willheim on Nostr: With not just tariff threats, cross border issues including strikes by border agents ...
With not just tariff threats, cross border issues including strikes by border agents on the Canadian side, Union issues in Canada, and higher energy costs, and higher taxes including national pension and employment insurance (wage taxes), why would any automotive or manufacturing company have a branch in Canada?
So long as our exchange rate remains favourable it's pretty simple: cheap labour. The average starting wage of a Canadian Auto Worker (union member) is $20/hr. That's $13.50/hr US at current exchange rates. About what many fast food joints pay their workers in the States. The UAW (United Auto Workers Union) secured a deal paying their workers $42/hr just across the Ambassador Bridge. That's nearly 3x more! On top of that transportation by truck by Canadian carriers is highly saturated and suppressed where the $/mile is about 66% of an American trucker on average.
So what are the odds that the Big 3 will ever "reshore"? And add on top the cost of moving plants and the time it would even take to do so? It ain't happening. Heck, even with the tax subsidy support by the federal and provincial govts Canada has been losing jobs to Mexico and China. It's not Canada that's the problem. It's not China or Mexico, either. It's globalism, the desire of producers to produce more profits and consumers to buy things cheaper while their portfolios keep going up.
And this trend will not change. In the 60s and 70s Japan was the "Big Threat". In the 2000s it's China. China will eventually face their own issues as India rises and then there's always the tax free/tariffs free economic zones that exist in places like Vietnam and are used by major American brands like Nike and Levis.
So what's the deal? What's really going on? Remember Trump announcing a deal with Carrier back in 2016? That didn't result in anything but headlines. Remember 2016 Wisconsin the big deal made with Trump and opening a huge plant for Foxxcon (Chinese manufacturer of iPhone)? Yeah, it's still not fully and not much promised has happened but it did cost a lot of tax dollars (subsidies). From 13k employment promised, so far only 1.4k actually employed. Cost: $680M (down from the touted $10B!)
So, life will go on... We'll just be left not knowing which way it will go except entertaining.
So long as our exchange rate remains favourable it's pretty simple: cheap labour. The average starting wage of a Canadian Auto Worker (union member) is $20/hr. That's $13.50/hr US at current exchange rates. About what many fast food joints pay their workers in the States. The UAW (United Auto Workers Union) secured a deal paying their workers $42/hr just across the Ambassador Bridge. That's nearly 3x more! On top of that transportation by truck by Canadian carriers is highly saturated and suppressed where the $/mile is about 66% of an American trucker on average.
So what are the odds that the Big 3 will ever "reshore"? And add on top the cost of moving plants and the time it would even take to do so? It ain't happening. Heck, even with the tax subsidy support by the federal and provincial govts Canada has been losing jobs to Mexico and China. It's not Canada that's the problem. It's not China or Mexico, either. It's globalism, the desire of producers to produce more profits and consumers to buy things cheaper while their portfolios keep going up.
And this trend will not change. In the 60s and 70s Japan was the "Big Threat". In the 2000s it's China. China will eventually face their own issues as India rises and then there's always the tax free/tariffs free economic zones that exist in places like Vietnam and are used by major American brands like Nike and Levis.
So what's the deal? What's really going on? Remember Trump announcing a deal with Carrier back in 2016? That didn't result in anything but headlines. Remember 2016 Wisconsin the big deal made with Trump and opening a huge plant for Foxxcon (Chinese manufacturer of iPhone)? Yeah, it's still not fully and not much promised has happened but it did cost a lot of tax dollars (subsidies). From 13k employment promised, so far only 1.4k actually employed. Cost: $680M (down from the touted $10B!)
So, life will go on... We'll just be left not knowing which way it will go except entertaining.