- GM Canada, Chrysler Canada and Ford Canada Request Loans
- Why is the Auto Industry in Trouble?
- Job Losses
- CIBC Class Action Overtime Suit
- Smaller Pay Increases
- Pension Plans and the Financial Crisis
- Provincial Labour Mobility Agreement Signed
- Canadian Crown Corporations Board Practice
- A Case for Business Action on the Socio-Economic Determinants of Health
- Immigrants Response to Labour Demand in Alberta
- Firm Turnover in the Canadian Retail Sector – the Wal-Mart effect
- New Business Dynamics Statistics from the U.S. Census Bureau
- Book of the Week
The big three automakers in Canada are seeking money from the Canadian government to help in restructuring. Although Parliament is suspended the Cabinet is still functioning and could provide funding without approval from Parliament. Meanwhile in the United States the bailout will be voted on by Congress today. The bill gives $15 billion in loans and assigns the distribution of the loans, approval of expenditures and restructuring plans to the "President's designee."
The University of Toronto’s Archive of Expert Opinion has an article titled, Why is the auto industry in trouble? one-on-one with Johannes Van Biesebroeck, U of T economics professor, by Anjali Baichwal.
EXCERPT: “Q. How will a bail out help the industry? Isn’t it just a short term solution?”
“A short term bailout for the auto sector is inevitable. If the U.S. provides one, Canada will have to follow. A short term bailout will address short term credit problems by providing some temporary cushion for suppliers. But there’s also talk about subsidies for assembly plants that do stay open. In the long term, governments on both sides of the border will have to look at the plants that are going to be sustainable and reliable to stay open for the long term. Pickup truck plants are not automatically unviable – they still outsell hybrids more than 20 to 1 – but we might not need as many as currently exist. The bottom line is that the government is being very explicit that to keep things going for the next year, they’re going to have to provide some money, but then do a whole rethink about the next 10 years.”
Statistics Canada’s Labour Force Survey for November 2008 reported the highest employment declines for Ontario at 66,000, affecting male full-time workers 25 and over the most, and for Nova Scotia 4,400. Employment remained relatively stable in the other provinces. The manufacturing sector had a net employment drop of 38,000, bringing manufacturing declines to a total of 388,000 since the peak in 2002. In Ontario, the employment declines in this sector totaled 42,000. In the United States the Bureau of Labor Statistics reported that employment fell by 533,000 in November, following declines of 403,000 in September and 320,000 in October.
A certification hearing that will decide if a class action suit against CIBC will go forward is scheduled to run throughout this week in an Ontario court. It is a $600-million class action suit that claims Dara Fresco, a teller in the bank, was required to work unpaid overtime. Companies such as KPMG are attempting to settle overtime suits without going to court.
According to Morneau Sobeco’s 60 Second Survey almost fifty per cent of employers surveyed will adjust planned pay increases downward. The survey was based upon 168 employers across Canada.
The Globe and Mail has featured an excerpt from Keith Ambachtsheer’s chapter in, The Finance Crisis and Rescue: What Went Wrong? Why? What Lessons Can Be Learned? recently published by Rotman/UTPress. The chapter titled, “Pension Management: Looking Across the Abyss: Pension Design and Management in the Twenty-First Century” looks at the flaws in the structure of both defined benefit and defined contribution plans.
Canadian federal, provincial, and territorial Ministers responsible for Internal Trade endorsed amendments to the Agreement on Internal Trade Chapter on Labour Mobility that will allow full labour mobility, cross-country, beginning April 1, 2009. This means that professional and occupational certifications obtained in one province or territory will be recognized by all other provinces and territories.
The Conference Board of Canada has released a report titled, Board Practices in Canadian Crown Corporations—2008. The report summarizes the results of the Conference Board’s biennial survey of the compensation, composition, and practices of Canadian Crown boards. It highlights the work being done by Crown corporations in the area of corporate governance.
