Presidents Letters
Ken Lewenza

E Mail Ken Lewenza
CAW National Office: 800-268-5763

CAW and CEP to begin talks on new union

The executive boards of the Canadian Auto Workers and the Communications, Energy and Paperworkers unions have unanimously approved a process to explore the possibility of creating a new Canadian union as soon as mid-2013.

Leaders of the two unions have held preliminary discussions for several weeks, reviewing the current labour relations climate and the challenges facing organized labour, and considering whether the formation of a new Canadian union would help the movement to address those challenges. Now those discussions have been formally endorsed by the elected National Executive Boards of both unions. At separate meetings within the last week, the two boards unanimously approved a "Process Protocol" document. This document sets out the terms of reference and a timeline for union representatives to explore issues related to the formation of a new union.

"Events like the lockout at Caterpillar have made it increasingly obvious that Canadian workers need a stronger, more active, and more innovative labour movement to defend them," says Ken Lewenza, CAW national president. "Our movement cannot afford a 'business-as-usual' approach in light of the attacks we face from both business and government. We need to combine our resources, and use them more effectively, if we are to protect Canadian jobs and push for greater equality in this incredibly hostile economic environment."

"Our goal is to create a new, Canadian union," says Dave Coles, president of the CEP. "We are examining every aspect of our work as trade unions, from organizing to bargaining to political activism. We are working to create a stronger union movement and a better future for workers."

Under the Process Protocol, a representative committee will work over coming months to investigate specific issues related to a new union (including dues and finances, representative structures, and regional issues). It will issue a report on whether a new union is feasible and desirable in time for the upcoming conventions of both unions (August 2012 for the CAW, and October 2012 for the CEP).

Both unions pledged a high degree of transparency concerning the work of the Process Committee, including the establishment of a joint website devoted to the project.

For further information, please contact:

CEP National President Dave Coles (613) 299-5628
CAW Communications Director Shannon Devine (cell) (416) 302-1699

Squeezing the Middle Class

Sociologists have convincingly documented rising inequality in Canada. A lucky few - large business owners, top executives, highly specialized professionals - have captured the lion's share of the meagre gains generated by our troubled economy. Statistics reveal the top one per cent of Canadians pocketed 31 per cent of all new income generated in 10 years. The bottom 99 per cent had to fight over the rest.

Most Canadians are guaranteed nothing by our lean, mean, globalized economy. Even university-educated specialists (like accountants or programmers) have been squeezed by new technology, and by trade rules which allow corporations to outsource any job to the lowest global bidder.

As for hourly workers, their real earnings are no higher than a quarter century ago. Given the productive potential of our skills and technology (both of which are better than ever), this constitutes an enormous economic and social failure. A healthy economy generates mass prosperity. Ours, increasingly, does not.

About the only structural protections most Canadians have going for them are public programs (like health care, education and pensions), and unions (to help equalize their power with employers). Yet these are under attack, too, from the same governments that allow (even glorify) the social irresponsibility of corporations. Governments are cutting the social wage as employers try to slash money wages. They stand by as unions fight for their lives. And they give global companies free rein to take over our resources, and our factories, with no commitments whatsoever to future Canadian interests.

So while the academics may debate the fine points of the income statistics, the overall trend is obvious: inequality is growing and the middle is being squeezed out. Companies feel no compulsion to pay living wages to their workers. And they hold all the cards at the bargaining table - including the "ace," which is their unfettered ability to shut down and move someplace cheaper. Governments have reneged on their responsibility to protect average Canadians.

No better example for this depressing long-run trend could be found than the current dispute at the Electro-Motive facility in London, Ont. Thanks to their productivity, their high skills (including highly specialized welding and assembly techniques), and their union, Electro-Motive workers today are still proudly in the middle. They make good wages, but they're hardly rich. They live decently, send their children to college, retire in security and enjoy good benefit programs in the event of injury or illness. Electro-Motive has a long and proud history in Canada, operating productively and profitably here for over six decades. It is Canada's only locomotive manufacturing facility. It's a crucial industrial asset, at a moment when governments around the world are investing massively in railway infrastructure.

Then suddenly the plant and its workers were confronted with an unprovoked and fearsome attack, after Caterpillar bought the company in 2010. Ottawa didn't even bother reviewing the takeover, let alone attaching conditions. Immediately Caterpillar began building a second assembly plant in Indiana, where non-union workers compete for insecure, poverty-level wages.

Within the year a new plant was also announced for Brazil and more work was shipped to Mexico. Consistent with its reputation for all-out industrial warfare, Caterpillar tabled a list of demands (including slashing wages in half) that is more aggressive and offensive than any I have encountered in my three decades of trade union experience.

We wish dearly that Caterpillar had never bought Electro-Motive. The company's actions are the economic equivalent of a home invasion. And we are infuriated that our governments have done nothing to protect the interests of Canadians. By their silence and inaction, government sides with an enormous, irrespon-sible global corporation that is making record-level profits and whose CEO rakes in $10 million per year, as it sacrifices the future well-being of hundreds of frightened Canadian families.

Some labour-management conflicts are complicated, with both sides wearing some of the blame. Not this one. Caterpillar marched into London, Ont. with one clear goal: destroy the union and eliminate decent pay at Electro-Motive, or else shut it down and leave. Either way, it's one more step toward growing inequality in Canada.

The CAW will do everything we can to resist Caterpillar's immoral aggression against our country. We are backed by widespread community support, a reinvigorated labour movement and moral legitimacy.

