“This action follows the automakers’ unacceptable decision to scale back their manufacturing presences in Canada, directly breaching their commitments to the country and Canadian workers,” the government said in a late-night media release.
“This action follows the automakers’ unacceptable decision to scale back their manufacturing presences in Canada, directly breaching their commitments to the country and Canadian workers,” the government said in a late-night media release.
Since there’s a lot of propaganda around slave/no-slave labour from different sides, I’d offer another angle which is easier to verify. Check what percentage of a typical vehicle cost comes from labour. Then from that, check the manufacturing wages in different locations and scale the labour cost by that. That’s will give you the ballpark labour cost advantage between. Then compare that with equivalent vehicle prices. You could do the same exercise for Mexico-produced vehicles too.
Also you should check how the labour conditions are in Mexico. A lot of our vehicles are built there and a lot of the components of our Canadian-built vehicles are made in Mexico. And then nearly all the transistors, resistors and other electronic components in those components are made in China. You might also find that Mexican wages in the industry are significantly lower than those in China.
None of this is to say that we should not care about working conditions. Rather that absolute ethical judgements are practically impossible thanks to our neoliberal free-trade system that created these problems without our consent. We aren’t given the choice between a Canadian-made Ford Mach-e at $60K and a Mexican-made one for 50K. It’s all Mexican-made for $60K. We aren’t given the choice of a $60K, Canadian-made, slave-free-certified Lincoln Nautilus and a $50K, Chinese-made one. It’s all $60K Changan-Ford made Nautilus. No one asks the workers what they want to build in Ingersoll, or Oshawa, or Oakville. So we’re forced to choose between different turds with different seeds in them. Some turds are deadlier than others depending on the year we live in.
PS: One more thing, relevant to the price-wages relationship. Prices aren’t set according to costs. Prices are set to the maximum level where the output times the price produces the highest profit. Whether the cost is 1% or 80% of the revenue. The wages are set to the lowest level possible allowed by the labour market conditions (not the product market), on labour power (union organization) and government regulation (minimum wage, mandatory benefits, union-friendly laws, etc). I used to fall for the narrative that there’s a positive relationship between prices and wages within a firm but that’s just not true. It’s not true theoretically or practically. There’s only a relationship in that wages set a bottom of the price below which the firm would go bankrupt. And that’s no different than any other cost like materials and machines. Above that level, the limit is whatever they can get away with. That’s neatly demonstrated by the lack of difference in price between vehicles made in Mexico, US and Canada even though wages are significantly different between the three.
i agree 100% and im not ignoring the other companies that do it, they are to blame just as much as others. EVERY company producing cars at every step should be paying their workers a fair wage and fair working environments. My point was that the cost of china EVs were really low, whats the calculus that brings their prices so low with accounting for their workers, and should we just be allowing more of the same (or worse idk) or do we do a made in Canada approach? I am of the mind that canada shouldn’t have a big manufacturing base for more simple parts, be we can do more complex work like a automotive factory or engine factory or however its laid out, and import the base materials from our EU partners.
Yeah I get you completely. I used to think it’s labour cost but these days I’m of the mindset that it’s margin stacking and profit maximization on our manufacturers’ end. See this:
I recently looked at the F-150 price over the last 30 years. It’s grown over 5% per year. That’s way above inflation and wages move more or less with inflation. That’s tells me Ford is just increasing the price as they can whenever they can. Now do the same thing for all their sources - Bosch, Denso, Magna, SK (for EVs) etc. If everyone is doing that those margins stack and make Ford’s cost higher. There’s often little competition between suppliers.
Now if you take someone like BYD who makes most of those components in-house they don’t charge themselves margins on their batteries, motors, etc. So their costs are lower. We know that BYD along with the rest of the EV makers in China are in a brutally competitive market. So they can’t charge high prices, leaving the prices close to their costs. Of course they still source components from other firms. They don’t make electronics. But what if those other firms also can’t/don’t profit-maximize due to competition or regulation? When I add that together I think it makes for a better explanation to the price difference given that the differences between labour costs in Mexico, Canada and US produce zero difference in vehicle prices. At least that’s where I am on this one lately. I used to think it’s all down to labour cost before I started digging a bit in wages in different places and how firms set prices. That’s why I encourage people to look into those things.
We absolutely do. That should be the long term goal since factories don’t show up overnight. If the US autos are going back to their own country and scaling back EV production plans, we should get whoever wants to build EVs here. Unifor can handle labour conditions and wages on our end. Taxed direct imports could be useful as a stop-gap under certain conditions since NA autos aren’t getting any cheaper, but I won’t be mad if we say, no-imports, build factories here from the get go.
E: Sorry for the walls of text. I’m trying to explain what’s in my head and it always comes out longer than expected. 😅