Friday, June 06, 2008

The recent announcement by General Motors that they intend to close their Oshawa Ontario truck plant has brought at least one issue into the public view. Exactly how much have the various auto manufacturers sucked from the public purse over the years ? And for what results ? There is little doubt that the present government of Ontario, despite the fact that it has the power to act against contract breakers-unlike the CAW union- will never act against General Motors for recovery of past handouts that were given with the understanding that a certain number of jobs were to be maintained in Ontario. THAT is a rock solid guarantee.As a matter of fact contract breaking on the part of corporations who have received government subsidies is a rather common occurrence, and to Molly's knowledge no government anywhere in North America has EVER acted to recover the money so wasted. I await disproof on the part of my readers. Does the phrase "punishment-free scam" come to mind ? I wish I could break contract law so freely. Welcome to the site of Molly the multi-millionaire.
But how much exactly have various governments shovelled into the maw of the auto manufacturers in past years ? Molly has been trying to search this down in the last few days, and I have to say it is difficult. Still, here is one number from a consumer website, 'The Truth About Cars', one that is hardly a raving leftist source. The total for various auto companies from the government of Ontario alone seems to be an astounding seven billion dollars. All this is very relevant as the federal Conservative government seems poised to throw yet another few hundreds of millions of dollars at GM. As a reward for its past behavior ???
Here's the article.
Ontario Premier: “No Regrets” Over $250m GM Handout
By Edward Niedermeyer
May 14, 2008
Canada (like most other developed countries) has a hard time attracting/keeping auto manufacturing jobs due to high labor and tax costs. To counteract these competitive disadvantages, provincial governments often offer car companies tax holidays and other incentives. The problem with these handouts is that they do not guarantee a long-term presence by the bought-off manufacturers. Exhibit A: GM got handouts worth nearly $250m in provincial tax money (and about $200m in federal funds) for its Beacon project aimed at revitalizing its Canadian production facilities. Now, a few short years later, they're cutting some 1400 jobs at their Windsor transmission factory, with another 900 lost due to production cuts at the Oshawa truck plant. Having spent some $7b on various automaker subsidies without receiving a single job guarantee, Ontario Premier Dalton McGuinty is coming under fire. "The more money this government invests in a company, it seems the more jobs are lost," says Progressive Conservative MPP Bob Runciman. But McGuinty says he "doesn't regret" giving the money to GM (at least until the next election). Report on Business tells us that GM is set to ask the Ontario government for another $140m to build transmissions at its St Catherine's plant. Oh, and don't expect GM to offer any job guarantees, either.

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