At the same time, our willingness to bargain a responsible, realistic agreement with the company is unchanged. There are many proposals that we can entertain; but tossing hundreds of Canadian families into the bottom of the heap is not one of them.

At the end of the day, the union alone can't protect the vision of an inclusive, prosperous economy. Without our governments living up to their responsibility to ensure that the wealth we produce is shared fairly and equitably, our vision for a just society doesn't stand a chance - at Electro-Motive, or anywhere else in Canada.

Health Care Trust ( General Motors)

After two years of tough negotiations and legal work, a settlement has been reached between the CAW, General Motors Canada, and a representative steering committee of GM retirees regarding the creation of a new Health Care Trust (HCT) for GM retirees.

The creation of the HCT was mandated by the federal government during the 2009 restructuring as a condition of the $10 billion in public support which was provided to the company at that time.

Under this system, future retiree health benefits will be paid by the HCT (not by GM). The HCT will be endowed with up-front contributions from GM, which will be invested to generate additional income to support future retiree health payouts (similar to how pension funds operate). A similar HCT at Chrysler was also established as a result of the 2009 restructuring of that company, and is now operational. The HCT will be managed by an independent board of trustees, including experts in health care costs, investment, and actuarial science.

The proposed CAW-GM HCT settlement represents a significant improvement over the initial HCT agreement reached between the CAW and GM in 2009. Thanks to the efforts of the independent steering committee of retirees, GM will contribute hundreds of millions of dollars in additional funding to the trust fund. Back in 2009, the CAW pushed the government to accept $300 million in additional funding for the HCT, above and beyond the government's initial proposed cap.

The joint efforts of the CAW bargaining committee and the independent committee of retirees have resulted in very important improvements in funding for the HCT that will guarantee the large majority of retiree benefits indefinitely, even if GM were to subsequently go bankrupt

A Labour Day message by CAW National President Ken Lewenza: We must set our sights higher

Labour Day has always offered working Canadians a chance to step back and reflect on our collective achievements. Workplace safety rules. Decent wages and benefits. Work-life balance. Equality. Fairness. Even as a child, marching along Labour Day parade routes in Windsor with my mother and father, I've understood this day as a celebration of social progress and collective prosperity, amid the daily struggle for improved worker rights. And the progress we celebrated benefitted all working families - whether in a union or not.

There's no denying this mood has changed in past decades. The increasing hardships that workers face are turning more and more Canadians towards despair.

Today, many of the jobs on offer are unstable and insecure. Over 3 million Canadians are considered precariously employed, and rising. Employers continue to exploit outdated labour laws and in doing so have formed cracks in the foundation of our labour market and given rise to a growing field of unregulated temp jobs, short-term contract work and involuntary part-time jobs. These uncertain jobs are sprouting, like weeds, across the country.

Canada is a wealthy nation, that's for sure. Our national net worth tops $6 trillion (roughly $185,000 per capita) and rising, even as economic storm clouds loom. There's no secret these spoils are enjoyed by our most affluent citizens. In fact, real wages for millions of workers have essentially flat-lined since the mid 1970s, and the earnings gap in Canada is widening.

More recently with the global financial crisis, right wing politicians, business leaders and commentators, aided by the media have been extremely successful in making working people feel responsible for causing the damage. That somehow their ability to enjoy a stable retirement and earn a decent wage (even taking a vacation or two) is selfish.

Many have now lost sight of our need to build a stronger, more inclusive society. Why have we set our expectations so low it now seems not losing is the same as winning? And why have working people turned their anger inwards - buying into the perverse logic that somehow they are the enemy, instead of the power-brokers of our unfair, unsustainable, unbalanced and uncaring global economy?

Before his untimely death, federal NDP leader Jack Layton made an appeal to progressive voices in our nation, to choose love over hate, hope over fear and optimism over despair. And this touched a nerve as tens of thousands of Canadians responded en mass with messages of their own.

All Canadians should feel empowered to turn away from the negativity, fear and despair trumpeted by those who find themselves at odds with the greater good. The wealthy and business elite have convinced us to temper our ambitions, scale down our collective goals for a better world. They've told us that our desire to retire with a decent standard of living is too expensive, our plan for quality affordable child care unattainable, our strong public services unaffordable and that an end to poverty and homelessness is unrealistic.

None of this is true. It is only a matter of priorities.

This Labour Day, let's strive to do better. Let's re-set our collective priorities higher than just maintaining the status quo. Let's not shy away from demanding more - from our employers and our politicians.

As we gather for Labour Day festivities and celebrate our historical accomplishments, let's once again embrace a more creative brand of public policy and a more principled politics - those same tools that enabled us to break ground on revolutionary programs like universal health care, the nine hour work day, workplace democracy and unemployment insurance. And let's do it for the benefit of all, not a privileged few.

As progressives, let's believe once again in the possibility of our ideas - like universal child care, national Pharmacare, electoral fairness, full employment and good jobs, improved public pensions - all of which are well within our reach if we truly commit ourselves to realizing them.

This Labour Day, workers must not only celebrate previous achievements, but set our sights on an agenda for progress to bring about the more just, fair and caring society that so many of us crave.

An Open Letter to NDP MPs and all Canadians

The CAW joins in mourning the loss of Jack Layton, and remembering his social democratic values

(Toronto) - The news of federal NDP leader Jack Layton's passing has deeply saddened CAW leaders, members and staff right across the country, as we mourn the loss of an inspiring political leader and a friend to working people and all those fighting for justice.

