Monday, April 13, 2009

Yeah, and guess who's been milking it?


Apart from "Yeah, and guess who's been milking it?", there were so many titles I could have gone with here to introduce this latest inanity from the CAW, of:

Cars a Canadian cash cow: CAW


from the CAW, the very people who chimed in syncopated support of Flaherty's destroying $35 billion of Canadians' savings when the CAW's Jim Stanford opened his tail pipe to vent noxious fumes on income trusts, without even reading the owner's manual which caused him to put transmission oil in the engine block. Titles such as:

(1) Cash cow? Since when do cash cows need bailouts?

(2) Cash cow? I guess the CAW is saying that GM and Chrysler would have made for perfect income trusts.

(3) Cash cow? Is that how GM is paying for all those CAW SPA days?

(4) Cash cow? Don't you mean Cash CAW?


Cars a Canadian cash cow: CAW

Union says GM, Chrysler made $37-billion 1972-2007; urges aid for 'profitable sector'

GREG KEENAN

From Monday's Globe and Mail

April 13, 2009 at 3:17 AM EDT

Chrysler Canada Inc. and General Motors of Canada Ltd. GM-N, the two auto makers seeking a bailout from Ottawa and Ontario, racked up an estimated $37-billion in profit between 1972 and 2007, according to a paper on auto profitability by Canadian Auto Workers economist Jim Stanford.

Automobile manufacturing as a business has generated profits every year in Canada since 1972, except 2002, Mr. Stanford said, with the pool of black ink at GM Canada reaching an estimated $31.75-billion, while Chrysler turned $4.95-billion in profit.

"And even in the years from 2005 through 2007, when the U.S. auto industry slid deeply into red ink, the Canadian industry remained profitable," Mr. Stanford said.

The study shows that assisting the industry is essential "if Canada wants to reap the benefits of this uniquely profitable sector into the future," he said.

Mr. Stanford's analysis of the companies' profits was made by combining data they publicly released before 1996, with figures since then extracted from Statistics Canada data for the whole industry.

It comes as the two governments grapple with how much money to lend GM Canada and Chrysler, or whether to give them any money at all beyond the $250-million Chrysler has received.

The debate over bailing out the companies reached a new level of urgency last week when Ontario Premier Dalton McGuinty said the province's pension insurance plan, the Pension Benefit Guarantee Fund, doesn't have enough money to cover pensions if one or more of the auto makers fails.

If that happened, it would mean workers who helped generate billions of dollars in profits for the companies would be denied compensation they effectively deferred until retirement, Mr. Stanford said.

"It is painfully ironic that the retirees who worked during the auto industry's 'golden age' should now be targeted for major reductions in income and benefits," he said.

GM Canada stopped releasing financial results publicly after racking up a profit of $1.4-billion in 2005.

That was only the second time any company in Canada had reported a profit in excess of $1-billion, although some Canadian banks now report profits of that size in a single quarter.

Mr. Stanford figures GM has posted annual profit in excess of $1-billion eight times since 1972.

GM Canada's $31.75-billion in profit over 35 years "surely ranks GM Canada as one of the most profitable companies operating in Canada over that time period," he said.

David Paterson, vice-president of corporate and environmental affairs for GM Canada, said the auto maker has not been profitable for the past several years in this country.

It has been offered $3-billion in loans by Ottawa and Ontario but has still not reached final agreement on the terms of the loans. GM has been given until June 1 by the two governments to improve the restructuring plan it submitted in February.

Chrysler began receiving a portion of its allotted $1-billion two weeks ago and has been given until May 1 by the Canadian governments to come up with a better restructuring plan and to reach a final deal with Italian auto maker Fiat SpA on a strategic alliance.

5 comments:

Anonymous said...

Can't say I have complete confidence in Stanford's math.

Neville

CAITI said...

Neville:

Stanford doesn't do "math"

Brent Fullard

Dr Mike said...

Maybe if they built a better product????

As an income trust a better product would have been but a few months of regular well-scrutinized accounting away.

Dr Mike.

Anonymous said...

Simply based on the fact that Jim Stanford works for the Globe and Mail and pushes the CAW's agenda - both organizations known liars - this article was clearly meant to line the cages of guinea pigs, hamsters or birds.

What exactly is he trying to do? If GM is that profitable, why would any Canadian tax payer support a bailout?

This part is interesting ... I don't get what kind of a message he is trying to send due to his role in spreading the trust unit lie

"painfully ironic that the retirees who worked during the auto industry's 'golden age' should now be targeted for major reductions in income and benefits," he said.

I guess he does not realize some card carrying CAW members are Trust Unit investors. What a jerk ...

Good choice for the title and use of photo.

Anonymous said...

This is all part of an argument to justify why there should be a government bailout of CAW pensions.

What the Globe article fails to mention is that CAW workers contribute none of their wages to their company pension plans - the whole tab is picked up by the employers.

Is it really fair for the taxpayers of Canada and Ontario to bail out CAW pensions when the workers themselves have not provided a single dime to their pension plans?