Don't sell off GM shares, autoworkers union tells Ottawa, Ontario
Stake will give governments leverage in keeping auto jobs in Canada, Unifor says in letter to governments
The union representing Canada's autoworkers has urged federal Finance Minister Jim Flaherty and Ontario Finance Minister Charles Sousa not to sell taxpayer-owned shares in General Motors, so governments will have influence with the company in bargaining for Canadian jobs.
Jerry Dias, leader of Unifor, the union formed by the merger of the former Canadian Auto Workers union and the Communications Energy and Paperworkers union, sent a letter to the federal and Ontario governments Wednesday after learning of the governments' plan to sell $1.1 billion in GM shares.
Ottawa and the Ontario government acquired GM shares in 2009 after providing the ailing automaker with around $10.6 billion in aid. Between them, they owned 11.7 per cent of the automaker.
Dias warned that by selling now, when the shares are valued at $37 US, Canadian taxpayers are losing out on the appreciation in value expected from the now profitable company in the coming years.
Flaherty said he planned to sell Ottawa’s remaining shares in GM "as quickly as feasible."
Ottawa and Ontario also will lose a valuable bargaining chip in dealing with GM if the shares are sold, Dias warned.
GM has "hardened its attitude" in talks with Unifor over its continued investment in Canadian manufacturing, Dias said.
"Our efforts to confirm future capital investments and model allocations by GM in its Canadian facilities have been unsuccessful," he said in the letter.
"To the contrary, GM has shifted the future assembly of some core products (like the Camaro) to other jurisdictions, despite the profitability of its Canadian facilities."
Canadian labour costs on par with U.S.
Dias notes that Canadian auto workers made big concessions to keep manufacturing here during the recession in the form of a four-year wage freeze and a deal that allows new hires to be paid based on lower pay scales than other workers.
In addition, GM retirees in Canada experienced reductions in pension indexing and health care coverage.
GM's labour costs in Canada are on a par with its U.S. plants and similar to non-union Canadian assembly operations of Toyota and Honda, but the automaker is still talking about moving more jobs to the U.S., Dias said.
"GM officials have complained bitterly and publicly about labour costs in Canada; they have also complained equally publicly about virtually everything else associated with manufacturing here (electricity prices, traffic jams, payroll taxes, and so on)," Dias said.
These complaints "are not justified," he wrote, but GM makes them to boost its leverage in negotiating with unions and the government.
GM rhetoric is used to extract value
"GM makes similar demands on unions and governments everywhere else that it operates (such as its recent threats to withdraw manufacturing investment from Korea)," Dias said.
"Surely, you understand that this rhetoric reflects its normal approach to extracting as much value as possible from every jurisdiction where it does business, backed up by its ability (in the absence of regulatory measures to constrain its investment mobility) to threaten any jurisdiction in the world with disinvestment."
Dias points to the French government’s 15 per cent share of Renault and the German state government of Lower Saxony’s 20 per cent share in Volkswagen as examples the federal government and Ontario should follow.
Canada faces an uphill battle to maintain a share of GM's production unless it uses the leverage it has a major shareholder, he said.