Is Canada becoming too costly for DaimlerChrysler, Ford, GM?
(More after the jump)
[Source: Globe and Mail] “The labour-cost advantage that the Canadian operations enjoyed five years ago — approximately $15 (U.S.) an hour in 2001—has narrowed because of CAW/UAW contracts, U.S. health care changes and to great extent the rising Canadian dollar, such that by 2007, the active labour costs are projected to be roughly comparable,” said Stew Low, a GM Canada spokesperson. Daimler-Chrysler and Ford also agreed last year at a meeting with the Canadian UAW.
Despite the pronouncement, it’s still less expensive to manufacture in Canada and the once “Big Three” (Daimler-Chrysler is German) have made significant new investments in the country. Other automakers have as well: Toyota, for example, is building a new $1.1 billion plant in Woodstock, Ontario.
But the future is more cloudy than in the past for the Canadian industry. GM has already closed one plant in Oshawa, Ontario, and Ford has book-marked its plant in St. Thomas, Ontario for possible closure.
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