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End Chrysler subsidies: New Transport Vision Needed

By the Vancouver Ecosocialist Group - Rank and File Canada, March 26, 2014

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

Chrysler Corporation announced last month that it plans to invest $3.5 billion to retool its assembly plants in Windsor and Brampton, Ontario and produce new lines of vehicles. But it set two big conditions—that the federal and Ontario governments provide $700 million in subsidies, and that the union of assembly line employees, Unifor, accept wage concessions, notably lower salaries for new hires.

Unifor and the two levels of government agreed to the subsidy demand. We believe this a wrong choice for society, including for autoworkers. This statement is an argument for an alternative path.

Chrysler has publicly withdrawn the subsidy demand in order to avoid the public criticism and scrutiny it stirred up. But Globe and Mail auto industry analyst Brian Milner has written, “There isn’t a jurisdiction that has managed to retain or win an auto plant for decades without significant incentives of some sort… Mr. Marchionne [Chrysler CEO] knows he will get his public money somewhere.”

Since 1965, the year the U.S.-Canada Auto Pact trade agreement was signed, every auto assembly investment in Canada has received generous government grants. Today, jurisdictions in North America are competing intensely for auto industry investment through subsidies and tax breaks. Chrysler, meanwhile, never paid back $800 million of the $2.9 billion in loans it received from the federal government during the 2008 financial crisis. The company declared $3.2 billion of profits in 2013.

Unifor is saying ‘no’ to the wage concessions demanded by Chrysler. But it’s in a very difficult position because deep concessions by the United Auto Workers union in the U.S. over the years have seen drastic reductions to the wages and benefits of new hires in the industry there.

Unifor’s policy on the auto industry is inherited from its predecessor, the Canadian Autoworkers Union. A CAW policy paper adopted in 2012 argues that private automobiles should continue to figure centrally in Canada’s urban and overall transportation future. It argues that the Canadian government should continue competing with other countries to attract auto industry investment by offering subsidies.

Unifor and the rest of the union movement should act on the scientific evidence that tells us that continued reliance on private cars and trucks is a leading source of greenhouse gases and global warming. That includes vehicles powered by alternative fuels. Electric cars, for example, are no answer when their electricity is generated by fossil fuels. Their batteries contain minerals that are highly polluting to dig up and refine.

We need to break the stranglehold on society by the auto-oil industry duopoly. The domination over urban design and planning by real estate developers, automotive interests, the oil industry and their banking and insurance partners must end. We need an alternative economic and political future; a socialist vision in which governments undertake the massive social investments to create socially beneficial jobs and end the destruction of our natural environment.

A great many productive jobs can be created through such measures as:

  • Retooling the auto industry to produce components for public transportation and renewable energy systems.
  • A massive expansion of quality, fare-free public transit in our cities and towns. More freight transport should be done by rail and water in place of road. Fast trains must replace much air travel.
  • Planning and reorganizing cities so that most individual travel is by walking, cycling or high quality public transit. New urban forms can reduce the distances we are compelled to travel for work and recreation.
  • Many jobs can be immediately created by building social housing on a large scale. That should begin on First Nation territories, where the needs are especially acute.
  • Renewable energy sources should replace energy generated by fossil fuels and nuclear power. Conservation measures can greatly reduce the demand for energy and create many jobs.
  • Society should foster local sustainable agricultural production, repair the damage to forests, fisheries, land and waterways, and expand public health and education.
  • A general reduction in work time (without loss of income) should be instituted across the economy. For decades, the benefits of productivity gains have all gone to the owners of capital.

Meaningful employment and replacement income should be guaranteed to anyone who loses their job because of changes during transition periods. Some industries that are key to economic planning, notably banking and energy production, must come under public ownership with workers and community control.

Socialism is the opportunity to place planning and human needs at the center of economic decision-making. We need to end growth for growth’s sake and end the drive for profits that has no regard for human needs or the health of our planet. We must build an economic democracy that satisfies real human needs, including the most critical one, a healthy environment.

Subsidies to the corporate polluters and climate wreckers take us further down a wrong path. To be relevant to a new generation, unions must point the way to a better future, not defend the bad old ways that are leading our planet to the brink of environmental catastrophe.

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