Tuesday, November 27, 2018

He Misses The Big Picture


GM is pulling out of Oshawa. And Doug Ford has rolled over. Martin Regg Cohn writes:

No premier can force GM to cry uncle. But for reasons understood only by Ford, he has given up on the Oshawa decision, deferring to GM’s claim that it is final and irrevocable.
GM is not rolling up its Oshawa operations because it’s bankrupt — the company still earns billions in profits. No, this multinational is strategically re-engineering its own rebirth by wisely reinvesting in low-emissions vehicles that are the next consumer wave.
Where does Ford’s Ontario fit into that investment horizon? Consider the anti-business antics of Ontario’s supposedly pro-business Progressive Conservative government. 

The new Ford government has signalled to GM just how pleasant doing business in this province will be:

Ford’s first act as premier was to rip up signed private sector contracts, notably the White Pines wind turbine project that had previously been approved. To guard against litigation and compensation, he relied on legislation and confiscation.
In the aftermath, Ford spectacularly snubbed his visiting German counterpart last summer by refusing to sign a friendship agreement with the powerhouse state of Baden-Wurttemberg, home of renewable energy companies but also big carmakers. Open for business? Tell that to the Germans.
Ford recklessly dismantled the cap-and-trade framework that business had relied upon to price carbon pollution, laying the groundwork for a default federal carbon tax that created needless disruption.
Zapping renewable energy, the PC government unplugged its electric car supports — and lost a foolish court battle with Tesla after trying to cut out the California carmaker from sales incentives available to others.
The premier picked a public fight with Hydro One’s (admittedly overpaid) CEO. But instead of persuading him to reduce his salary, Ford sidelined Mayo Schmidt and the entire corporate board. Relying on the government’s partial ownership position, Ford chief of staff Dean French shut down any compromise talks, sources say. French later intervened in government-owned Ontario Power Generation to undo the hiring of another corporate executive he wanted out, Alykhan Velshi. Such is the PC government’s approach to corporate governance.
Ford cancelled a planned hike in the minimum wage to $14 an hour, clawed back two paid annual sick days, and cut corporate taxes further. 

The truth is that, like his cousin south of the border, Ford is a businessman who doesn't really understand how business is done these days. Like Mr. Trump, he suffers from a bad case of tunnel vision. And he misses the big picture.

Image: CBC

8 comments:

zoombats said...

If I was a leading car manufacturer planning on a massive restructuring to go green (electric) I would have been paying particular attention to the leadership in the place where I would build my new image. Doug Fords bullying no turnaround approach to governing this province has to be major obstacle to that image. His refusal to accept climate change, carbon tax and the inevitable decline of fossil fuel usage has shown all of us early in his four year blight that he is a moronic buffoon that is not"open for business". I would want to build my cars in the greenest culture I could find. Then again we might all be reading far to much into the G.M. move because Unifor made it known that even the Chevy Volt plant stateside is moving to Mexico. Corporate greed knows no bounds when it comes to excuse making and finger pointing so they might see Doug as just another useful idiot..

Lorne said...

Dinosaur that he is, Ford has no grasp of the new realities, as you indicate in this post, Owen. Hopefully, like long-gone saurians, he will disappear after the next election, as long as voters come to their senses.

Owen Gray said...

Mexico has a wage advantage, zoombats. But, under the new NAFTA, that wage differential is supposed to be significantly less. Ford and Trump deny climate change. Why build the cars of the future in a landscape that is ruled by dinosaurs?

Owen Gray said...

It's clear that Ontarians voted out of anger, Lorne. Like Ford, they suffered from tunnel vision. One can only open that they will soon see farther and wider than the man they chose as premier.

Anonymous said...

GM's legacy in Canada will truly be a very sad one.

It was under the advisement of GM sales folks to remove the thousands of kilometres of light rail in our cities so that bus production would take its place.

Sprawl is now a cancer that will kill North America simply because GM wanted to make more money, while planners, developers and councilors caved to their demands.

Military is also an important facet of GM's legacy, where many of their products were sold to the Nazis during their climb to power and it is said that GM products were key to the 'blitz' machines that stormed Poland, France and the Soviet Union (https://www.toptenz.net/top-10-american-companies-that-aided-the-nazis.php).

Don't forget too that Ontario and Canada have invested tens-of-billions into an electrical infrastructure that has primarily benefited car manufacturers. We have nuclear power plants that will have to slowly wind down if we don't find some suitable customer that will demand the same volumes of electricity.

With these issues and investments - social, political, now-unavoidable environmental costs and public infrastructure - I think it's time to seriously consider nationalizing and taking possession of all of the GM facilities in south Ontario and starting our own car company.

It would be a money pit for a while, but it would focus on new-age vehicles, like a wider range of electric cars, trucks and buses. It could help facilitate training and then reimburse Canadians with dividends instead of fat pay cheques to executives that could care less about Canada.

We know it won't happen, but it would be awesome, right?

Owen Gray said...

Your comment is excellent, Anon. I'd like to publish it. If you resend it with initials, I'll put it on the site.

John B. said...

What are the terms of the phase-in for implementation of the wage floor under the Labour Value Content provisions of the USMCA? Does the floor apply to hourly wage only, excluding the value ascribed to other paid benefits, if any? A direct comparison of labour costs across jurisdictions is invalid without consideration of total compensation packages.

The wage floor is an average wage for the relevant facility and not, as some have either portrayed or presumed it to be, a minimum wage. Note also that, according to Unifor, credits of up to 15 per cent toward satisfying the LVC provision can be awarded "for wages paid in research, development and engineering (10 per cent max) and for maintaining production at high volume North American powertrain facilities (5 per cent max)."

If we don't ask the right questions, we'll all miss the big picture. So, as one stable genius might say, "Let's see what happens."

Owen Gray said...

Good point, John. On the subject of wages, it's not a simple apples to apples comparison. We are, apparently, still a high cost producer. But, given the falling Canadian dollar, I doubt we are as high cost as we were six months ago.