become a supplier of raw materials and energy for the US. It is thus important to develop the Tar Sands come hell or high water (more likely low water) but the loss of manufacturing jobs in Canada is of minor importance.

Bill Bell said...

OK, now what can be done about all the boneheads in Flaherty's riding who must be entirely unaware that they have elected one of their own?

the K Dawg said...

what fun, an extreme left blog. Please do tell me how I should subsidize GM and Ford shareholders with my tax dollars for your precious ``industrial strategy''! Also please tell me all about the desperate poverty and mortgage foreclosures in booming Durham region.
or maybe you want us to devalue the dollar in perpetuity?

restoration classic car said...

I love this article...very informative.thanks a lot and good luck!