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December 17, 2018 December 17, 2018

What did we get for bailout cash?

Posted on December 6, 2018 by Lethbridge Sun Times

General Motors found a novel way to celebrate the centennial of its Canadian subsidiary.
It was 1918 when U.S.-based General Motors Corp. agreed to buy the McLaughlin Motor Car Co. of Oshawa, Ont., paving the way for the formation of GM Canada.
One hundred years later, GM has announced it plans to close the Oshawa manufacturing facility, along with four other plants in the U.S. and two more overseas, as part of a massive restructuring that will see the company trim its staff by 15 per cent, including more than 2,500 Oshawa workers.
Canadians can be forgiven if their immediate reaction is, “Wait a minute, what about all those billions of taxpayers’ money GM Canada got to help them out during the recession in 2009?”
Seems the $10.8 billion in loans, share purchases and subsidies the federal and Ontario governments ponied up to sustain the company and preserve Canadian jobs wasn’t enough to do the trick.
Kevin O’Leary, for one, doesn’t appear surprised. The star of TV’s “Shark Tank” and “Dragon’s Den,” and former candidate for the federal Conservative leadership, told the Toronto Sun, “The GM Oshawa plant closing is proof that government bailouts never work and Canadian taxpayers always lose.”
They certainly seem to have lost in this case. While most of the taxpayer money has been paid back, the CBC notes that the net loss to Canadians on the bailout is in the range of $4 billion to $5 billion.
There are a lot of losers in the scenario involving GM’s announced closures. Besides taxpayers, there are the 2,500-plus workers who will be out of a job. And who knows how many other jobs in related areas the Oshawa closure will cost.
CBC points to a study completed for the autoworkers’ union, Unifor, which says the Oshawa plant contributes $1 billion a year in tax revenue to Ontario and the federal government, along with creating 33,000 spin-off jobs. How many of those spin-off jobs will disappear once the Oshawa facility is no longer operating?
The union vows it won’t let the Oshawa plant be shuttered if it has anything to say about. Jerry Dias, Unifor’s national president, told an overflow crowd at the union’s headquarters that the union will fight “tooth and nail” to prevent the move. Can such efforts save the plant? Federal and provincial officials don’t think so. Ontario Premier Doug Ford said there was nothing his government could do.
GM suggests the closures are inevitable, part of necessary changes to keep up with a changing industry.
“This industry is changing very rapidly, when you look at all of the transformative technologies, be it propulsion, autonomous driving … These are things we’re doing to strengthen the core business,” GM chief executive and chairwoman Mary Barr said Nov. 26.
Perhaps the moves make sense from a corporate business standpoint, but they are a major blow to Canadian autoworkers and the Canadian economy. And it’s a blow to Canadian taxpayers who might be wondering what exactly they got for their bailout money back in 2009, other than a temporary reprieve.

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