Jack Layton had a broad and truly inclusive vision for the country, which he pursued wholeheartedly with enthusiasm and optimism that was infectious. There can be no greater example than the party's success across Canada in the last election, particularly in the province of Quebec.

Jack's steadfast belief in equality and fairness made him an outspoken advocate for the poor, Canadian families, students, seniors and children. What people saw in Jack was a person who cared sincerely about their lives and would articulately speak up in their defence, on Parliament Hill or wherever the situation found him.

He captured our imaginations and encapsulated our hope that indeed as a country, we could do better. He inspired us to believe more was possible.

To NDP Members of Parliament:

Our hearts go out to you as you grapple with the death of a mentor and dear friend. The country is mourning along with you. On behalf of the CAW, we send to you our collective condolences for the untimely loss of Jack Layton.

Jack was an inspiring and unifying political leader, unparalleled in Ottawa in recent memory. Surely he must have ignited in each of you a passion for your community and country.

To be certain, Jack had great momentum through out the last federal election, but his appeal and strength were also rooted in the ideas he espoused. The hope that Jack Layton drew on in the last election is still with you and your party. The NDP is a crucial voice of conscience for Canada. At Jack's passing, your voice of conscience is needed more than ever. Your efforts can and will make a difference in the direction of our country.

The union looks forward to working with whoever replaces Jack as the leader of the Official Opposition.

To All Canadians:

The country has suffered a terrible loss with the death of Jack Layton. Even many of those who never voted for Jack or a member of his party admired his ideas, his tenacity and conviction. He represented the best of Canadian values - fairness, equality, balance, courage and concern for one's neighbour. He was but one human, but his persona was much larger. We saw the best of ourselves in Jack and in his vision what was possible for the country.

Through out Canadian history, the NDP and progressives have made important advances for all citizens, regardless of their political leanings. As we mourn the loss of Jack Layton, we must also reflect on his vision for Canada and how we can endeavour to make some of his cherished ideas a reality.

Among the lessons Jack Layton gave us is the necessity of courage to dream bigger than what others believe to be possible and to pursue these dreams with great determination and passion.

Jack's memory will live on through the tireless work of all Canadians who choose to build a stronger, more equal and just society.

Sincerely,

Ken Lewenza
National President
CAW-Canada

CAW Reaches Tentative Agreement with Air Canada, Picket Lines Come Down

(Toronto) - The CAW reached a tentative agreement with Air Canada earlier today after more than 12 weeks of grueling negotiations with Air Canada.

After the tentative agreement was announced, picket lines were taken down and plans were established for ratification votes over the next two weeks on the new four-year agreement.

CAW President Ken Lewenza said the new agreement is an important achievement for the 3,800 CAW members at Air Canada, who resisted company demands for major pension concessions.

Lewenza said the new agreement covers wages, pensions, benefits and all other key issues in bargaining. But he said the contentious issue of pension benefits for new hires will be sent to arbitration where the union will present the case for continuing a defined benefit pension plan.

The existing defined benefit pension plan remains unchanged until January 1, 2013, when there will be some modifications to the plan. Lewenza declined to provide details of the wage increases until the ratification meetings, but said the wage package was good.

He blasted the Harper government for indicating only a few hours after the strike started that it would intervene with legislation to end it and arbitrate an outcome. "This is an unprecedented intrusion into free collective bargaining," Lewenza said.

Lewenza said the government's intervention was heavy-handed and made bargaining more difficult. He said the federal government's push for back to work legislation is evidence of how it's going to behave now that it has a majority.

"Don't think for a moment that government intervention settled this strike, far from it. It is always better for us to negotiate a contract than to have it imposed and we have a very good record of negotiating collective agreements,' Lewenza said.

Persichilli: CAW's Lewenza leads auto revival

January 2011 Two years ago, the auto industry in Ontario was moribund and few people would have believed that in less than two years the industry could stage such a turnaround. It took the courageous action of two governments - Ontario and federal - to change their policies and, in the case of Stephen Harper's Conservative government, also the philosophy of his party. Subsidizing private enterprise was anathema only a few months earlier, as was throwing billions of dollars into the labour market to fight the recession. Read More

Deeper Corporate Tax Cuts Could Cost 46,000 Jobs, says CAW

TORONTO, Jan. 26 /CNW/ - Cutting the corporate tax rate will cost the country jobs, instead of creating them, says CAW President Ken Lewenza in response to the claims by Federal Finance Minister Jim Flaherty that low taxes will boost the Canadian economy and employment. "All that cutting the corporate tax rate will do is drain money from government coffers," said Lewenza. Read More

Solidarity with Wisconsin Workers

The following is a February 28 letter sent to the AFL-CIO from CAW President Ken Lewenza regarding the working families of Wisconsin, trade unionists and students:

On behalf of the 200,000 members of the Canadian Auto Workers union, I am writing you in support of your struggle to maintain decent working conditions through collective bargaining. In doing so, we know we are standing not only with labour activists but the faith community, human rights organizations, and fair-minded people around the world.

Wisconsin Governor Scott Walker's attack on Wisconsin workers is an attack on all working people, and as President Obama said, it is 'an assault on unions.'

Corporate tax cuts have cost Wisconsin $800 million a year. It is therefore no surprise, that as the financial crisis continues to take its toll, governments are running deficits. Employers throughout North America and around the world, rather than offering to pay their fair share, now will stop at nothing to make workers pay for the massive bailout that went to banks and insurance companies. The very corporate criminals whose fraud and mismanagement cost working families their pensions, their jobs and their homes are now bankrolling politicians whose number one priority is to dismantle the tools with which working people protect themselves and each other.

