Juno News - November 27, 2018


People wanting a government solution to plant closures just don't get it


Episode Stats

Length

3 minutes

Words per Minute

186.1915

Word Count

667

Sentence Count

33

Misogynist Sentences

2


Summary

Andrew Lutton explains why the government should not be a part of the solution to GM's decision to close five plants across Canada and the United States, and why it's not even close to being a solution at all. For more stories like this one, go to gimlet.fm/TheTrueNorth Initiative.


Transcript

00:00:00.000 With the announcement of General Motors restructuring plants across Canada and the United States,
00:00:06.400 the knee-jerk reaction from a lot of Canadians and certainly people on the left wing in government is
00:00:11.620 what can the government do about it?
00:00:14.620 And as difficult as it is to see thousands of jobs go away, the answer is nothing.
00:00:20.820 You know, when GM makes a decision like this that spans five properties across the border,
00:00:25.900 you can't blame a politician for it.
00:00:27.940 The left is trying to blame Doug Ford and Stephen Harper.
00:00:30.840 The right is trying to blame Justin Trudeau.
00:00:33.660 In the U.S., the Democrats are going to blame Donald Trump.
00:00:36.320 But the fact is, GM is a private company and it is in a changing marketplace when it comes to the automotive sector.
00:00:43.140 A changing marketplace that's going to change even further
00:00:45.960 and an economy that doesn't actually have a guaranteed positive long-term forecast.
00:00:51.800 So GM is going to make a decision that suits its interests and those of its shareholders.
00:00:55.860 The government may not like the decision, but ultimately speaking, that's not for the government to decide.
00:01:02.980 But you have a number of so-called hot takes on this that take aim at the free market,
00:01:07.860 like this one from Canadian columnist Michael Corrin.
00:01:11.800 And even more concerningly, because this woman actually has a level of power,
00:01:15.640 an NDP member of provincial parliament in Ontario,
00:01:18.260 vowing that this closure of the GM plant in Oshawa will be fought.
00:01:24.380 How is the government supposed to force a company against its will to stay in business?
00:01:30.560 How is the government, or how could anyone rationalize that the government should even be trying this?
00:01:36.020 To say to a company,
00:01:37.460 no, you may want to leave, but we're going to put a gun to your head and force you to operate here.
00:01:41.880 Now, I get that it's terrible.
00:01:44.780 And I get that the changing marketplace that we were talking about a few moments ago
00:01:48.560 is one that poses a great many challenges for many people who have had a job
00:01:52.980 and who have seen a company like GM be a fixture in the community in Oshawa for close to a century.
00:01:59.940 But the reality is that we cannot mandate that GM makes a different decision, nor should we.
00:02:06.740 This is the free market and this is capitalism.
00:02:08.580 And every dollar that GM spends above what it thinks it has to spend
00:02:13.040 is money that gets passed on to the consumers who are buying GM automobiles.
00:02:18.460 And I don't like this idea of pitting consumers against workers.
00:02:22.700 But ultimately, when a company is making a decision like the one GM is this week,
00:02:26.980 that's the very dilemma.
00:02:28.700 They have to balance the needs of their shareholders
00:02:30.820 and the product they can deliver to their consumers
00:02:33.240 against the needs of the unions that are pushing for job security.
00:02:37.660 And the governments that are pushing for job security,
00:02:40.400 which just isn't a reality in the industry of the automotive sector today.
00:02:46.380 So this is not to say we should be celebrating this.
00:02:48.840 I'm not going to jump up and down and say this is the free market working
00:02:51.540 and this is capitalism working.
00:02:53.180 But this is how the free market works.
00:02:56.000 And ultimately, if consumers are outraged about what's happening,
00:02:58.860 they'll change their buying preferences.
00:03:00.480 But we know it's not that easy when the products are going to market
00:03:04.160 and they're going to be, by GM standards,
00:03:07.100 made in the most efficient, cost-effective way possible.
00:03:09.980 That is what a company does and that is a company's obligation.
00:03:13.960 A corporation or a factory, either one, does not exist for charitable purposes.
00:03:19.720 They exist right up until the point the business case no longer makes sense.
00:03:23.260 And the government may wag its finger at GM,
00:03:26.480 but the government should not in a million years go near being part of a solution
00:03:30.280 because that will only make matters worse.
00:03:32.640 For the True North Initiative, I'm Andrew Lutton.