Alberta Deficit Created By Auto Bail Out

Not only is the deficit in Alberta not about overspending on infrastructure, which had been put on a decade long hold as the result of the cuts and privatization of the Klein era, but because of royalty holidays to big oil and the corporate bail out of the Auto-Industry.

The final chapter in the stormy marriage and divorce of Daimler-Benz AG and Chrysler Corp. will provide a $1.5-billion (U.S.) windfall to the deficit-ridden federal, Ontario and Alberta governments.

Daimler AG as the maker of Mercedes-Benz cars is now known, will pay the three governments $1.5-billion to settle a dispute over 11 years of Chrysler taxes that began in the mid-1990s and lasted until Daimler unloaded the No. 3 Detroit auto maker in 2007.

The bailouts of Chrysler and General Motors Corp., which total about $12.7-billion, were partly responsible for the record-setting deficits the two governments racked up to fight the recession. Those governments are still fighting to stem the red ink.

The federal deficit for the April-December, 2010, period was $27.4-billion (Canadian). Ontario is on track to post a deficit of $18.7-billion in the fiscal year that ends March 31. Alberta, meanwhile, tabled a budget last week that forecasts a deficit of $3.4-billion for 2011-12.

So not only did Chrysler get tax breaks from the Liberal and Conservative Federal governments and then get bailed out but they avoided paying taxes for over a decade.

Corporations don't need tax breaks, they take them anyways whether you give them to them or not.

If a Canadian fails to pay their income tax over ten years they not only go to court they go to jail.

But not if they are a corporation.

Right Wing Echo Chamber

Last week the right wing thunk tank and taxpayer funded lobby group the Fraser Institute discovered corporate welfare. And sure enough their political lobby arm the Canadian Taxpayers Federation echos their masters voice;



Mr. Gaudet said the collapse of the auto industry remains inevitable despite this latest surge of public cash. "There is no evidence in the past that corporate welfare works," he said. This bailout will only lead other financially struggling companies and industries in this tough economic time to also expect a government shell-out, Mr. Gaudet warned. "The government can't bail them all out," he said. "It's hard to justify to a laid-off Nortel worker why his or her tax dollars should go to support artificially inflated salaries in the auto industry."



Which Nortel workers are those? The ones left working in China?

My goodness but this is funny to hear the CTF speak on behalf of workers. This political lobby of business types, who are not taxpayers, whose association does not speak for workers but a small self interested right wing business lobby, whose association is not democratic and has no elected officials simply employed self appointed spokesmen.

But as the article goes on to point out actually the last time Chrysler was bailed out they paid back their debt. However it seems ominous that this apologist for the capitalist class is telling us the Big 3 are doomed. Of course as usual they blame workers salaries and production costs for being uncompetitive. However as usual they never let the facts get in the way of their rhetoric. In Canada the wages and benefits paid to Toyota workers who are not unionized are competitive with CAW wages and benefits. Not less but competitive. Yet no one is telling Toyota workers to take a wage cut.

And like the Big 3 Toyota is cutting back on production as well. The crisis of overproduction has hit automakers around the globe, thanks of course to globalization.

We are facing a two fold crisis in capitalism, the fiancial market meltdown and the crisis of overproduction and underconsumption. Nothing new in that it is just the same old same old as Marx pointed out 150 years ago.

SEE

Bail Out Is Not Job Security

Chrysler Black Mail

There Is An Alternative To Capitalism

Auto Solution II

We Own GM

Auto Solution

tagsMGuinty, GM, concesssion bargaining, unions, trade union, Marx, Ontario, Corporate Welfare, Canada, cars, automobilie, production, taxes, tax credit, investment, environment, hybrid, self-valorization,, self-management,, workers control,, autoworkers,, KEN LEWENZA,,CAW, Big Three Auto,, libertarian socialism, automobile, Chrysler, Tony Clement, business unions, auto parts, workers, layoffs, plant-closings, workers-control, unions, labour, Canada

Bail Out Is Not Job Security

And we got what for this?

And the $6-billion that the Big Three domestic automakers are now seeking from the federal and Ontario governments is on top of what Mike said is $752-million in financial assistance to the industry from the two governments since 2004, including $200-million for Ford, $200-million for GM and $125-million for Toyota.

Layoffs, new plants with shifts shut down, pension plan payments deferred, and let's not forget that auto industry in Canada does not pay for health care.

Committee Chairman Barney Frank (D-MA) pointed out that the only cost difference between operating in the U.S. and Canada “has got to be entirely on health care.”

