Kevin O'Leary: General Motors is screwing Ontario, politicians are to blame
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Tags: Autos, Unifor (formerly CAW - Canadian Auto Workers), General Motors (GM), Jeff Lagerquist, Kevin O'Leary, U.S. Auto Industry
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The phrase “Too big to fail” was front and centre in the minds of people on both sides of the border back in 2009. Fearing the big U.S. auto makers would collapse under the weight of the financial crisis, Ottawa and the Ontario government sunk US $13.7-billion into the largest corporate bailout in Canadian history.
BNN commentator Kevin O’Leary has a different take after General Motors of Canada Ltd. announced it’s ending production of the Chevrolet Camaro at its Oshawa Ont. assembly plant as of Nov. 20.
“Basically Ontario tax payers got screwed. That’s exactly what happened. Am I outraged? Of course. Do I want to see this happen again? Never,” he said.
O'Leary believes Canadians essentially gifted billions to the auto industry, guided by short-sighed politicians jockeying for re-election by promising to protect high-wage jobs without any guarantee that their investment into the auto sector would produce long-term employment dividends.
Approximately 1,000 positions - more than a quarter of the Oshawa plant’s hourly workforce - will be eliminated throughout 2015 as parent company General Motors Co. (GM.N 1.03%) shifts Camaro production to its Grand River plant in Michigan.
Canada's auto industry lost 53,000 jobs - a 31 percent decrease - since 2001. Ontario lost 43,000 auto jobs during the same time, with Windsor getting hit the hardest, losing 11,900 positions between 2001 and 2013 according to a report from Automotive Policy Research Centre published earlier this year.
Automotive assembly and parts manufacturing represented one-in-five full-time jobs in 2001, a ratio the fell to one-in-eight by 2013.
“The inherent promise from management at the time, I think everyone remembers, was to maintain jobs in Ontario. Which was the reason I along with you and every other Ontarian who was taxed to pay for that specific gift to GM was told it was good for the long-term job base in Ontario,” said O’Leary.
BETTER OFF BANKRUPT
He says allowing GM to fall into bankruptcy would have ultimately been the better decision both for the auto industry and the tax payer, and blames Unifor, the union that represents GM's hourly workers, for turning GM into a “second-tier company.”
O’Leary says the extreme volatility of the financial crisis was an opportunity to cleanse weaker companies from the market place, allowing their assets to flow to stronger managers.
GM promised the federal and provincial governments it would keep 16 percent of its total production in Canada until 2016. With that deadline rapidly approaching, along with a major round of labour negotiations, GM is remaining tight-lipped about the future of its Canadian operations.
“Now we have a weak company that’s slashing jobs and costing us billions. It would have been cheaper for me as an Ontario tax payer to pay every single one of those GM employees, let them go bankrupt, and give them a gift in perpetuity, a new home, educate their next two generations, and send them all to Spain for a holiday in the winter than to do what we did. It was a stupid move, and now we are paying for it,” said O’Leary.
BNN commentator Kevin O’Leary has a different take after General Motors of Canada Ltd. announced it’s ending production of the Chevrolet Camaro at its Oshawa Ont. assembly plant as of Nov. 20.
“Basically Ontario tax payers got screwed. That’s exactly what happened. Am I outraged? Of course. Do I want to see this happen again? Never,” he said.
O'Leary believes Canadians essentially gifted billions to the auto industry, guided by short-sighed politicians jockeying for re-election by promising to protect high-wage jobs without any guarantee that their investment into the auto sector would produce long-term employment dividends.
Approximately 1,000 positions - more than a quarter of the Oshawa plant’s hourly workforce - will be eliminated throughout 2015 as parent company General Motors Co. (GM.N 1.03%) shifts Camaro production to its Grand River plant in Michigan.
Canada's auto industry lost 53,000 jobs - a 31 percent decrease - since 2001. Ontario lost 43,000 auto jobs during the same time, with Windsor getting hit the hardest, losing 11,900 positions between 2001 and 2013 according to a report from Automotive Policy Research Centre published earlier this year.
Automotive assembly and parts manufacturing represented one-in-five full-time jobs in 2001, a ratio the fell to one-in-eight by 2013.
“The inherent promise from management at the time, I think everyone remembers, was to maintain jobs in Ontario. Which was the reason I along with you and every other Ontarian who was taxed to pay for that specific gift to GM was told it was good for the long-term job base in Ontario,” said O’Leary.
BETTER OFF BANKRUPT
He says allowing GM to fall into bankruptcy would have ultimately been the better decision both for the auto industry and the tax payer, and blames Unifor, the union that represents GM's hourly workers, for turning GM into a “second-tier company.”
O’Leary says the extreme volatility of the financial crisis was an opportunity to cleanse weaker companies from the market place, allowing their assets to flow to stronger managers.
GM promised the federal and provincial governments it would keep 16 percent of its total production in Canada until 2016. With that deadline rapidly approaching, along with a major round of labour negotiations, GM is remaining tight-lipped about the future of its Canadian operations.
“Now we have a weak company that’s slashing jobs and costing us billions. It would have been cheaper for me as an Ontario tax payer to pay every single one of those GM employees, let them go bankrupt, and give them a gift in perpetuity, a new home, educate their next two generations, and send them all to Spain for a holiday in the winter than to do what we did. It was a stupid move, and now we are paying for it,” said O’Leary.
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