Working people across North America continue to face terrible hardships, while corporate profit margins surpass all previous records. By eliminating jobs, cutting benefits, reneging on pensions, reducing their contribution to our local services and safety net, and massively cutting their own tax responsibilities, corporate greed knows no bounds.

In the third quarter of 2010, US corporate profits surged to $1.659 trillion-as the New York Times said: "the steepest annual surge since officials began tracking such matters 60 years ago." Yet these corporate windfalls have produced neither jobs for Americans nor tax revenue for municipal or state governments. In fact, the U.S. Federal Government Accountability Office reports that despite $2.5 trillion in corporate sales between 1998 and 2005, more than half of U.S. companies paid not a penny in US income tax for as much as two years.

Yet, when times were tough for corporations, governments of all stripes happily handed over hundreds of billions of dollars to corporations. Globally, trillions were funnelled to corporations.

The money they gave away was earned by working people. This is money we entrust to state and municipal governments to provide good services, decent jobs, education and a strong social safety net for our communities. Because of these giveaways, they are now telling us that the cupboard is bare and there is no money for education, for services, for decent jobs and pensions. This is a betrayal.

In response the resistance of Wisconsin trade unionists, students, community members and workers of all stripes has been magnificent. Your determination and growing numbers of protesters is tremendous. This weekend's demonstration of up to 100,000 protestors must send shock waves to corporate power just as similar demonstrations in the Middle East have shaken those with dictatorial power to their core.

Your strength, dignity and determination in the face of these attacks have been truly inspiring. You are proving that when working people and their families stand together, we give confidence to others across the country and around the world. Indeed, recent polling shows that the vast majority of Americans now oppose Republican measures that are designed to strip workers of their basic right to bargain for fair and decent working conditions.

Here in Canada, working people are facing down our own politicians and employers who are intent on implementing so-called austerity measures with the same anti-social agenda. Your powerful movement has buoyed and strengthened our own resolve to resist similar attacks at home. Sisters and brothers, we are saluting your courage, celebrating your solidarity, honouring your growing strike wave, and-crucially-building our own resistance to the global austerity agenda here in Canada. In this common struggle, we are with you every step of the way.

Federal Budget Falls Far Short of Need for Recovery, CAW President says

(Toronto) CAW President Ken Lewenza called the newly released federal budget disappointing, and said it contains less than a handful of measures to support workers and the economy. Lewenza did commend the government for introducing improvements to the Guaranteed Income Supplement, but said it wouldn't have happened without NDP leader Jack Layton pushing the government on the issue.

Without the leadership of Jack Layton, our seniors would have been left out in the cold by this government once again," said Lewenza. Lewenza deplored what he called the deceit and anti-democratic tendencies of the Harper Conservative government, including the current budget which included only small offerings. "The Canadian people deserve better than what we’ve seen come out of this Parliament and this government over the last number of months. This budget is not about political integrity and staying the course, but pre-election campaigning."

He also underlined the need for ongoing infrastructure support, not just as a job booster when the economy is on the skids. "Our country's infrastructure, including roads, rail systems, public transit, telecommunications and other areas cannot be ignored the bulk of the time and still be expected to function at full capacity - these entities need ongoing attention from responsible government."

Other governments in the developed world are attentive to this fact and their economies reap the benefits on an ongoing basis,” said Lewenza. He said that the country requires a formal infrastructure investment program from the federal government. Lewenza also warned that the best way to pay down the deficit is to grow the economy, as opposed to cutting spending, which will stall job growth. One major area where the budget falls far short is support for training and unemployed workers, said Lewenza.

"The economy is still sputtering," said Lewenza. Although the actual number of jobs lost since the recession began have been recovered, they have largely been in the form of part-time and temporary employment, which sets a precarious foundation for the economy.

Lewenza had several suggestions to strengthen Employment Insurance and supports for unemployed workers. He recommends extending the EI benefit period, as long as national unemployment rates exceed six per cent, which would still be high by historic standards. There is also a case to be made for revamping the EI Training Benefit to include more than just tuition support so that more people can use the program to transition into opportunities in new fields. He also said that across the country, the number of qualifying hours should be set to a uniform 360 hours country-wide, especially in light of what he called the "bad jobs recovery" characterized by temporary, part time employment. Lewenza also voiced his concern that Finance Minister Jim Flaherty failed at another opportunity to improve the Canada Pension Plan, as called for by two of the three opposition parties, said Lewenza. He said that it's not agreement from the provinces that's missing, but the will of the federal government to help Canadians. Lewenza called this lack of action even more offensive given that the government has now eliminated the mandatory retirement age among federally regulated employees.

Ford Exec Compensation Shows No Lesson Learned from Recession, CAW President says

(Toronto) CAW President Ken Lewenza is reacting with frustration to today's news of exorbitant compensation at Ford Motor Company for Chief Executive Officer Alan Mulally and Executive Chairman Bill Ford. Mulally received $56.5 million in stock, and Ford $42.4 million in shares for the automaker's turnaround.

"It is obscene for any individual executive to take home many tens of millions of dollars in personal compensation as a result of the performance of an entire large corporation,' said Lewenza. "It is this kind of individualistic greed and excess that contributed to the recent bubble collapse in the U.S. and the resulting global recession. Have we learned nothing from that experience?"

Lewenza said that these inflated compensation packages are particularly offensive given the fact the company will close its St. Thomas facility later this year and already have approximately 1,300 workers in Canada on lay-off.

