I heard an interesting news story yesterday while listening to CBC Radio’s the Sunday Edition (podcasts can be found here). The Canadian Auto Workers Union has signed a deal with Magna International that would allow the CAW to form a union in Magna’s plants, but workers would not have the right to strike. At the same time, Magna would not have the right to lock the workers out. Disputes that could not be settled over the bargaining table would go to binding arbitration.
Now this may be old news to Canadian readers as it received a lot of press coverage (The podcast I was listening to was also from November 11th — iTunes didn’t allow me to download it until yesterday). But what interested me about this case is that one of the reasons that Buzz Hargrove, head of the CAW said he was willing to sacrifice the right to strike was that it was a way to ensure that jobs at Magna didn’t move to China and other outsourcing hot spots.
In the case of Magna this is actually an improvement as it never was a union-shop, but I wonder what this will have on other unionized auto plants. In the latest auto strike with Ford in the US, the United Auto Workers gave up their cost-of-living fund in order to pay for health insurance (something Canadian unions don’t have to worry about due to universal health care). It’s not giving up the right to strike but it is still a major trade off. Hargrove said in the interview on the Sunday Edition that the CAW would never give up the right to strike where they have it (about 70% of the CAW’s membership has the right to strike. The 30% that doesn’t — excluding the Magna workers — are not allowed to because they are mandated as essential workers by provincial governments and therefore are only allowed to go to binding arbitration), but what other concessions will CAW give up to maintain manufacturing in Canada and really compete with China and other outsourcing nations?
In a way, manufacturing in Canada and North America in general is becoming very much like China as wages and benefits are cut to compete with the Middle Kingdom.
P.S. I’ve added a new category “Canada & Other Outer Realms” in which I will discuss in-direct China stories as the above.