My Bags Are Packed And I Am Ready To Go

I wrote this BLOG about a month ago but just had not posted it. I still believe it to be very relevant, especially after the GM announcements of huge job cuts and plant closings. I guess my US friend whom I quoted was right after all!

Buzz Hargrove thinks the GM health deal won't affect Canada and Governor Granholm just came back from a trade mission to Japan.

I hope that Buzz is right, but I am not sure that he is. I am glad that the Governor took the lead again and that her trip means that some people have figured out that there is a need to be proactive. The automobile world is more than just the Big Three. After all, the objective is economic development for this region.

Buzz stated that "A deal between General Motors and the United Auto Workers to lower health care costs in the U.S. won't dissuade the company from investing in Canada... Hargrove hailed the deal as being positive for the overall health of GM and said it wouldn't affect spending in Canada."

A friend of mine in the US had a different view. Since his company works very closely with the Big Three, I take his viewpoint seriously.

He was greatly surprised that there was a health care deal. It suggested that GM's condition might be very bad and that the UAW had good reason to make concessions.

His view is that no matter what the so-called advantages are in Canada, that we should not expect more work to be placed here in preference to a US location. After all, GM has to please the much more important and larger UAW as a trade-off for their agreement. If there is a choice, Canada loses he believed.

Another reason can also be seen in the US attitude in general which I consider to be very practical. "The UAW said Monday that it agreed to the changes after an in-depth analysis of GM's financial situation. "GM had asked the UAW to help it lower its health care costs before its contract with the union expires in 2007, and both parties have been negotiating since the spring...We believe it is clearly in the best interests of UAW-GM active workers, retirees and their families," UAW President Ron Gettelfinger and chief GM negotiator Richard Shoemaker said.

You remember that Eddie was prepared to go to Japan to see if Windsor could get a new Honda plant. Well Eddie's Japan trip justification was dashed quickly. As the Honda rep said "I hope he enjoys Tokyo and attends the Tokyo International Auto show and has a wonderful time," Miller said of Francis' trip. "Because it ain't so," he said of the plant rumour."

It looks like Honda may have been Eddie's excuse. In reality, Governor Granholm's decisivie action on the border probably gave him a new role model to follow. After all, she lead a trade mission to Japan recently. Being the follower that he is, so would he! If the Governor of the Big Three state could go to Japan, then so could the Mayor of the Big Three city. Yesterday's front page Star story "Big 3's market share at new low More than 50% of cars sold are offshore makes" surely gave Eddie all the justification he now needs for an out-of-country trip to the Orient.

Eddie better get going soon if he is going to go.

Back in January 2003, Mitsubishi Motors Corp. president Rolf Eckrodt confirmed his company was looking for a second manufacturing facility in North America and was willing to look at Canadian locations. In January 2004, Nissan chief executive Carlos Ghosn said at an auto show in Detroit that the company would consider a new North American factory if its market share continues to improve. Audi has been a name for more than a decade for those considering sites for a new car plant. VW is looking for a new plant and "municipal economic development officers are already aware of their intentions and on the hunt for new investment." Hyundai Motor has opened its first manufacturing plant in the US, marking the start of an aggressive expansion in North America by South Korea's largest carmaker. Has anyone from the City approached the new Chinese auto companies for an alliance?

As for Toyota, here is an interesting comment I found to help out Eddie win a new plant for Windsor:

• Paul Krugman ("Why jobs head north," Views, July 26) oversimplifies the factors that go into the decision to build a new automobile plant.When a company like Toyota decides to build a $650 million plant, there are many criteria, such as infrastructure, access to highways and rail systems, utility costs, tax and regulatory climate and, yes, the cost of providing comprehensive benefits. The primary reason for the selection of the Ontario site was its proximity to our existing plant in the province, which will manage many administrative functions for the new plant. Toyota is growing its operations all over North America... We opened a plant in Huntsville, Alabama three years ago, and have expanded it twice. The work force there has been highly motivated, well trained and productive. Almost 30 percent of our hourly team members are college graduates, and 97 percent are high school graduates.*Dennis Cuneo, New York senior vice president,Toyota Motor North America

More importantly the Toronto Star reported:

• "A senior executive of Hino Motor Sales Canada Ltd. confirmed yesterday the Japanese parent company will probably decide in the next month whether to build a plant in Canada next year to assemble medium-duty trucks.
  
  "The parent company (Hino Motors Ltd.) is looking at its options right now and is committed to expanding in North America," said Axel Breuer, vice-president of Mississauga-based Hino Motor Sales. "But it would be inappropriate to comment until the parent gives the green light to the option it approves."

I wonder if Dennis DesRosiers will be invited to go along.

Sayonara Mayor-san.