"Autoworkers, and the communities in which they live, have experienced incredible loss, insecurity, and belt-tightening in recent years. When Ford closes its St. Thomas plant later this year, another 1,300 hard-working families will be devastated.

How Ford's board of directors can pay out $56.5 million to one individual, while this company is jeopardizing the future of thousands of Canadian families, is simply beyond me."

Lewenza calls for doubling of CPP

The head of the Canadian Auto Workers union is the latest figure to call for an overhaul of the Canada Pension Plan.Union president Ken Lewenza told CAW council members in Port Elgin, Ont., Friday that he supports a proposal to double benefits from the government-run pension plan.The issue of pension reform has gathered steam in recent months with the high-profile collapses of numerous private pension plans. In December, Finance Minister Jim Flaherty met with his provincial counterparts in Whitehorse to discuss ways of overhauling the system.At the meeting, some provinces were in favour of creating a second, complementary system to supplement the CPP, while others argued simply putting more money into the existing system is the wisest course. Ultimately, no consensus was reached but on Friday, Lewenza came out in favour of a proposal to double benefits from the government-run pension plan. Speaking at a meeting of the union's parliamentary body, Lewenza lobbied to gradually increase workers' contributions to the CPP by approximately 58 per cent over seven years.

Read More

The high price of foreign control

U.S. Steel lockout illustrates how foreign owners bully workers, communities and Canada. - Editorial Opinion

Canadians just undertook a high-profile and timely national debate about the costs and benefits of foreign control of our major corporations, culminating in the federal government's decision to block the proposed takeover of Potash Corp. But the issue of foreign control is not going away.

Indeed, in the weeks since the Potash decision, two other foreign corporations have demonstrated through their actions exactly why Canada needs a very different approach to regulating foreign investment. U.S. Steel locked out its workers in Hamilton, continuing a ruthless drive to suppress compensation and pensions here in Canada. And the Brazilian mining giant Vale dealt a body blow to Thomson, Man., by announcing closure of the former Inco smelter there - destroying the lives of hundreds of families.

Those are concrete manifestations of exactly why so many Canadians, myself included, are concerned about the foreign conquest of our major businesses.

Incoming foreign direct investment has grown dramatically in Canada in recent years, rising from 20 per cent of our GDP in 1994 to 36 per cent today. That's the highest level of foreign control since the Second World War. Three hundred billion dollars of foreign investment surged into Canada in the last decade, like an economic tsunami. Over half was concentrated in our mining, oil and gas, and primary metals sectors. Canada lost corporate icons - such as Stelco, Dofasco, Inco, Falconbridge and Alcan - whose presence was so central to our historical development.

If foreign takeovers actually resulted in the installation of new productive capital in Canadian workplaces, that would be one thing. We could then benefit from new equipment, technology or marketing opportunities. But the actions of U.S. Steel and Vale give the lie to that hope. They've been shuttering or idling strategic Canadian capacity in many communities, including Hamilton - all in the interests of reducing excess capacity, selling assets to pay down debt and intimidating Canadian workers.

Canada incurs many costs when key productive assets are sold off to foreign giants. We incur a long-run liability for the payment of interest and profits to the foreign owner; dragging down our balance of payments (by around $40 billion this year). We lose the jobs that result from the presence of head offices. Takeovers have also contributed to Canada's visible deindustrialization, since foreign owners are interested only in our resources and bulk commodities - not in developing Canada as a diversified, sophisticated nation.

Another key consequence of takeovers is that they reposition productive Canadian assets, reducing them to mere cogs in a bigger global machine. Key productive jewels such as Stelco or Inco, which once stood on their own feet, are suddenly vulnerable to the bean-counting of foreign financial engineers. Sure, we had our ups and downs in the Canadian steel and resources industries over the decades, but the Canadian facilities always maintained a critical mass - and we always knew they would still be there at the end of the next roller-coaster cycle. Now we can no longer have that confidence. Foreign parents have no qualms about shutting Canada right out of the picture, if cost calculations or head-office political concerns push them that way.

Of the many failed takeovers we've allowed in the past decade, the U.S. Steel case may be the most infuriating of all. It flaunted sombre commitments to preserve Canadian jobs and production, before the ink was dry on the deal. It threatened workers - first at Lake Erie, now in Hamilton - with the loss of their livelihoods, for refusing to accept corporate extortion.

The humiliating failure of our federal government to enforce the original net-benefit deal with U.S. Steel proves that those backroom arrangements, cooked up between foreign tycoons and Ottawa bureaucrats, are not worth the paper they are printed on.

What's happening in Hamilton today is nothing less than an affront to Canada's national status as a serious, developed country. It's not just the members of Local 1005 that are being bullied; it's our whole country. The Investment Canada regulations must be scrapped, and replaced with a genuine law that allows us to put the right conditions, backed up by meaningful sanctions, on those foreign investments which genuinely enhance Canada's economic interests.

And if U.S. Steel won't use its Canadian facilities to produce the output and jobs we need, then those assets should be given to someone else who will. Newfoundland's Premier Danny Williams proved, in his showdown with Abitibi-Price (when it shuttered the community of Grand Falls), that a government has both the responsibility and the ability to stand up to corporations which disrespect their responsibility to the communities where they do business. Let's see our government do the same thing with U.S. Steel.

Ken Lewenza
National President of the Canadian Auto Workers

A Good Investment for Canadians

Editorial Opinion, By Ken Lewenza November 2010

The initial public offering (IPO) of shares in the new General Motors was a roaring success in financial terms. The issue was oversubscribed, allowing the company to boost both the number of shares offered, and their price. And then the share price climbed another 4 percent in its first day of trading.

