No Such Nonsense

A little of this, that and... what was I talking about again? It's TV, sports, pop culture and politics - all the stuff that really matters in life.

Wednesday, June 04, 2008

The Fuss Over GM

The gnashing of teeth has only just started.

Yesterday, GM announced that they would be closing 4 truck plants across North America and were looking at discontinuing or selling the Hummer brand. (At which news the weary hubby asked - 'But what will people use to compensate for their tiny penises if there are no more Hummers?').

The big news here in Canada was that one of the plants closing would be the Oshawa truck plant, throwing some 1,000 people out of work (up to 2000 people, according to some reports). Problem is, though, that earlier this year, the Ontario government gave GM a cushy $175 million loan in return for assurances that GM would keep Ontario job losses to a minimum. Now the union and Queen's Park are calling foul.

It is sad. Oshawa is a GM town. Twenty years ago, GM employed some 20,000 people in Oshawa - accounting for a huge proportion of the city's population for a single employer. Now, it's down to 9,000 people. And make no mistake, it will decline further. In the 1990s, the Big 3 US car-makers responded to the rise of Asian imports by making a big bet on big vehicles - SUVs, minivans and pick-ups. While Honda and Toyota were focused on lean engineering and hybrid technology, Detroit was banking on the suburban SUV. Which seemed to work - for a while. Soccer moms everywhere were driving kicky SUVs. But the advent of gas that costs over $1 per litre eventually put the brakes on the SUV market. Who can afford to tool around in a gas guzzler these days?

Some would say that GM should have seen the increase in gas prices as inevitable (some people like me, for instance). But they made a strategic choice, it backfired and now they have no choice but to change direction. Oil will not get cheaper. Big cars are not the wave of the future. So plants like the Oshawa truck facility - where GM manufactured Chevrolet Silverado and GMC Sierra - are pointless relics.

And as for the money McGuinty and friends want refunded from GM? Well, I say let GM keep it. The deal was that they'd keep job losses to a minimum. And by refocusing the company, that's exactly what they are doing.

But if your kids ask you for advice about what they should do when they grow up - I'd suggest you tell them to look at anything other than manufacturing. The era of well-paid, unionized factory jobs for life is over - for Canada anyway - and it isn't coming back. Recently, for the first time, the number of retail jobs in Canada exceeded the number of manufacturing jobs. The shift to the service economy continues.

1 Comments:

  • At 2:15 p.m., Anonymous Jonathan said…

    I predict that without the Hummer, there will be a sharp increase in Porsche sales as small penis wielding men revert to the original compensation vehicle. Which also has the effect of eliminating bad 'Hummer' double entendres.

     

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