Someone at DND is Thinking!

Apparently the Department of National Defence wants a cut of the pie when Mr. Harper's stimulus package for the economy is included in next week's budget. Now my initial reaction when I read the headline of this article was that DND was getting greedy, calling for more money at a time when the focus should be on ensuring the economic security of Canada's citizens. The money to be used to upgrade Canada's current fleet of LAV-3's.

I have to admit as I read the article and then again, the idea began to grow on me and for two main reasons. First of all, Canada needs these vehicles. Let's face it, every couple days we hear about IED's going of and injuring Canadian soldiers. Now while we focus on the people, and rightly so, it must also be noted that we also lose equipment to damage; equipment that is sorely needed to protect our soldiers. One of the major problems facing our forces is that they lack some of the equipment that they sorely need and these vehicles are included in that. Therefore it is good thing that Defence Minister McKay is pushing for this.

The second reason this makes sense is that the contract for these vehicles would be served in Canada. These trucks would be built in London, Ontario and serviced in Edmonton, Alberta. This would provide a boost to the slumping auto industry and help to counter some of the losses that Canadian workers have faced as a result of plant closures by the "Big 3."

I think it would be safe to say that this avenue would not just be to the benefit of Canada's military but also to the people who work in Canada's automotive sector. This would be a rare case where Canadians could "have their guns AND their butter." Mr. Harper should include this relatively inexpensive ($1.3 billion) plan into next week's budget and economic stimulus plan. It would show that he and his government are thinking strategically for Canadians, both home and abroad, and would likely help to rebuild some of the confidence that they lost at the end of 2008.

Pony up Mr. Harper!

- blenCOWe

A Little Cooperation Would Go A Long Way

In the United States, the proposed $14 billion auto sector bailout failed due to the United Auto Worker's Union was unwilling to accept a wage cut to help make the sector more profitable and fiscally responsible.

Then, the president of the Canadian Auto Worker's Union, Ken Lewenza, decided to provide the delightful snippet:

“We refuse to have the auto workers as scapegoats,” he said. “It's finger pointing.” -- The Globe and Mail

At the risk of pissing off a number of friends at home who are tied to the auto sector in Windsor, it seems to me that the unions are becoming a major obstacle to helping the people they are supposed to represent. The auto workers are not the scapegoats but many of the people I know that work in the sector have hourly wages in the range of $35/hour or even higher. Now it seems to me that a reasonable short-term cut in their wage in the region of $5-8 would not be harmful in the long-run. Like I said, this cut would be a short term solution to allow the auto companies to get their bailout monies and some time to restructure their business models so that they will be viable again in the future.

Apparently, the non-Big 3 companies (e.g. Honda, Nissan, Volkswagen) have wages quite a bit lower than those of the domestic producers. Basically, the idea would be to level these out, bringing the inflated wages down to realistic amounts. Notice that the companies with the reasonable wage levels are not the one's in major trouble!

It comes down to basic mathematics; if the unions do not start to play ball the companies will crumble. Its a simple comparison of equations,

Current Model: High wages x no hours (cuz the companies bankrupt) = no jobs/no money

Proposed Model: Slightly lower wages x regular hours = still have a job/income

Hey Unions, DO THE MATH!!

The bailout packages are just asking for a little cooperation so that these companies do not have to face the nature of free markets and collapse like they should according to their dysfunctional business models.

- blenCOWe