We learned long ago, however, that what's good for General Motors is not necessarily good for the whole country. So what does the IPO, and the resulting sell-off of a portion of government shares in the company, mean for taxpayers, for workers, and for Canada's economy? This is where we need to dig below the financial hype, and focus on what ultimately matters: GM's real production, and the tens of thousands of Canadian jobs that directly and indirectly depend on this company.

The successful IPO will contribute to the continuing repair of GM’s public reputation – not just with financiers, but with consumers. It is clear that GM's products (including Canadian-made successes like the Equinox, the Impala, and the Camaro) are hitting a chord with journalists and car-buyers alike. The IPO further enhances public confidence that GM is here for the long-term, and that can only help sales down the road.

Much commentary has focused on how quickly the governments that rescued GM will get their "money back." In Canada"s case, the company has repaid $1.3 billion in loans to the federal and Ontario governments, who will also reap over $1 billion from the IPO. That’s about one-quarter of their stake in last year's rescue.

However, the financial return to governments is already much better than that. First of all, the IPO has demonstrated that the governments' remaining shares have legitimate value. Following standard fair-value accounting procedures, both governments should book investment gains resulting from the IPO on their total shareholdings, not just on the shares they actually sold. Every investor knows that you don't have to sell something, in order to recognize its value.

On that basis, Canadian governments have won back about 80 percent of what they put into the company: counting the repaid loans, the shares sold last week, and the market value of their remaining shares. If GM shares appreciate another $10-12 (which is almost certain, if North American vehicle sales continue to gradually recover), then the governments will have recouped their investment. If shares go even higher, then governments make a profit.

But this does not even constitute the government's total fiscal net benefit. Remember, the goal of the rescue was to preserve 50,000 or more auto and related jobs (according to Finance Minister Jim Flaherty's own budgetary estimates). Those jobs were in jeopardy, at the gravest moment of the financial crisis. The fact that 50,000 Canadians continued to work and pay taxes, instead of collecting EI benefits, boosts the net fiscal position of the two governments by at least $2 billion per year. So in economic and social terms, more than just financial terms, the rescue was both necessary and successful.

Now that GM is getting back on its feet, governments should be in no rush to sell, for two reasons. First, flooding the market too quickly with government shares would drive down their resale value. But more importantly, there’s a sound economic case for preserving a government equity share in the long run.

GM’s presence in Canada was reinforced through last year's rescue effort, thanks to Ottawa's success in negotiating a "Canadian manufacturing footprint." Canadians put up a share of the rescue money proportional to GM's manufacturing activity here. But in return, GM committed to maintaining that proportional share of production moving forward. So long as Canadian plants remain productive and profitable (which they clearly are), this solidifies Canada's auto industry to an extent that hasn't prevailed since the Auto Pact.

Home governments hold long-term equity stakes in many other automakers, such as Lower Saxony’s share of Volkswagen, or France’s holdings in Renault. Japanese and Korean producers are similarly buttressed by long-term injections from national development banks and other public capital. These public stakes do not prevent those companies from being global in scope, and innovative and flexible in their operations. But they do keep these companies “grounded,” protecting a home base that continues to serve as the core of their operations.

In Canada's case, this is especially important since there are no automakers headquartered here; we are 100 percent dependent on decisions made in foreign head offices. Maintaining a small but pivotal public ownership share in GM and Chrysler (whose Canadian operations are also vital) would help leverage and protect Canada's foothold.

Of course, free marketeers will howl about creeping socialism. They are the same naysayers who denounced the rescue effort in the first place, arguing that government should let GM and Chrysler collapse. In reality, government intervention not only saved both companies from extinction, it also laid the groundwork for a more stable (albeit smaller) Canadian automotive footprint moving forward. Let's learn from that lesson, and make sure we keep a fair share of this vital industry for decades to come.

Ken Lewenza
National President of the Canadian Auto Workers

Enough is enough, CAW says

Editorial Opinion, By Ken Lewenza October 26th 2010

It's been two years since the recklessness and greed of the financial sector plunged the world economy into recession and cost millions their jobs. Now we face stark choices about the kind of future we want.

With high unemployment and a weak global economy, somehow now it's all about cutting. Employers worldwide are telling workers to cuts wages and governments say we need to cut social programs. They are counting on workers joining this retreat from progress, but many are saying no.

Consider the recent events in Britain and France. And in Canada 15,000 workers in the auto parts sector are gathering on Oct. 27 in demonstrations at more than 100 workplaces to defend good jobs in our communities and say: Enough is enough. Locally, this will include workers at Lear, Cooper Standard, Ventra Plastics, AG Simpson, CPK Interiors (Guelph Products) and many others who will demonstrate outside their workplaces at lunch time.

Canada’s auto parts industry has been hard hit for years by unfair trade, a high dollar and, most recently, the global financial crisis and crash in auto sales. Although workers did not cause these problems, too many companies, auto executives and governments continue to demand we give up more. But gutting our pay will never address these problems. Workers have already paid the price-through cutbacks and massive job losses—for a mess we did not create.

A job in an auto parts factory is hard work, and workers deserve a decent standard of living. The average pay is about $19 per hour - slightly below the average for all employees in Canada.

On Oct. 27, we're sending two strong messages. First, we're reminding the auto assemblers that workers have been part of the solution throughout the recent crisis. We didn’t re-negotiate our agreements with the assemblers so they could relentlessly drive down conditions for parts workers. We will fight to keep work in our parts plants, and for our jobs.

