The problem with cherry-picking
In today’s Ottawa Sun, Lorrie Goldstein showcases the inherent flaw of Dalton McGuinty’s economic strategy to save Ontario from continuing down the vortex of manufacturing job losses - there is no accountability.
…McGuinty said yesterday he will be giving more of our money to General Motors, which is now seeking $140 million for a new engine plant in St. Catharines and a research centre in Oshawa.
This despite the $250 million Queen’s Park has already invested in GM, which recently laid off 2,300 auto workers in Windsor and Oshawa.
That’s half the $500 million McGuinty has invested in the auto sector since 2004 through the Ontario Auto Investment Stategy (OAIS).
The premier boasts those funds led to $7 billion in new investment for Ontario, creating or protecting thousands of jobs and making the province the No. 1 auto producer in North America.
Conservative Leader John Tory and the NDP’s Howard Hampton have attacked McGuinty for failing to get job guarantees when these grants were given…
…But how good is the Ontario government, really, at sorting out the winners and losers among American, Japanese and other car manufacturers?
Goldstein suggests that we need an independent, non-partisan body to make these kinds of decisions - Someone like provincial Auditor General Jim McCarter .
I can agree to a point with this plan, but it still doesn’t address some very serious underlying issues. The auto industry is not merely threatened by poor decision-making on the manufacturer’s part regarding gas-guzzlers, etc. There is a very complex situation, involving a perfect storm of the interaction of the high Canadian dollar, high (unionized) labour costs, high provincial taxes and onerous red tape, rising power and fuel costs, a volatile U.S. market, and the unceasing influx of cheaper imports.
Based on the challenges of that set of criteria, McCarter would probably have better luck picking a winner at Woodbine, than handicapping a worthwhile choice from a field of manufacturing contestants.
I suspect what really influences Dalton’s decisions is the optics of who he’s supporting, rather than the nuts and bolts of the bottom line. He’s looking for the biggest political bang for our buck .
And that is what cherry-picking does. It woos the bigger fish at the expense of the smaller ones - and the Ontario tax-paying suckers get to subsidize the OLP in the process.
No wonder Dalton doesn’t want to listen to Flaherty. After all, It’s not really about doing something. It’s about being seen to be doing something.
May 15th, 2008 at 8:31 am
[...] has some of us singing The Blues too. This entry was written by Charles Anthony and posted on Thu May 15, 2008 at 6:06 am and [...]
May 15th, 2008 at 10:09 am
Corporate welfare is a huge problem in Canatax…Save the jobs: But who will buy the product?…Let the free markets be!
Flaherty still has it right: Reduce corporate taxes across the board…The stong will survive or ajust…The others will die; such is nature.
May 15th, 2008 at 12:18 pm
there’s the whole issues of the unions in all of this posturing by McGuinty too. He knows where his votes are.
Is there nothing to lay at the feet of the unions in all of this?
May 15th, 2008 at 2:07 pm
He knows where his votes are.
Exactly. And his pandering to the unions is causing so many of our problems here in Ontario.
O/T, has anyone had problems leaving comments or not having them show up? Thanks.
May 17th, 2008 at 2:06 am
Corporate welfare is always a bad idea but it’s especially bad when you’re talking about propping up the “Big Three” North American auto manufacturers. Don’t get me wrong… I want these companies to succeed but all that corporate welfare does is enable mediocrity. All three are stuck with lousy management and over-fed unions who continue plodding along, pretending they’re trying to save their companies but changing next to nothing. Their products are mediocre compared to other auto manufacturers and instead of leading, they follow… eventually… maybe…
Cut off the corporate welfare and the Big Three will either change or die. According to the Grope & Maul, Buzz Hargrove figures they’ll die… but he’s not loose his union’s deathgrip on their throats. sigh…
May 19th, 2008 at 4:21 am
The corp’s need welfare and the unions are lazy and overpaid. Yadda Yadda. If we think the auto mfr’s and the thousands of jobs they provide should survive by paying small wages with small benefits and pensions, then why do we want them to survive at all? What would be the point? Turn them into call centres. I don’t get it. How does the economy improve if the big 3 become more profitable or sustainable but the thousands of employees can’t earn a living wage to own a home, raise a family, have savings and consume products, etc., with the ripple effect that has on the communities in which they exist and the thousand of associated jobs and businesses.
Why do we want our manufacuring sector workers to compete with Asian manufacturers? How far should the Cdn standard of living drop in order to compete with cheap imports?
May 19th, 2008 at 3:57 pm
The Big Three have more problems than just entrenched unions pushing up their costs. Their management structure is top-heavy and brutally expensive. Their research and development no longer focuses on innovation; instead, they’re playing catch-up. As long as the government(s) continue to prop up the Big Three, there’s very little incentive for them to change.
The Asian manufacturers are building plants here in North American as quickly as the Big Three are closing them. If the Big Three collapse, the gap will be filled almost seamlessly.
May 19th, 2008 at 4:23 pm
I think the auto sector here in Canada is doomed no matter what, Mac. The corporate welfare ploy is only delaying the inevitable.
