Tag Archives: Linamar

U.S. NAFTA position to ‘Buy American’ could savage the Canadian auto parts sector

By Gerry Barker

August 21, 2017

The economic wellbeing of Guelph is now threatened with pronouncements by U.S. North American Free Trade Agreement (NAFTA) negotiators.

There is real concern about the future of the Canadian auto parts manufacturers. Most significant is Linamar, headquartered in Guelph, that employs 6,000 in its complex of 19 plants. The company is the largest private employer in the city and is supported by a number of smaller specialized manufacturers feeding materials and components to the Linamar parts assembly plants.

Linamar is not alone in the potential danger that may culminate in job losses and plant shut downs as the work is shipped to the U.S. Magna International is facing the same dilemma if the U.S. negotiators force auto parts manufacturing back to America from Canada and Mexico.

Both Linamar and Magna have operations in Europe and Mexico. Those plants are equally vulnerable, as the U.S. has already threatened to place tariffs as high as 35 per cent on foreign made parts. In fact, the U.S. government has already arbitrarily placed a high tariff on Canadian softwood lumber products. Canada has retaliated with support for lumber exporters with subsidies. This long-term dispute will be a major issue as talks proceed.

This issue has been fought for several years with Canada winning in the arbitration process. Today, the U.S. NAFTA negotiators are stating they want to eliminate Rule 19, the dispute mechanism system that has worked well for 24 years. Instead, they want all disputes to be conducted in U.S. courts. Canada is opposed to such a proposal that would destroy the independent arbitration system that has worked successfully.

Canada could counter with a demand to have full bidding access to U.S. and State government contracts.

There is no question that the ‘Buy American’ policy as originated by President Donald Trump, and how he fails to understand how well NAFTA works on both sides of the border. The U.S. States bordering Canada are concerned that their economies would be affected if the ‘Buy American’ policies are incorporated in a new NAFTA agreement.

And for good reason, Canada is their biggest market. Placing tariffs on Canada goods at the border would cost jobs and product shortages on both sides of the border.

The whole idea about free trade is to create greater volumes of goods moving across our border. The bigger the markets the more jobs are created.

Yet Trump told his supporters that he would shut down NAFTA in his first week in office. He described it as a terrible agreement, bad for America, one that never should have been negotiated. Since then, he has been convinced that the Trade pacts should be renegotiated.

Here’s an example of how the President pops off at the slightest rejection of his rhetoric.

U.S. wants to eliminate Canada’s supply-side management of agriculture products

The U.S. trade negotiators have told the Canada counterparts that Canada’s dairy industry’s supply-side management system must be scrapped to give U.S. producers free access to Canada markets. The present impact on Canadian consumers is that the 13,000 dairy farmers in Canada, most of who are multi-millionaires, are charging high prices and Canadians are perpetually subsidizing them.

Australia, New Zealand and a number of U.S. dairy producers have scrapped supply-side management in order to compete globally. The Canadian dairy farmers represent a tiny part of the Global market. It’s because they don’t have to compete. The producers’ lobby hard to protect their interests, not those of the citizens who pay high prices for their products.

This is the epitome of a monopoly. Shut out foreign competitors, fix prices, control supply to manipulate profits and you could own a winter home in Miami.

The supply-side management monopolies also exist in egg production, the poultry, beef and pork producers who are all benefiting from the ultimate in market protection with some tariffs exceeding 300 per cent to shut out foreign imports.

This represents a rip-off of the Canadian consumer by those producers. They have control of the supply of their products that has guaranteed inflated incomes and prices for some 30 or more years.

These monopolies are skilled at protecting their gold mines of guaranteed profits. They spend a lot of money on lobbyists to protect their interests with provincial and federal politicians. As one commentator in favour of abolishing Canadian supply-side management system’s domination of Canadian agriculture stated: “These critical trade negotiations are no place for alternative facts,” (as used by lobbyists representing the agriculture producer industries). ”

The auto parts sector of our economy is vital to the future of the country. Most are global companies that compete all over the world. Now is the time for the food supply sector to follow the lead and compete globally. If it does and spends its money on marketing globally, Canadian consumers will benefit and so will the producers.

These NAFTA negotiations could have a direct impact on Guelph in terms of job losses and industrial assessment if plants close. The city’s dismal track record attracting industry could result in greater taxes on the residential assessed community. It is one that already is carrying 84 per cent of the property tax load.

While NAFTA negotiations are just underway, the future is uncertain and scary. It could take years to complete unless any of the three parties involved walk away in frustration.