Second, we’re saying, "stop pushing" to auto parts employers. We will work to secure investment and build high-quality and productive workplaces, but we are not going to cut wages or pensions, or sign two-tier agreements with permanently lower conditions for the next generation. We did not go down that path during the worst of the financial crisis, and we are not going to now.

The very existence of much of the auto industry was at stake last year. It needed short-term relief just to survive, and governments around the world stepped in. In Canada, our governments understood that a half-million jobs were on the line. But government support was meant to save good jobs, not help turn them into bad jobs.

Profitability is now returning to the industry. And auto production is up strongly in Canada - by two-thirds so far this year. Forecasts expect Canadian production to return to pre-crisis levels within two years.

During the turbulence of the past few years, auto parts workers provided painful cost savings through wage freezes and cutbacks to benefits, work rules, and time off.

The success of our parts industry is based on its highly skilled workforce, high productivity and top-level quality. Our production costs are in line with other advanced auto-producing regions. Arguments that we should follow a low-wage path in order to compete with Mexico and China are absurd – we need to continue to invest in technology and productivity instead. Our goal is progress for workers around the world - not a race to the bottom.

We also need to focus on the real problems in the industry. Auto trade remains a one-way street, with offshore imports reaching a record high of 26 per cent of the market last year, while we send nothing the other way. The solution is managed and balanced trade, not more one-way free-trade deals.

To make matters worse, the Canadian economy has been too closely linked to oil, making our dollar soar, which is pricing many manufactured goods out of their markets. We need policies that will encourage a lower, and more stable, dollar. And we need sustained industrial policies aimed at growing the auto industry. The tools are available, and governments must use them.

Rather than focus on these crucial issues, however, it is likely that in the months ahead an auto parts employer will test our resolve. We don't want confrontation, but we mean what we say. We will mobilize all our resources to resist employer demands—demonstrations, occupations, plant shut-downs, and refusing to handle disputed auto parts in our assembly facilities.

Seventy-five years ago, the first Canadian auto parts workers joined our union. They were looking for progress. While we don't know where today's efforts will take us, we do know what the future will look like if we don’t fight back. And as employers and governments increasingly tell all of us to go backwards, that's an idea certain to catch on.

Don't forget the elephants

Special to The Windsor Star
24 March 2010
Windsor Star

Why is it that when there are elephants in the room some people prefer to ignore them? In his March 18 article Tracing the Road to Ruin, Chris Vander Doelen wonders if we could go back in time to 1999 could we have prevented the disaster that befell the auto industry?

In his speculations about what could have been different, he neglects to name the elephant in the room. And that is government leadership, or in this case the lack of it.

In the late '90s when auto companies were recording record profits, the CAW was trying to convince both levels of government to look behind the short-term, rosy glow to the deepening fault lines we saw spreading beneath the sector. But to no avail.

When Chris looks back to wonder if things could have been different we were actively lobbying government to do what other countries were doing on the policy front -- to limit imports, to manage the currency and to adopt active industrial policies the way our competitors such as Japan, South Korea and China were, and still are, doing.

When Japan filed a case against Canada with the World Trade Organization that led to the dismantling of the Auto Pact, as happened in 2001, we were calling on the government to vigorously contest the ruling.

Instead the government's ideological commitments blinded them to the fact that other countries were not playing by the same free trade rules that Canada uncritically endorsed.

Instead of coming to the defence of those communities dependent on auto (as other countries routinely do) Canada shrugged, and helped set the stage for the job loss and hardship that my union predicted would result.

When Chris looks back to wonder what might have been different, he neglects those factors which actually precipitated the bankruptcies of General Motors and Chrysler.

How can we so soon forget the financial collapse of 2008 and the greed, speculation and outright fraud that led to the Great Recession?

The Wall Street virus quickly spread to the rest of the economy. Month after month, the news got worse. Vehicle sales were down 32 per cent in October, 37 per cent in November, 36 per cent in December compared to the year previous and the companies were soon up against the ropes.

If Chris is still wondering what could have been different, it might be useful for him to trace some of the causes of the financial debacle that has ruined so many workers' lives.

How it was that in 1999 the U.S. Congress passed legislation to ensure that the toxic derivatives market would remain outside the realm of public oversight and accountability.

In the years following that legislation, the credit default swaps market which fuelled sub-prime mortgages grew 6,700 per cent to a staggering $62 trillion.

Bankers and speculators got filthy rich before they brought the whole house of cards tumbling down. It was that activity that caused the collapse of Wall Street and then collapse of auto sales as the Great Recession hit Main Street.

Like Chris, I too spend time thinking about what could have been different. And every day when I meet with unemployed workers and those who are still losing their jobs, I am even more committed to try to make things different for the future.

Chris would rather ignore the elephant, opting instead for the knee-jerk reaction of blaming workers. That is his prerogative. It's too bad.

Ken Lewenza is CAW National President.

Few sectors were as hit as hard by the recent financial crisis as the auto industry. Our members and their families paid a steep price for the financial sector's greed and recklessness. Thousands lost their jobs, some lost their severance, and too many are now running out of EI. Governments have failed to protect the casualties of the great recession.

As we try to pick up the pieces, there are now some indications that financial and economic conditions have stabilized. Economic growth is slowly rebounding, but there are still many question marks. What will happen if governments, obsessed with deficits, decide to slash public services? Will a new debt crisis spark a new panic? Will a new financial bubble emerge? Any of those factors could easily throw us right back into recession.

