This is just beyond bogus….
Canada would lose more than a half-million jobs if the Detroit Three auto makers went out of business, according to a new report released today.
The Ontario Manufacturing Council said the impact of a complete shutdown of the Detroit-based companies would spread through part suppliers and dealerships and into communities across the province. The council is an arms-length agency established by the Ontario government.
The “council” is not an “arms-length agency,” for starters: it’s a front group of special pleaders, set up by the Ontario Ministry of Economic Development to provide cover for the McGuinty government’s industrial policy ambitions (or, in govspeak, “manufacturing stakeholders who will examine the sector’s long-term needs and recommend to government, strategic approaches on sustaining growth and increasing global competitiveness.”) The vice-chairs are the president of the Canadian Manufacturers and Exporters association and the chief economist of … wait for it … the Canadian Auto Workers.
The report, with its shock-horror estimate of 582,000 jobs lost, is founded on two premises, both of them utterly absurd. One, that all three of the Detroit-based auto manufacturers shut down all of their operations, not just in Canada, but worldwide (the study models “the impact of the Detroit Three automakers ceasing operations globally.”)
Two, that none of the other manufacturers increase production to take up the slack (“foreign vehicle manufacturers in Canada are assumed to maintain production.”)
It’s on the basis of these two extravagantly unrealistic assumptions that the minister is able to talk about “the demise of auto in Canada” or “the extinction of the auto industry” as “the economic equivalent of a nuclear freeze.”
Well, yes. If you dropped a nuclear bomb on Detroit and Windsor, it would cost a lot of jobs. But no one is proposing to do anything of the kind. What is being discussed is bankruptcy, not vaporization. The plants don’t disappear; they don’t even shut down, for the most part. The companies go on producing, albeit at lower volumes. But that’s what would happen in any event, because people are buying fewer cars.
But they’re still buying some cars. That’s the other part of this “study” that’s hard to take. Detroit sold something like 18 million cars worldwide last year. Even with a 20% decline in sales, that’s still 14 or 15 million willing purchasers of automobiles that, under the study’s assumptions, would apparently have to walk, owing to the other manufacturers’ inexplicable failure to ramp up production — or buy up Detroit’s unused capacity — to meet the demand.
It would have taken five minutes for somebody in the media to see through this obvious con job. Yet in every story I saw, the 582,000 number was reported straight, just as if it actually meant something. Go figure.
UPDATE: 300,000 JOBS “AT RISK” IN FORESTRY SECTOR
Trees will go unfelled, wood will cease use, unless forestry companies get $600 mil.
PAC’s members employ about 300,000 people and account for 12 per cent of Canada’s manufacturing activity, more than the auto and banking industries combined.
That is, until lumber became extinct…
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