Southern Ontario = Canada

A top story in today’s Globe & Mail entitled Canada’s auto labour advantage evaporates reports that DaimlerChrysler Canada assembly plants in southern Ontario are operating at a disadvantage of $8.81 (U.S.) an hour, compared with U.S. plants operated by the three largest Japan-based auto makers. Labour costs are $51.05 an hour in U.S. dollars at Canadian plants versus an estimated $42.24 at Honda, Nissan and Toyota plants.

Gosh. What a ridiculous thing to say. Honda, Nissan and Toyota are all located in the ‘New Brunswick’s’ of the United States. Of course labour costs will be lower. Cost of living is lower. There is little union influence.

We keep spending hundreds of millions in tax dollars to support new auto plants in the highest cost areas of Canada while in the U.S. they are all going to their version of New Brunswick.

My old pal, Jim Stanford, the CAW economist, says you can’t compare ‘unionized’ labour costs in Canada to non-unionized labour costs in the USA.

Wrong, Jim.

That’s exactly what auto makers will do.

Jim, where’s all that crap about just in time inventories, integrated logistics, clustering effects now?

Alabama is cheaper and more effective than Detroit for auto plants.

The same logic should apply in Canada.

But it doesn’t.

By the way, thanks Jim for that new analysis of the Employment Insurance program in Atlantic Canada. It always helps to know the CAW is looking out for us down here.