And even in a best-case scenario, it will take many years before the benefits of recovery trickle down to the workers. Unemployment will remain high (over 10 per cent, if we count discouraged workers and other "hidden" unemployed). Workers everywhere remain under constant threat of job loss.

In the auto sector, there have been some glimmers of good news. North American auto sales are bouncing back a bit. Sales could hit 12 million units in the U.S. this year. That's still low by historical levels, but much better than last year's disastrous 10 million.

Rebounding sales are sparking some new work. GM is adding work in Oshawa; CAMI hired a third shift in Ingersol; the third shift at Chrysler's Windsor plant miraculously survived the downturn; and Ford's Oakville operations continue to ramp up production. (In Ford St. Thomas and GM Windsor Transmission, on the other hand, the axe is tragically poised to fall.) Having survived the crisis, and with major competitors having problems of their own, the Detroit Three might even be able to rebuild some of the market share they have lost.

Conditions remain very tough in components and parts. Ford's engine works in Windsor are still battered by layoffs, as the company continues to restructure its engine offerings. And independent parts producers are more aggressive than ever in trying to attack workers and gut our contracts.

On the whole, our members have endured incredible pain through the 2009 crisis - but we have survived. So this is a good time to pause and review where we stand, after the meltdown. What were we able to preserve? And what threats do we face in the future?

With hindsight we can be very proud of what we were able to defend, through the worst crisis in the North American auto industry's history, with two of the Big Three filing for bankruptcy protection:

Our contract: Despite government-ordered special negotiations, we protected our base wages, our pensions (even at GM, with its huge pension deficit), and our retiree benefits. We can be very proud of what we defended.

Our remaining jobs: Since the bankruptcy filings (and the temporary closure of Chrysler plants in June), about 5,000 auto jobs have been recreated: half in assembly (where employment now stands at 36,000), and half in parts (which suffered even worse in the meltdown). This slight rebound is small comfort, considering we lost 50,000 auto jobs in the last five years - but for now, anyway, the bleeding has stopped. Crucially, no new Canadian plant closures were announced by GM or Chrysler during their restructuring. In the U.S., in contrast, several additional plants were closed through the restructuring.

Canadian manufacturing footprint: One benefit of the government's involvement in the restructuring has been the enforcement of a Canadian footprint on the operations at GM, CAMI, and Chrysler. For the foreseeable future, these companies will be required to keep a proportional share of their total North American production in Canada. This was the government's guarantee that the companies wouldn't "take the money and run." It was a lot tougher to win a similar arrangement with Ford, since the company didn't take government money; but in the end we did win a commitment from Ford to proportional Canadian production. For the first time since the Auto Pact was abolished, therefore, each company committed to keeping a "fair share" of production and jobs in Canada. That is a foot in the door for us, to challenge the usual assumption that you must compete against the lowest bidder for whatever jobs you can hang onto. Indeed, we need to revitalize this crucial idea that every country deserves a fair share of auto jobs.

We cannot be too optimistic about where the Canadian auto industry is now heading. We face some incredible long-run threats and challenges, and we can’t afford to be complacent. This is a good time for all CAW leaders and activists, from the national to the shop floor, to start planning for the fights we will face in the coming years.

As always, that fight will occur in two main places: at the bargaining table, and in the political arena.

In bargaining, we need to start gearing up now to prepare and mobilize our members for 2012 bargaining. I am sure the companies will demand further concessions, despite the industry's recovery - always justified by global labour cost differentials, their still-precarious financial situation, and so on. We must be sure that every CAW member at the Big Three is ready to oppose those arguments. And ready to fight for a decent contract with decent improvements.

Economic developments will make our bargaining tough. The Canadian dollar is still far too high (driven up by financial speculators and the tar sands boom out West). A high dollar makes us look unnaturally expensive, compared to other countries. Also, while the Big Three are compelled for now to respect the Canadian manufacturing footprint, that guarantee won't last forever (unless we win a sensible new auto policy for Canada). Once the companies pay back all the government money (this won't happen until late in this decade, at the earliest), then the footprint will no longer bind them. In Ford's case, the footprint is only in own contract, and hence expires in 2012. Renewing that commitment will be a crucial priority for us in 2012.

These economic challenges make our fight in the political arena more important than ever. Our governments made an enormous financial investment in this industry. So for the benefit of Canadian taxpayers, not just auto workers, we must fight to maximize the long-run value of this industry to Canada. This means implementing a sensible new auto strategy: one that ensures that North America, and Canada, retains a fair share of these valuable, high-wage jobs long into the future. The strategy will require measures to address one-way import flows (Canada's auto trade deficit soared to an incredible $14 billion last year), investments in greener auto technologies, and maximizing Canadian parts content in the vehicles we build.

Governments came through last year, fearing the huge consequences if the auto industry collapsed altogether. Now we have to push them hard to take the next step; they need to implement a policy that can support this industry into the future. We'll have to take up that fight, just as we fight against concessions at the bargaining table.

In summary, while I am pleased with the stabilization of auto sales and the glimmer of good news that has been experienced in the last few months, I am still deeply worried about the challenges facing our Canadian industry in the longer term - and troubled by the pain so many of our members and their families continue to experience. Moreover, globalization, currency speculation, and the continuing failure by governments to implement a longer-run auto policy, all mean that our jobs remain at risk. Thank you for supporting your union during the last incredible year, and please join me as we prepare for the next stages of our fightback.

In Solidarity
Ken Lewenza