Responding to the Auto Industry Crisis

December 5, 2008, 2:44 PM EST

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The closure of any one of the Detroit Three auto companies would have a huge negative impact on the Canadian economy, hundreds of communities and many, many more families and workers, said Lewenza in a meeting of the CAW Council on December 5, 2008.

Lewenza said the tax base would be severely eroded in Canada and the U.S., millions of jobs lost, businesses closed, and family breakdowns would occur if General Motors, Ford or Chrysler are allowed to shut down.

Lewenza said Canadian Parliament and the United States Congress must provide the investment and support needed to ensure these important manufacturing companies survive the current economic crisis.

He stressed that blaming management for the current crisis is far too simplistic. The North American auto market is in major shambles because of a global financial credit crisis. Almost every car company around the world is losing sales, not just GM, Ford and Chrysler. In the United States a total of 10.5 million vehicles will be sold this year, which is five million fewer vehicles than in a normal sales year, he said.

The CAW has acted proactively to deal with this crisis, including entering into early bargaining with the Detroit Three and agreeing in the last round of contract talks to $300 million in cost savings per year over the next three years, Lewenza said.

He blasted Conservative Industry Minister Tony Clement for saying the Harper government would only act if the CAW and its membership agreed to give up more.

Delegates were urged to support a campaign to ensure the federal and provincial governments provide the necessary investment monies to the auto industry, which is an industry that provides millions of dollars in tax revenue and supports, which in turn support health care, education and social services.

Lewenza said to restore the long-run viability of the continental auto industry a new North American Auto Pact must be negotiated to foster a new wave of investment in a revitalized auto industry.

Under this pact, offshore based automakers would be required to produce automotive value-added in North America that's equivalent to the value-added products they sell here. They must be required to either establish more plants here, purchasing exports back from North America equal to their imports into North America or by participating in joint ventures to produce vehicles in partnership with the Big Three as Volkswagen and Suzuki already do in Canada.

Failing to meet these requirements would result in limits on their imports to North America. Also, the North American Auto Pact would ensure that each country within North America receives a share of auto investment and employment proportional to its domestic market.

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