It seems that the hot button argument over an “Automotive Sector Bailout” is catching a lot of ideological flack these days.The real problem with this argument is that it is one of ideological passions rather than pragmatism.
The impact of the automotive sector on the North American economy is all too often overlooked in today’s environment due to a focus on the energy sector.The energy sector is definitely the favoured child of governments.However, despite the past contributions to the economy it is still a second rate employer compared to the automotive sector.When we are looking at this realistically, government needs to focus on the needs of people and the greater good would be served with supporting the auto sector.This is not to ignore other manufacturing realms, but to provide employment to people where it can do the most good.
These people buy houses, cars, appliances, as well as other areas of purchasing.All of these zones of finance are seriously impacted by any changes in the automotive sector.Last but not least in this equation is the financial industry.It is in their best interest to lobby government for the auto industry’s survival.There are billions of dollars of direct loans to be made, and many more billions of dollars of transactions with the general public that are dependent upon the industry’s survival and more importantly; financial good health.To ignore this industry as has been done in the past years is to invite an economic slowdown; a definite prophecy that is now reality.
However, government should not provide handouts, but guarantees of loans.These guarantees should not come without conditions attached.Canadians need to know that a percentage of profits will be reinvested in emerging technologies and that a hefty percentage of that investment is here in Canada.This should begin with research and development and end with marketing and production.Canadians also should demand leaner corporate structures not unlike those of the Big 3’s offshore competition.The last and most important point of all of this is a restriction of offshore sourcing.North American jobs left our shores with only the profit margins to blame.We built this industry and we deserve to reap the benefits.Protectionism?You bet.
The auto industry’s past performance has been dismal and they need to change.Canadians are in a position to force that change and should.It will benefit our economy and our people.