Automakers, Unions, and “Lobbying and Hammering”

An Interview with Buzz Hargrove, CAW President
Labour Relations

Queen’s Industrial Relations Centre Director Carol Beatty sat down with CAW President Buzz Hargrove during his recent visit to campus and discussed developments in the automobile manufacturing sector and the role of his union in addressing major changes in the industry.

You mentioned in your Don Wood Lecture here at Queen’s that negotiated agreements with the Big Three auto makers are no longer set in stone, that they can be superseded by a crisis of the day. Given this, can you offer more detail about the recent GM and Ford announcements about plant closures? And what were you able to do for the downsized workers?

Let’s take General Motors as an example. Within a month of ratifying the collective agreement, we were suddenly called to a meeting at 7 a.m. CEO Rick Wagoner was scheduled to make an announcement in the United States that day. We knew it would have an impact on Canada when we were called in.

They told us that they were closing Car Plant 2 in Oshawa at the end of August 2008. They were reducing one of three shifts in Car Plant 1 sometime in fall 2006; thirty-nine hundred jobs total. We thought our operations were safe because we were the highest quality, highest productivity, lowest cost plant on the continent. We were shocked.

GM says they’re closing these plants because they have “no product” for them. They say they’re concentrating on producing vehicles that they know would sell. They were losing market share, and the pressure from Wall Street to get lean and mean was enormous. At the time, we were producing Buick LaSabre, Buick Lacrosse, and Monte Carlo. There was not enough demand for these models.

Our national settlement wasn’t touched but the job loss was huge. The message is: Even if you’re the best, you don’t necessarily keep your job. We’re still trying to help the downsized workers. A large number are ready to retire but we could still end up with layoffs. We’re trying buyouts, voluntary retirement, everything we can.

I know you believe that some of these crises are caused by the lack of a level playing field between North America and Japan in terms of auto imports. What do you propose to solve the problem?

The Canadian and American governments should say to Asia, “We’re not going to allow you to sell anything in our market you don’t build here unless you open your own markets to reciprocal exports.” It would also send a strong message to China for the future.

You’ve mentioned the industry will be in worse shape when China starts exporting automobiles. Is Ontario’s auto industry doomed?

All the analysts are saying that you can build a comparative vehicle [in China] for one-third to one-half the cost here. Wages, material costs, energy, tooling and machinery are all lower in Asia, even though every day you hear about mine disasters and other dangerous working conditions. There are no unions, no dissent. The real issue for us is: Do we really want to buy from whoever makes [a vehicle] cheapest at the expense of our own economy?

Without government policy changes, the industry will be a shell of what it is now in Ontario. Our economy was over-reliant on automotive to start with and the Auto Pact favoured Canadian parts as well as assembly. Now, all that has changed.

Way back in the days of Pierre Trudeau, the government was prepared to get tough in these situations. Why not now?

[Former union head] Bob White met with Trudeau and Ed Lumley back in the early 1980s when imports from Japan were growing. The Americans were forcing the Japanese to invest in the U.S. and Japan agreed to voluntary changes in the U.S. but Canada was ignored. Trudeau told Lumley to just “do it”: to tighten up inspection at the entry port of Vancouver. He also told Lumley to take the political heat from that decision and he did, and Trudeau defended him despite layoffs at the docks. There was a backlash in B.C. but they held firm until the Japanese government ensured that the major players made investments in Canada. It took a long time but they did it.

Why not now? Since we signed the Free Trade Agreement, there’s been this mood in the country that free trade is great, that it’s the fault of the auto makers and the unions if there are problems or layoffs in the auto industry. Politicians take great comfort from that. The Southern U.S. states were giving huge incentives to build plants there – 20 percent of start-up costs on average. But we couldn’t convince Jean Chretien to meet with us on this issue. No movement. John Manley was a free trader. Alan Rock was immovable. When Martin took over, we finally got a hearing. He appointed David Emerson as Minister of Industry, and Emerson listened and responded. Dalton McGuinty (premier of Ontario) too. They started offering incentives to the Big Three to invest here. We were finally getting to them on the trade issue. They made some strong statements.

Then the election came. Now we have to start over again. We’re not sure how the Harper government will respond to this issue, but we’re going to lobby and hammer. [Harper] will have to deal with me on this issue whether he likes it or not.

Thanks for your insight. We’ll keep a close eye on these issues and hope you make progress on creating that level playing field.

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