In effort to appease the ALLDERBLOB, GM to cut 25,000 North American jobs: But is it enough?

The big news in the business pages is how General Junk Bonds (a.k.a. the scourge of L.A. Transit) will be laying off 25,000 workers in an attempt to make its stockholders happy.

The Toronto Star devoted its mainstage editorial to the story today, repeating the line about how “one in seven” Ontario jobs are “directly or indirectly dependent on the auto industry.”

Question: if I live in a suburb where it takes me 35 minutes to walk the twisting streets and cross two major “carterials” to reach somewhere to buy a carton of milk, does that mean the guy who sells me the carton of milk has a job “directly or indirectly dependent on the auto industry?” If so, maybe “one in seven” is an understatement.

But if, like the ALLDERBLOB, you see the illogic in that premise, maybe “one in seven” is a gross overestimate.

The fact is, it’s past time for Canada to reduce its dependency on the auto industry. It’s time for folks in suburbs to challenge the zoning that disallows corner stores within sane walking distance. It’s time for the chainstores to recognize that smaller is better, and having a smaller “shoe” (i.e. not a two-ton “boot”) to accomplish our basic needs is only a starting place for creating a smaller ecological footprint.

When will we see this advocated in a Toronto Star editorial?

Maybe when the editorialist’s salary stops being paid by ads for GM?

Jun. 9, 2005. 01:00 AM
Editorial: Province will feel automaker’s pain

Oshawa’s three General Motors assembly plants rank at the top of the North American auto industry for efficiency and productivity. Combined with Canada’s 80 cent dollar and our government-run medicare system, these advantages allow GM to produce its cars and trucks here in Ontario at a much lower cost than at its 54 plants in the United States.

But the superb reputation of our GM assembly plants and workers cannot insolate Ontario from the company’s deep-seated troubles.

As a result of the steady erosion of its market share and uncompetitive cost structure in the U.S., General Motors is sinking in a tide of red ink. In the first quarter of this year, its losses exceeded $1 billion (all figures U.S.). Where it accounted for one of every two cars sold in North America in the 1970s, and one of three in the 1990s, GM now accounts for one of every four. And for each car it sold in the first three months of this year, GM lost $2,300. For every car rolling off one of its U.S. assembly lines, GM must pay $1,500 in health-are costs alone for its U.S. workers and retirees.

Plagued as the giant automaker is by excess capacity, GM chairman and CEO Rick Wagoner announced Tuesday that the company would close an unspecified number of its plants and shed 25,000 workers by 2008 in an effort to pare its annual costs by $2.5 billion.

Although Wagoner targeted the U.S. for all of the cuts, union leaders and industry watchers here are unanimous in predicting that Canadians will share the pain. Even if our top-ranked assembly plants are spared, the fact that the North American industry is fully integrated means Canadian parts suppliers, including GM operations in St. Catharines and Windsor, will feel the effects of the cutbacks. The Canadian Auto Workers union also can expect to face intransigent company negotiators seeking concessions in coming contract talks. And regardless of Canada’s economic advantages, American political pressures will no doubt dictate that GM Canada take a hit in terms of job losses as well.

As unwelcome and unfair as these near-term impacts on Canada may be, Ontarians need to recognize that they face an even bigger issue. With one of every seven jobs in the province directly or indirectly dependent on the auto industry, we all will pay a far higher price if General Motors fails to regain its financial health and halt the loss in market share.

As for GM, it should take a closer look at its Ontario operations for answers on how to get back on the road to long-term success. Company-union co-operation on plant changes and an overall improvement in labour relations have sparked big gains in productivity and quality. Oshawa is becoming a hub for GM engineering and innovation, designing better, more efficiently produced vehicles that people will buy.

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