`Horrible' Chrysler news means thousands of Canadian job losses

• The Telegram (St. John’s)
• New Brunswick Telegraph-Journal
• Thunder Bay Chronicle-Herald
• Belleville Intelligencer
• Kingston Whig-Standard
• Halifax Chronicle-Herald
• Woodstock Sentinel-Review
DATE: 2007.11.01


`Horrible' Chrysler news means thousands of Canadian job losses: Hargrove


TORONTO _ The latest job cuts at Chrysler LLC will cost thousands of Canadian jobs directly and at parts suppliers _ some of which may face bankruptcy _ Canadian Auto Workers president Buzz Hargrove said Thursday.

The automaker's elimination of the third shift at its Brampton sedan assembly plant will cost 1,100 jobs at the factory west of Toronto, he said, adding an estimate that each assembly job ripples out to 7{ related jobs in the wider economy.

Thursday's ``horrible'' news from newly privatized Chrysler _ cutting a total of as many as 12,000 jobs in North America, on top of 13,000 whose elimination was announced in February _ also means an undetermined job loss at the minivan plant in Windsor, Ont., which assembles the Chrysler Pacifica crossover vehicle that is being discontinued.

Hargrove said Pacifica output will end Nov. 26, and production of the Dodge Magnum station wagon in Brampton will cease early in 2008.

Hargrove is hopeful the impact at the Windsor plant will be offset by additional sales of Chrysler's newly redesigned minivans.

But he added that a Magna International (TSX:MGA) parts plant in Windsor employing 100 CAW members and a Benteler Automotive factory with 150 CAW members are solely devoted to the Pacifica.

``Those plants will close unless those companies are able to find other products, which is highly unlikely in today's market,'' Hargrove said.

Several other parts plants are heavily dependent on the Magnum, he added.

As the latest Chrysler move _ also entailing shift reductions at four U.S. plants _ adds to similar recent reductions announced by General Motors and Ford, ``the parts companies are really, really struggling,'' Hargrove told a news conference.

``This could very well push a number of them over the edge, so I wouldn't be surprised to see some bankruptcies declared in the automotive parts sector, or shift reductions or closures as they react to this devastating situation.''

And he said the layoffs _ eliminating all workers with less than 10 years of seniority in Brampton _ are devastating for young workers.

``All of the young people, young married couples who have mortgages and families: they're the ones that will be going out the door,'' he said. ``There's no room left for us as a union to solve the problems of the industry through early-retirement incentives and buyouts.''

Hargrove repeated his long-standing position that the ultimate problem lies in uncontrolled imports from Asia and government inaction to pry open Japanese and Korean markets to Canadian automotive products.

``The imports are what's killing us,'' he declared, adding that Conservative Finance Minister Jim Flaherty's tax cuts this week won't solve the woes of the manufacturing sector.

``We have a government that doesn't believe in government,'' Hargrove said, urging Ottawa in the short term to lower interest rates to improve the competitiveness of the manufacturing sector ``and our most important industry, the auto industry.''

Federal NDP auto critic Brian Masse, member of Parliament for Windsor West, endorsed Hargrove's analysis.

``We have the most open market in the world, and we're losing a sector of the economy that's been very successful for this nation,'' Masse said from Ottawa.

``Why would we allow continued lopsided trade imbalances on this?''

Masse said the sinking of the Pacifica is likely to put 100 to 150 Chrysler workers on the street and eliminate several hundred other jobs in the already hard-hit community of Windsor.

Outside the Commons, Industry Minister Jim Prentice said there's not much in terms of specific aid the federal government can do right now for the auto industry except to help it remain competitive and attract investment.

``At the end of the day our industry has to face global competition,'' Prentice said. ``We have to be tough. We have to be resilient. We have great workers and we still are a location of choice for auto assembly plants. But this is a time of some structural change and we'll continue to work with Mr. Hargrove, with all of the auto companies to make sure that we're competitive.''

Hargrove said that although the United Auto Workers made major concessions in recent negotiations with Chrysler and General Motors in the U.S., ``I'm not prepared to give up anything'' when the automakers' Canadian contracts expire next fall.

``We are not going to be scapegoats for a lack of government policy in dealing with what is the real problem.''

Thursday's news from Chrysler coincided with a Conference Board report estimating that Canadian auto manufacturing as a whole will lose $550 million this year.

This would be half the loss recorded in 2006, and the think-tank expects the industry _ including Honda and Toyota with their booming plants in Ontario _ to return to a small profit next year.

``Loss of market share by the Big Three automakers and the rise of the loonie have taken a toll on Canada's auto industry,'' observed Louis Theriault, head of the Conference Board's industrial outlook service.

The report notes that while profits are forecast to improve, ``margins in the motor vehicle manufacturing industry will remain extremely slim because material and labour costs are expected to increase.''

Sandra Pupatello. Ontario's economic development and trade minister, said the province needs federal government help to attract more auto industry investment.

``We need an auto fund at the federal level to be matching what we're doing provincially,'' Pupatello said in an interview.

``So far, this federal government does not have a strategy for manufacturing, or specifically for the automotive sector.''