Report, December 2008 (19 pages, PDF) may be downloaded by the University of Toronto community after registering for a Conference Board e-Library account. (scroll down to find title)
The Conference Board of Canada has released a report titled, Healthy People, Healthy Performance, Healthy Profits: The Case for Business Action on the Socio-Economic Determinants of Health. The report makes the case that employers and businesses should take action on the socio-economic determinants of health because of the benefits such action will have for the health of Canadians and the positive impact it will have on the organization’s performance and profits. In addition to offering examples of successful initiatives already taken by Canadian and international firms, the report provides practical guidance and principles of success to businesses that may take action.
Report, December 2008 (64 pages, PDF) may be downloaded by the University of Toronto community after registering for a Conference Board e-Library account. (scroll down to find title)
Statistics Canada has released a research paper titled, Internal Migration of Immigrants: Do Immigrants Respond to Regional Labour Demand Shocks? by Yuri Ostrovsky, Feng Hou and Garnett Picot. The key finding of the study, based on a unique dataset of administrative and immigrant records, was that immigrants responded more strongly than non-immigrants to the recent economic boom in Alberta. The study also found a great deal of heterogeneity in the magnitude of the response across different regions and for different categories of immigrants.
Statistics Canada has released a research paper titled, Firm Turnover and Productivity Growth in the Canadian Retail Trade Sector. The paper examines firm turnover and aggregate productivity growth in the retail trade sector in Canada. The study found that there is considerably more firm turnover in the retail sector than in the manufacturing sector and more of it comes from entry and exit. Contrary to the manufacturing sector where only part of overall productivity growth comes from firm turnover and the re-allocation of resources from the less to the more productive, all of the aggregate productivity growth comes from this source in the retail sector. This suggests that the much-discussed Wal-Mart effect on retail sector productivity mainly comes from the Wal-Mart-created competitive pressure that shifts market share from those exiting and declining incumbents, to entrants and growing incumbents.
The new Business Dynamics Statistics are a product of the Center for Economic Studies of the U.S. Census Bureau. The annual series describes establishment-level business dynamics providing researchers with a tool to gain insight into the dynamics of a changing economy. The BDS series provides annual statistics for 1976-2005 by firm age and firm size. Annual files are also provided at the state level, for Standard Industrial Classification sectors and for the economy as a whole. The BDS shows that the fraction of employment accounted for by business startups in the U.S. private sector over the 1980-2005 period is about 3 percent per year. This exceeds the 1.8 percent average annual net employment growth. This pattern implies that job destruction exceeds job creation at existing businesses and highlights the importance of business startups for job creation in the U.S. economy.
Who Really Made Your Car?: Restructuring and Geographic Change in the Auto Industry, by Thomas Klier and James Rubenstein. Kalamazoo, Mich. : W.E. Upjohn Institute for Employment Research, 2008. 425 p. ISBN 978-0-88099-333-3 (pbk.)
The typical response to the question posed by the title of this book is likely to point to a well-known carmaker, either one of the Detroit Three (GM, Ford, or Chrysler) or one of their European or Asian competitors (BMW, Volkswagen, Toyota, Honda, etc.). Yet parts suppliers now account for as much as 70 percent of the value added in the manufacture of motor vehicles. In addition, employees in the parts industry outnumber final assembly workers by nearly four to one. Companies such as Visteon, Denso, Robert Bosch, Dura, GKN, Johnson Controls, Autoliv, and many more are not only increasingly responsible for producing significant portions of motor vehicles, they are also becoming more likely to design and engineer those parts as well. Therefore, the answer to “Who Really Made Your Car?” now comprises a long list of parts companies, big and small, whose facilities may be located next door to the assembly line or on the other side of the world.
About the Authors:
Thomas Klier, Federal Reserve Bank of Chicago
James Rubenstein, Miami University
This publication is protected by Canadian copyright laws and may not be copied, posted or forwarded electronically without permission.
Questions or Comments: contact us at email@example.com.
Copyright © 2008 Centre for Industrial Relations and Human Resources, University of Toronto. All rights reserved.