At breakfast time, Jim Flaherty was flush with optimism, telling a Toronto audience that the Canadian economy was doing well and that the federal government wants to see Ontario prosper. By midmorning, that rosy view seemed unwarranted when Premier Dalton McGuinty acknowledged that the province was losing hundreds more of the solid, well-paying industrial jobs that had made it wealthy.
Yesterday's announcement that General Motors of Canada Ltd. would be closing its transmission plant in Windsor in two years, taking away jobs from 1,400 people, is merely the latest in a drip-drip of announcements that have cut about 200,000 manufacturing jobs in Ontario in the past four years, including at least 6,000 in the auto assembly sector.
But this one seemed way more serious than, say, the 2,300 forestry industry jobs lost in the past three years or even the earlier sizable layoffs at Chrysler Canada and Ford Motor Co. of Canada. This isn't surprising. It's GM, after all, and the government gave it a $235-million grant in 2005. And yesterday's news was announced just two weeks after the company said it would eliminate a shift of workers and 900 jobs at its pickup-truck plant in Oshawa in September.
The Windsor job losses are horrible news for Mr. McGuinty, and not just for the economic impact on that community (where the unemployment rate is already near 10 per cent). The plant closing has exposed a profound weakness in the government's auto sector strategy in that it has limited ability to influence the Detroit-based auto makers even though it is shovelling piles of money at them.
Related Articles
For years, the Premier has talked ebulliently about how the government has leveraged $500-million into $7-billion of investment in the auto industry. It's clearer now than it has ever been that there are two parallel roads here that will never converge. Ontario may influence decisions by the Big Three by writing cheques to cover 10 per cent of their new investments. But this does little to alter their planning around existing assets. GM, Chrysler and Ford remain the big dogs of industrial capitalism. They may be foundering, but no government in a branch-plant jurisdiction is going to tell them what to do.
A subdued Mr. McGuinty acknowledged as much yesterday when he said the Windsor decision was made in the United States. He said he had talked over the weekend to GM Canada president Arturo Elias and Canadian Auto Workers president Buzz Hargrove to see whether Ontario could do to anything to stave off the closing. "To make a long story short," he said in the legislature, "the answer came back No."
The Premier said later that all he can do is attach job guarantees to new projects. He said that "in an ideal world" he could have made guarantees at all plants a condition of financial support. "But no auto manufacturer was prepared to do that," he told reporters. When it was suggested that the creation of a few hundred new jobs balanced against the loss of thousands of existing jobs seemed like one step forward, two steps back, he replied: "Well, that's the kind of world we live in today. A lot of these shots are called from elsewhere."
The government will now face increased scrutiny of what it has received for its $500-million - how many jobs have been saved or created so far. Economic Development Minister Sandra Pupatello will feel this when she appears again this morning in front of a legislative committee.
In earlier testimony, she declined to talk in detail about the job guarantees in the auto sector grants. "There are just certain contracts that we will not release in the public domain," she said. Is that defiant attitude appropriate, given the way GM is treating Ontario?
