The automaker bailout in America has failed. The sticking point was wages and a demand that auto workers accept parity with Japanese based manufacturers' US wages. The UAW refused.
The demand was really more symbolic than anything else. Wages add about $900 per vehicle and cutting them substantially would not do much to assist the manufacturers. What is more problematic is pensions and benefits -- medical plans. These add vast costs and these were not, it seems, to be cut. In Canada our social system relieves much of this burden.
That said, it may be the UAW miscalculated in refusing to take a cut. GM is hinting at bankruptcy and may go in before Christmas.
All this is making the Federal and Provincial governments here look very wise indeed. A Canadian bailout without a matching US bailout would simply be tossing away money. The delay here is a lifesaver -- unless a bailout is still forthcoming here (surely not?).
Regardless, it will be tough times ahead in Ontario's autocentred towns like Oshawa.
James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4
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