Mark Collins – General Motors/Canadian Union Deal Looks Set: Governments’ Money Coming (Bombardier too?)

Further to this post,

Why Delay in Canadian Federal Funding for Bombardier? Ontario Auto Sector 

Ontario is almost certain to pony up money and surely there will be a good dollop of fed funds coming too (perhaps after Bombardier gets its tranche du porc?).

1) Ontario government:

Government support may have helped Unifor clinch deal with General Motors of Canada, avoiding a strike

Not only did Unifor narrowly avert a strike at General Motors of Canada Ltd., it got more out of its tentative agreement than seemed possible in the days leading up to Tuesday morning’s deal.

Although details of the contract are hazy and won’t be released until workers have voted on it, it appears that a combination of promised government support, a cheaper pension plan for new hires and possible buyouts were enough to secure the future of GM’s assembly plant in Oshawa, Ont., which until the early hours of Tuesday morning was very much up in the air…

One line in its brief press release may indicate another reason why Unifor was able to achieve so many of its goals, however.

“We will be working with government on potential support and will provide further details on the investment at the appropriate time,” GM said.

Brad Duguid, Ontario’s minister of economic development and growth, said Tuesday [Sept. 20] his government made it very clear to both sides that it would be a willing participant in any deal.

“This government is the biggest champion of the auto sector that the province has probably ever had, and we’ve made it very clear that these are the kind of projects that we would partner on as we have in the past and we expect to in the future,” Duguid said in an interview.

He wouldn’t specify the kind of support that has been offered, saying “that’s to be discussed in the coming days.”

“This is extremely important for the auto sector across the province, and we fully expect that we’ll be there to provide support for this deal,” Duguid added…

2) Ottawa:

Grants major influence in auto bargaining, auto expert says

Changes to the federal government’s funding for automakers played a big role in contract negotiations between General Motors of Canada and its employees, says Ian Lee, a business professor at Carleton University [my favorite Canadian economist, more here].

Unifor announced a tentative agreement with GM early Tuesday just after a midnight strike deadline.

Unifor announces tentative deadline deal with GM to avert strike

Lee credits the deal, in large part, to the Canadian government’s recent decision to convert loans from its Auto Innovation Fund into grants.

Though a spokesman for Canada’s industry ministry would not give specifics on how the new funding will work, Lee says the change means the automotive sector can be much more competitive with Mexico and the Southern United States [see earlier: “Ottawa changes auto fund to issue grants instead of loans”]…

3) More details on the tentative deal:

SUV plan key to GM’s deal with union

Just keep that taxpayers’ money coming.

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

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4 thoughts on “Mark Collins – General Motors/Canadian Union Deal Looks Set: Governments’ Money Coming (Bombardier too?)”

  1. And fed money will come for Bombardier:

    ‘…
    Quebec — which last year committed to a $1-billion investment in the C Series program — has been urging Ottawa to come to a decision on whether or not to match its funding.

    “We’re currently engaged with the company. We’re at the table with them,” Mr. Bains told reporters after the announcement Tuesday [Oct. 11]. “It’s not a matter of ‘if we want to engage Bombardier.’ It’s how. We’re very confident that we can find a solution. We want to be part of the solution and we’ll always be at the table. We won’t walk away.”..’
    http://www.theglobeandmail.com/report-on-business/bombardier-consortium-get-54-million-from-ottawa-for-new-technologies/article32317105/

    Mark Collins

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