Tuesday, June 03, 2008

General Motors' Sinks 1,000 Jobs and $29 million of Ontario Cash

General Motors has announced it intends to wind down production in 2009 at its Oshawa plant for vehicles the market no longer is buying. This will result in the loss of 1,000 jobs in the Oshawa area. This is a sad hardship families will be forced to struggle through. The Ontario government should demand repayment of the $29 million it gave the company to create jobs it is now killing.

General Motors has sucked up over $29 million of taxpayer cash in Ontario, thanks to the misguided generosity of Premier McGuinty. This kind of corporate failure shows why corporate welfare is a mistake. These huge subsidies, like the hundreds of millions given to Ford, do nothing to maintain long-term sustainable employment. At best, they delay the inevitable layoffs. At worst, they simply subsidize overly generous wage and benefit contracts for labour and management.

There will be many sympathetic calls to aid those families hurt by impending layoffs. Government should resist this temptation except to ensure current programs for employment insurance are properly funded and allocated fairly. There should not be special treatment.

When other industries suffer from consolidation, change and downturns government rightly hasn't intervened. Note, for example, the telecom meltdown. When companies like Nortel, JDS Uniphase, Lucent and Cisco suffered and shed tens of thousands of jobs nothing was done.

Individuals need to manage themselves and their careers and prepare for a rainy day. In the case of the auto sector, one could see this rainy day coming for a few years. It is not the job of government to intervene to prop up the industry. It may be the job of government to run some transition programs that apply equally to all.

Auto employees are in a tough spot. With hard work, perserverance, and approporiate, fair and equitable government assistance they will get through it; just like all others do when they lose their jobs.

Government should get the money back they gave to GM. This money can be used to pay for transition programs already in place. That way, taxpayers don't end up paying twice - once for jobs that don't exist and again to help workers find jobs that do.

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