TORONTO, Sept. 12, 2013 /CNW/ - The National President of Unifor has urged the federal and Ontario governments to hold onto its shares in General Motors, instead of selling them off to financial investors.
Jerry Dias, leader of the union formed on Labour Day weekend by the former Canadian Auto Workers and Communications Energy and Paperworkers' unions, made the argument in a letter to federal Finance Minister Jim Flaherty and Ontario Finance Minister Charles Sousa sent September 11.
Dias pointed out that GM's shares will continue to appreciate in value in coming years, as the North American auto industry regains sales volumes and profitability. "Selling the public's equity stake in this company now will deny Canadians an opportunity to share directly in that continuing progress," he wrote.
More importantly, Dias argued, maintaining a public equity stake in the company would help to ensure that GM's future manufacturing operations in Canada fairly reflect the contribution of Canadians to the company's turn-around.
"It is essential that we use every tool in the policy toolbox to ensure that GM and the other automakers in Canada retain and grow their operations here," he wrote. "It is simply not enough for a jurisdiction like Canada to make itself competitive on cost grounds, and then wait for global firms to beat a path to our door."
Dias pointed out that many countries around the world retain minority public ownership of automakers and other strategic firms. This includes France (which owns 15% of Renault), the German state of Lower Saxony (20% of Volkswagen), and state development and sovereign wealth funds which own significant stakes in several other European and Asian automakers. Partial public ownership is one way to help ensure these companies remain loyal to the jurisdictions that made them profitable, he said. "It is no coincidence," Dias wrote, "that Volkswagen has not closed a single assembly plant in Germany since the end of World War II."
Dias stressed that labour costs in Canada's auto industry (including for newly hired employees) are fully competitive with those in the U.S., even at the current overvalued exchange rate for the Canadian dollar. Despite this, he warned, governments must play a pro-active role in cementing future investment commitments; retaining their equity stake would help them do this.
Dias's full letter to the two Finance Ministers is available at: http://www.unifor.org/sites/default/files/attachments/lettertoflahertyandsousa.pdf
Unifor represents close to 40,000 workers in Canada's auto assembly and parts industries, including at General Motors.
SOURCE Unifor the union