Budget Auto Incentives Hammers Domestic Auto Makers



    TORONTO, March 21 /CNW/ - In a letter to Prime Minister Stephen Harper,
CAW president Buzz Hargrove criticizes the Harper budget's incentive for fuel
efficient and alternative fuel vehicles. The incentive provides a higher
incentive to an imported 4-cylinder vehicle than to leading-edge, Canadian
built products.
    "To introduce an incentive program that rewards imports without requiring
foreign producers to make commitments here, is outrageous. Your government's
incentive program will encourage consumers to buy imports from Asia at the
expense of our manufacturers and the jobs of our members," said Hargrove in
the letter.

    Hargrove's letter to Harper follows:

    "In the 2007 budget your government had the opportunity to meet the twin
goals of improving the environment while strengthening the domestic auto
industry. You have failed on both accounts. That you chose to ignore our
proposals that would have achieved both may be about politics. But to ignore
the fact that all around the world governments are acting in ways that support
their domestic production is a callous disregard for the problems workers and
their communities in Canada's auto industry are facing.
    It doesn't make any sense that your government would announce a program
to get older vehicles off the road and yet fund it at such a low level as to
render the program meaningless. There are about 18 million vehicles on our
roads, over one million are 20 years or older ---your program may encourage
15,000 at best of them to be retired next year.
    It doesn't make any sense that you would announce an incentive for fuel
efficient and alternative fuel vehicles and then provide a higher incentive to
an imported 4 cylinder vehicle than to leading-edge, Canadian built products.
To introduce an incentive program that rewards imports without requiring
foreign producers to make commitments here, is outrageous. Your government's
incentive program will encourage consumers to buy imports from Asia at the
expense of our manufacturers and the jobs of our members.
    Workers, facing layoffs such as those in engine and transmission plants
in Windsor and St. Catharines, now have to wonder whether the products they
produce will end up in vehicles that are hit with a poorly designed gas
guzzler tax.
    General Motors, Ford, and Chrysler who provide 80 per cent of the
investment and 80 per cent of the jobs in the Canadian auto industry are in
trouble. Auto workers, their families and their communities have already been
hit hard. And the future is at best uncertain.
    We already contend with an artificially high dollar; we already have to
deal with the most open automotive market in the world; we already have to
bear the cost of your government's refusal to challenge foreign producers who
use currency manipulations and closed markets to advance their industries; and
we are already vulnerable to your unreasonable determination to expose our
auto industry to even more unfair competition in bilateral trade deals.
    CAW members continue to produce high quality vehicles, we continue to
chalk up impressive productivity gains, we continue to bargain for additional
investment and flexible plants. But we are no match for reckless government
policies.
    The 2007 budget could have signaled a different approach. It could have
said that there is no necessary contradiction between the environment and
jobs. It could have put in place programs that would encourage drivers to
shift from older vehicles to newer technologies. It could have demonstrated a
real commitment to Canadian green automotive technology, investments and
strengthening production. Your Budget could have demonstrated leadership, but
didn't.
    Imports of foreign made auto products continue to flood our market at
levels that no other country would tolerate. Canada's trade balance in auto
has shifted dramatically from a surplus to a deficit for the first time in 18
years. Thousands of Canadians have lost their jobs in the auto industry. And
now, as auto workers, we face further job loss due to a poorly conceived and
designed budget.
    I strongly urge you to scrap the proposals in Budget 2007 and to sit down
with the industry and our union to design a set of programs that can drive
environmental improvements and at the same time strengthen our industry."





For further information:

For further information: David Robertson, CAW Research, (416) 219-5257

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Canadian Auto Workers Union (CAW)

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FEDERAL BUDGET REACTION 2007

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