Canada Losing It's Cost Advantage Over US Plants

[Guest Josh]

TORONTO (CP) - The highly regarded factories of General Motors of Canada are in danger of losing their long-standing labour cost advantage over GM's American operations, an executive of the world's largest automaker said Monday.

GM Canada's new three-year agreement with the Canadian Auto Workers, ratified by union members during the weekend, "drove some cost where we'd rather it hadn't," said Al Green, vice-president for personnel of GM Canada.

GM won non-wage "offsets" - notably a reduction of health-care costs - to the contract's annual pay increases of 1.5, one and one per cent, plus inflation protection, for its 19,000 unionized Canadian workers.

Additionally, "we have a number of initiatives in Canada that could allow us to reduce our overall employment levels between 1,000 and 2,000 over the life of the agreement," Green said.

"Who knows the exact number of lost jobs? But this contract definitely trades better compensation for fewer jobs," commented industry analyst Dennis DesRosiers of DesRosiers Automotive Consultants.

Green told a media briefing on the contract that how job cuts will be distributed between CAW members and United Auto Workers members in the United States remains to be seen.

He said productivity at GM Canada plants has been improving at between 3 1/2 and five per cent annually in recent years, but the strong Canadian dollar has offset this.

More On Page 3 and 4 here: http://www.canadianbusiness.com/news/artic...100389A&page=2#

[ftmjohn]

That was to be expected! Companies cry all the time, when the $ goes up, they cry that they make less profit, if the $ goes down, they cry because it cost more to import stuff!! Blablablabla!!! It is part of doing business!! Get over it! John

[the_yellow_dart]

This has a lot to do with our dollar. It's gone from 69 cents US in the worst of times around 2000, to about 86 cents US today. Not since the 70s has the Canadian dollar even approached 1 dollar US.