Monday, May 21, 2007

The Elephant in the Boardroom

Globe's Richard Patton gives us his take on why so many manufacturing companies are closing these days; especially in Ontario - "While Factories Close, Governments Sleep". (H/T to Bourque.)

According to Patton, who is president of the Canadian Chemical Producers Association, governments need to get more involved in the process of gaining investor confidence. He lists some of the unavoidable problems that are out of our control, such as the high Canadian dollar, but feels that more could be done by politicians. He cites a hopeful sign that this message is finally getting through:

We have recently seen some federal government leadership for manufacturing, following the excellent work by the parliamentary committee on industry, chaired by MP James Rajotte. The committee examined manufacturing woes and issued a unanimous report with 22 recommendations. Its first recommendation, a two-year capital cost allowance for new investments in plants and equipment, was introduced in federal Finance Minister Jim Flaherty's budget and more recently by provincial Finance Minister Greg Sorbara in Ontario. This is a very encouraging sign that we can work together.


Manufacturing closures will continue if we don't work hard to understand the problems and keep working on solutions.


But no where in this whole article did I see the word "unions".

To me this is the single most glaring issue that will dictate whether a company continues to thrive or is shut down. A militant union can choke production and profit. The union hierarchy often doesn't care about the jobs of the individual members as much as its own perception of strength, and usually takes a very negative stand regarding the possibility of concessions in terms of pay cuts or surrendering of benefits in order to forestall a plant closure.

The new global economy has changed the rules. Jobs can be outsourced where labour is cheaper.

Militant unions belong to an antiquated economic past, and soon so will most of our manufacturing jobs that are controlled by defiant union leaders.

13 comments:

Red Tory said...

That article makes no sense at all. It's vague beyond belief. A lot of words saying practically nothing. And from that you take it that eliminating "militant unions" is the answer? Where did that come fron? What about non-militant unions? Or are they all by nature "militant"?

Candace said...

"...Its first recommendation, a two-year capital cost allowance for new investments in plants and equipment, was introduced in federal Finance Minister Jim Flaherty's budget..."

Is that the same CCA that the environmentalists are screaming about for Suncor & Syncrude & other in oilsands?

Re: unions "...A militant union can choke production and profit..."

The reason CNRL is flying in workers from overseas is because the AB unions were insisting that the 10-days-in/4-days-out shifts warranted full overtime pay for the last 5 days of the 10-in. Everyone else is okay with "straight" time except the unions. So... not too many union guys on the Horizons project. Funny how that works.

Joanne (True Blue) said...

Candace, exactly.

Red, that was my whole point - that there was no mention of role of unions in the article. And militant unions are the biggest problem. They often have irresponsible leaders creating havoc just to be able to justify their existence; whether with strikes or job actions or whatever. No wonder so many companies are moving production offshore.

Anonymous said...

Something that Candace wrote reminded me of an instance the other day.

I was purchasing a coffee from Tim Horton's, and the trainer had to step away from the trainee for a minute. The trainee stopped and said that he had to wait for the trainer to come back, because he wasn't sure if he was giving me the correct change back. I offered to help him, and he had it right. He beamed.

He was a nice young man, and I'm glad that he has the opportunity to work...but, sometimes I wonder what is going to happen when the language skills, money skills are not up to par....as we've seen in Alberta, sometimes the language skills can cause death, because instructions are not understood, or questions can not be asked correctly.

And now the unions....when I've 'had' to work for a union based company, I can't really recall what the union actually did for me.

raz

Joanne (True Blue) said...

.when I've 'had' to work for a union based company, I can't really recall what the union actually did for me.

Raz, thanks for the input. And certainly I'm sure there are a few worthwhile unions left, although none come to mind.

The worst are teachers' unions, and anything associated with the auto sector.

Public service unions are a class unto themselves. Why do they exist? On what principle should public servants go on strike? Can we outsource their jobs too?

These are questions that I can never seem to get an answer to.

Anonymous said...

"The worst are teachers' unions"

You've got that right.

"Public service unions are a class unto themselves. Why do they exist? On what principle should public servants go on strike? Can we outsource their jobs too?"

...it's funny as I look for work, that any employee I chat with, always tells me to go for the jobs that are considered out-of-scope...meaning non-union. The reason? You pay union dues, and for what?

raz

Kunoichi said...

My last job was a union job - CLAC. From everything I could see, it was a win-win cooperative situation between the union and the employer. The only "complaint" I had was that I had no opt-out choice. By being employed there, I had to be a member of the union and had to pay dues. I didn't find it particularly onerous.

I have a brother who works for one of the major airlines, and the relationship is far more adversarial, but even that union wasn't as adversarial as the one where a friend of mine who tried to go to work during a strike was threatened by the local union leader - and when he wasn't intimidated by it, the union leader threatened his wife and unborn child! Turned out I knew this guy, too - his younger brother practically grew up in my household. I was stunned that he could've become the sort of person that would do this.

While I can see a place for unions, sadly I find they also breed complacency. I've lost track of the number of times I've heard people being told by their union reps not to work "too hard" because they were making the rest of the employees look bad.

Sandy said...

Joanne -- In the last decade, several Niagara manufacturing plants have shut down because of militant union demands. The view from the unions always was that management was simply bluffing. Well, they weren't. They all left the area or the country. Companies are not in business to provide jobs and benefits, although that is a nice consequence, they are in business to make a profit. If they can't, they have to shut down. Effective (and non-militant) union leaders understand that and somehow manage to keep the jobs here.

Joanne (True Blue) said...

The view from the unions always was that management was simply bluffing.

That's right. The days of bluffing are over.

The interesting thing is that you'll rarely here a company say it's because of the union that they're packing up.

You'll more likely hear some kind of platitude like "over supply" or something. Then they go off & manufacture the same thing elsewhere.

Red Tory said...

Joanne — Maybe unions weren’t mentioned in the article because they’re NOT considered part of the problem as you so confidently assert. I see a lot of opinion here, but very little in the way of substance to back it up.

Joanne (True Blue) said...

I see a lot of opinion here, but very little in the way of substance to back it up.

Opinion. Yes, you don't see much of that in blogs, do you.

Red Tory said...

Smarty pants. Of course there's a lot of opinion, but usually something to substantiate it.

Joanne (True Blue) said...

Smarty pants

Well, there's something you've never called me before!

but usually something to substantiate it

Let's just say I've done a lot of observing. Southern Ontario has seen more than its share of plant closures lately, and big unions seem to be a common factor.