Something Canadians will never do but there is a big question mark about whether Mexico will stay the course. There remains bad blood between the U.S. and Mexico starting with the President’s promise to build a wall between the two countries and that Mexico would pay for it.

The Mexican President told Trump that the country would not pay for the wall.

But then he promised to build an economic wall between Canada and the U.S. by renegotiating NAFTA.

We’ll see about that.

 

 

 

 

 

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Is Linamar getting a fair shake trying to hire 15 foreign electricians?

By Gerry Barker

August 8, 2017

Years ago, I was employed by Magna International. I was named general manager of a venture to create a new Canadian business magazine titled Vista. In a few months I learned a lot about Magna’s manufacturing ability. The company was creating record business, making a wide variety of parts for new vehicles for the majority of auto manufacturers.

The concept of on-time delivery of those parts to the assembly plants located all over North America and Europe at that time was fairly new. Magna had many manufacturing facilities throughout Canada and the U.S. to meet the strict deadlines for each assembly plant. Their success in meeting those deadlines made the assembly operations more efficient.

I recall that the most pressing need was for tool and die makers. It forced the company to import trained personnel mostly from Frank Stonach’s homeland, Austria, to create the parts. If Canadian authorities had prevented the import of skilled technicians, Magna would not be the company it is today, a world leader in not only supplying parts but also assembling complete vehicles.

The parallels between Magna and Linamar are striking. Both companies were each founded by two skilled immigrants who had the vision of building great corporations.

That was almost 60 years ago and cultures change, people change and so do attitudes.

Last year, Linamar applied to the Department of Employment Social Development Canada to hire 15 foreign-trained electricians. The company argued that they could not retain Canadian electricians. Linamar stated that when they were successful hiring Canadoan electricians, they left for a number of reasons. Those reasons varied from shift work to low wages and benefits.

The department denied the request in 2016 so Linamar appealed to have its case reviewed by Justice Luc Martineau. He supported the decision by the federal employment department and last month rejected the application as published by Guelph Today’s reporter, Tony Saxon.

The Justice heard evidence from the Electrical Workers Construction Council of Canada, representing unionized electrical workers, that there was a high unemployment rate of electricians in the Guelph area. The source of that information was never revealed.

That seems to fly in the face of the claims by the city administration that Guelph has one of the lowest unemployment rates in Canada. Are the qualified electricians alledgedly the only worker group that is unemployed in the Guelph Area?

Keep in mind that Linamar emplys 6,000 workers in Guelph, none of whom are members of a union.

Also, keep in mind that Linamar is the largest non-public employer and taxpayer operating in Guelph with 19 plants to meet its contract obligations with auto industry customers.

When the importation of skilled foreign workers helped Magna grow and prosper, why is Linamar being denied the same right in 2017?

Now, Guelph is a city where there is a large number of unionized public workers. For example, the city employs some 2,100 of which 80 per cent are unionized and the balance belong to a management association. It is estimated that there are more than 5,800 employees in the city being paid from the public purse. That includes the University of Guelph, Guelph Hydro, Guelph/Wellington Public Health services, Guelph General Hospital and the St. Joseph’s Senior Living and Rehab Centre, Ontario service employees, and Federal government employees

The Ontario Liberal government has allowed the growth of these public unions, the number of which has grown exponentially in the past 14 years of the McGuinty/Wynne Liberal governments. Not only has public employee wages and benefits soared but their numbers have increased substantially. In that space of time, the growth of the public sector employees has far outstripped that of the non-union corporations.

The Saxon story generated a lot of comments, mostly attacking Linamar’s employment practices. The main beefs, according to the comments was the company’s shift times that were hard on workers, and also the average pay per hour was only $20. This shift system is described as the “continental” when workers are required to work 12-hour shifts and change starting times every two weeks. Based on that, it would appear that Linamar workers are working slighly more than three days in a 40-hour week.

Given the circumstances, it appears the Electrical Workers Council is denying a major Guelph corporation the right to hire skilled electricians from outside Canada. That is a striking example of a union-based organization protecting its turf. As a former union member and shop steward, I recognize the role of organized labour and the right of collective bargaining.

In this case, the eeelectrical workersw union council has stepped over the line and interfered with the operation of a major Canadian company that is listed on the Toronto Stock Exchange.

We’re talking here about hiring 15 skilled employees because the Canadian electricians don’t want to leave the cocoon of their trade union to work in a non-union shop.

The fact that a federal government department is supporting suppression of hiring skilled foreign workers, particularly when 47,000 Syrian refugees were allowed in last year, did the Trudeau government specify that no electricians would be permitted entry?

Just asking.

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