And there is no asssurances that there will not be further layoffs even with a bail out and further worker concessions. Unlike equity investments past performance does predict future performance when it comes to the auto industry. There is no job security in the auto sector no matter how much money gets thrown at it. And of course we know the only solution to this crisis is socializing the auto sector under workers control. Anything else is a band aid trying to patch a gaping wound.

Canada's three struggling automakers must come clean on plans to cut jobs if they hope to win taxpayer support for the $6 billion in aid they're seeking, Premier Dalton McGuinty says. McGuinty's push for details followed days of criticism from opposition parties worried that an aid deal could be cut with taxpayers knowing nothing about the fate of thousands of auto jobs and how their money will be spent. McGuinty noted the automakers have made public far less information about their plans in Canada compared with their U.S. parent companies, leaving lawmakers here in a difficult position in trying to sell an aid plan to taxpayers already feeling the pinch of the economic downturn themselves.
Overall, GM is seeking $800 million by year's end and $1.6 billion later, Ford wants a "standby" line of credit worth $2 billion and Chrysler $1.6 billion. GM, which is Canada's largest automaker, has signalled it may need another $1 billion if the rapid vehicle sales decline continues.Chrysler has already warned its car assembly plant in Brampton and minivan plant in Windsor may not be able to survive without financial help soon.

General Motors of Canada Ltd. is seeking "painful" cost cuts from the Canadian Auto Workers, as the Canadian units of the Detroit Three ask for financial help from Ottawa and Ontario. "What GM said is, 'We must share in this pain together. And we've got to come up with cost savings, Ken, that may be painful,' " CAW president Ken Lewenza said he has been told. The GM Canada request did not specify what cuts it is seeking, Mr. Lewenza said yesterday, but a union source said the company wants overall hourly labour costs trimmed and workers to give up some of their paid time off. Lewenza's comments came after the United Auto Workers in the U.S. revealed it will revise contracts with GM, Ford and Chrysler to delay billions of dollars in payments to a union run health-care trust. Furthermore, UAW president Ron Gettelfinger said the union would modify a jobs bank in which members on layoff receive up to 95 per cent of their pay. The CAW does not have a similar health-care trust or jobs bank in Canada at the three automakers. But even if CAW members worked for free for an entire year, Chrysler, Ford Motor Co. and General Motors Corp. losses are so massive that the savings from that move would offset just 11 days of losses at the three companies, CAW economist Jim Stanford told the meeting.

SEE:
Chrysler Black Mail
On The Dole
There Is An Alternative To Capitalism
Auto Solution II
We Own GMAuto Solution


tags
MGuinty, GM, concesssion bargaining, unions, trade union, Marx, Ontario, Corporate Welfare, Canada, cars, automobilie, production, taxes, tax credit, investment, environment, hybrid, self-valorization,, self-management,, workers control,, autoworkers,, KEN LEWENZA,,CAW, Big Three Auto,, libertarian socialism, automobile, Chrysler, Tony Clement, business unions, auto parts, workers, layoffs, plant-closings, workers-control, unions, labour, Canada

Chrysler Black Mail

Chrysler is blackmailing Canada.

In its submission to the federal government, Chrysler compared plants in Windsor and Brampton, Ont., with American facilities that could assemble the same models, and noted it had spare capacity in the United States - a comment that some in government saw as a veiled threat to shift production if Canada does not provide emergency assistance.

Meanwhile the Harpocrites offer no new solutions to the auto crisis instead they offer workers the same old same old;

Mr. Clement met with senior officials from the Canadian Auto Workers union, including its president, Ken Lewenza. Mr. Clement has urged the union to be "part of the solution" and has suggested they may need to take a cut in wages and benefits to keep jobs in Canada.


The solution to the auto crisis is not more concessions from workers nor bailing out the Big 3. It is to socialize them under workers control.


SEE
There Is An Alternative To Capitalism
Auto Solution II
We Own GM
Auto Solution

tags
MGuinty, GM, concesssion bargaining, unions, trade union, Marx, Ontario, Corporate Welfare, Canada, cars, automobilie, production, taxes, tax credit, investment, environment, hybrid, self-valorization,, self-management,, workers control,, autoworkers,, KEN LEWENZA,,CAW, Big Three Auto,, libertarian socialism, automobile, Chrysler, Tony Clement, business unions, auto parts, workers, layoffs, plant-closings, workers-control, unions, labour, Canada