Hejhog asks what the point is of trying to keep the auto mfr’s here if they only have lower wages, but my response to that would be that it would help the spin-off industries stick around.
Eventually, the only auto-related industries left in Canada will be the non-unionized ones that service the Big Three in the States, as well as any Asian manufacturers.
That of course, is my own, very pessimistic opinion. The Big Three may survive in the States because the unions there seem a bit more flexible regarding wage negotiations, especially when it comes to new hires.
May 19th, 2008 at 4:43 pm
Corporate welfare for the Big Three means the taxpayers of Canada are paying the wages of the autoworkers who pay for Buzz Hargrove to run around the country telling anyone who will listen that full blown socialism is the only solution for Canada. Have I given you the link to his manifesto?
The auto sector isn’t doomed, Jo, the unions are and, unless the Big Three can break free from the unions, they’re doomed as well… but the Big Three are only part of the auto sector. Like I said, the Asian manufacturers are building plants here as quickly as the Big Three are closing them.
The Asian manufacturers aren’t unionized, despite the best/worst efforts of the UAW & CUAW, but their wages aren’t remarkably lower than their Big Three counterparts. The big difference is worker productivity.
There was a time when unions served the purpose of protecting workers. Unions nowadays justify their existence by pushing up wages, reducing workload and securing more benefits. How long can that go on before the companies go bankrupt… especially when the Big Three’s management structure is so screwed up?
May 19th, 2008 at 5:30 pm
Totally agree with you regarding the unions, Mac.
BTW, I’d love that link to Hargrove’s manifesto. Thanks.
May 19th, 2008 at 5:47 pm
It is difficult to debate the union issue. Their purpose and utility has changed over the years. They are responsible for Workplace Safety laws, historically, and on the other hand, some would argue as Mac does, presently. I think that people that are against unions place too much blame on them and people that are for unions don’t place enough blame on them.
My point is, that if it were not for the “good job” status of the car manufacturing jobs, we would not care about them. It is the fact of the loss of good paying jobs that is the crisis, for lack of a better word to end this sentence. I don’t understand the argument that the jobs are too “good” (too well paying etc.) because if they weren’t good jobs for the past few generations, then let them go extinct. But why can’t we have good manufacturing jobs anymore??
If one is to address this issue, I don’t think blaming the unions or crappy manaagement, while not insignificant factors, ought to be the main focus. If I’m wrong, then I’ll state it this way: Perhaps we could also think about the issue from another angle.
Do we think that manufacturing workers ought to earn a compensation package that allows them to attain a certain lifestyle which includes some of the stuff in my earlier post? How much should autoworkers make? It is easy to say they make too much. Well, how much should they make? [These are rhetorical questions] Then, once you’ve established that, can the auto manufacturers compete paying those wages you think are fair? What if the answer is no? That we cannot compete, ie our canadian manufacturers cannot be competitive with, or be AS profitable as the Asian manufacturers. Ever. Then what?
I don’t know the answers. But sometimes I think the blame game between union/management/government handout just provides cover over other significant questions.
May 19th, 2008 at 11:04 pm
Here’s a couple of links for you, Jo… Eye of the Storm in HTML or if you want to download and read it with pictures, Eye of the Storm in pdf. I would point your attention to page 24 where Hargrove calls for capitalism to be replaced with socialism. In other words, nationalizing industries to protect union jobs; the precursor to Communism.
Hejhog, I can’t (and don’t) argue unions don’t serve a purpose at one point in history. If you read what I’ve said, I was clear that management plays a heavy role in the problems with the Big Three face.
The unions could serve good purpose still but that’s not what they’re doing. Unions have become an industry unto themselves and the goal of that industry is to change society to their vision. If they wanted to run as politicians with their ideas, I wouldn’t object but they prefer to remain behind the scenes to escape public scrutiny.
When was the last time you heard someone ask for union leaders to provide a costed budget for their demands? It doesn’t happen but that’s a frequent call for opposition parties who make grandiose promises for the taxpayer’s dollars.
When was the last time someone provided a cost/benefit analysis of corporate welfare the governments have been providing for the Big Three? It doesn’t happen because the politicians know it would cost them votes.
I would argue it’s not the “good job” status which people wish to maintain. After all, the Asian manufacturers are providing wages which are close to the same as the Big Three. People fear change and losing major manufacturing jobs counts as change. As long as politicians continue to bail out the Big Three, there’s no incentive for them to change their management practices and there’s no reason for the unions to back down a single inch.
May 20th, 2008 at 7:29 am
Thanks for those links, Mac.
This is a fascinating discussion, and I’m going to try to pick it up again soon, because this post will be disappearing into the archives.
I love this kind of debate though - civil and informative. Thanks to everyone here.
May 20th, 2008 at 8:58 am
[...] this with Dalton McGuinty’s ‘Cherry-Picking’ approach to handling the Ontario economy. Or Dion’s Tax-Shifting trial balloon which is [...]
June 3rd, 2008 at 10:03 pm
[...] would be easy for the Conservative Government to play the cherry-picking game the way the Liberals love to do, but instead they are acting responsibly with taxpayers’ [...]