Canada at risk of sinking in Trump's political tsunami

By Antonia Zerbisias

November 25, 2016

Neighboring nations Canada and the US head into an economic storm caused by the US election.

When economic waves come out of Washington, they rock Canada.

Now, with the Donald Trump tsunami heading towards the White House, Canadians fear their already floundering economy could be sunk.

Pundits and politicians are already predicting the death of trade agreements between the two neighbors which, until recently, when China edged out Canada, ranked as each other's top trading partners.

That's because, as CNN reported last week, a leaked memo reveals that Trump will trash the North American Free Trade Agreement (NAFTA) as soon as he sits at his Oval Office desk.

Not only has the president-elect repeatedly called the 22-year-old NAFTA a "disaster", he has added Canada to his "free dump" hit list, along with China, Mexico, Japan and Vietnam. As he claims, "We lose with Canada - big-league. Tremendous, tremendous trade deficits with Canada." Well, no.

Canada creates jobs in the US

While it is true that Canada now exports more to the United States than it imports - a difference of about $20bn a year - it sends south much-needed resources that help keep the few American manufacturing jobs left in the US.

Not that the president-elect would notice, given how much of Trump's business is offshore.

Our softwood lumber helps keep American housing affordable. Our hydro provides electrical power. We are the largest supplier of oil and natural gas to the US, ahead of Saudi Arabia and Venezuela.

What's more, many of the "Rust Belt states" that voted for Trump are the very same states that would suffer just as much as Canada if Trump were to tear up NAFTA. Consider Ohio, where Trump trounced Hillary Clinton. More than 300,000 jobs there depend on Canada-US trade and investment.

In fact, nine million jobs throughout the US result from Canada-US trade and investment.

This is why former democratic presidential candidate Howard Dean cautioned: "What's hurt our economy much more than NAFTA is the gross failure of us to redistribute wealth properly."

It is possible that Trump wasn't briefed on all this. On the other hand, it's possible that he was - and just didn't care. After all, what did facts matter in his "post-truth" campaign to win the White House?

This is a man who knows how to draw suckers into casinos. Why wouldn't they fall for his "Make America Great Again" rhetoric - even if it were a lie?

Canada's economic worries

Canadians are concerned that Prime Minister Justin Trudeau's carbon-pricing scheme, recently announced in his bid to fight climate change, will make Canadian products less competitive. They worry that the influence of Big Oil in Washington will send fumes spewing into their atmosphere. They fear that Trump will slash corporate taxes so low, there will be a rush of capital for the border.

And then there's the building of the Keystone XL pipeline. This would have sent 800,000 barrels a day of bitumen from the Alberta tar sands to North Dakota and Nebraska, to end up in refineries on the Gulf of Mexico coast.

OPINION: Canada's Willy Wonka

Barack Obama's refusal to give it the green light angered both American Republicans and Canada's Conservative government under Stephen Harper. But building the controversial pipeline might go to the top of Trump's to-do list.

The thing is, despite Canada's tanking economy, which is heavily bogged down by the price of oil, and Trudeau's eagerness to find new markets for the tar sands product, the KXL is no longer such a good thing for the country. He maintains it would make Canada even more dependent on the US - a dangerous proposition at any time, let alone during a Trump administration.

So, by mid-December, it is expected that Trudeau will approve domestic pipelines such as Kinder Morgan, which will carry bitumen to the British Columbia coast where tankers will take it to China and other Asian markets.

Still, Trudeau has come under attack, from both the Canadian right and left, for his apparent buckling to Trump - without once mentioning Canadian values, as Angela Merkel did - even before all the ballots were counted.

"It's important that we be open to talking about trade deals," he said, after congratulating Trump on his win.

As one national columnist put it, "Justin Trudeau's pre-emptive decision to tell one of the planet's most voracious deal-makers that Canada is willing to renegotiate the North American Free Trade Agreement, without even being asked, ranks as one of the great examples of a sovereign government disintegrating like cheap toilet paper."

It's a bad sign.

'Sleeping with an elephant'

Although we share our land, water and even air, the US has all the power in this relationship. Which is why Trudeau's father, the former Prime Minister Pierre Elliott Trudeau, told the Washington, DC, press club in 1969, "Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can call it that, one is affected by every twitch and grunt."

With Obama, Trudeau had a bromance. It's not likely to continue with Trump, despite their similar "trust fund baby" backgrounds.

Last week, former US Senator Rick Santorum, once Trump's rival for the Republican nomination and now an ardent supporter, told a Canadian interviewer: "You're governed by a bunch of liberals up here who have different agendas. They have the green agenda.

"They have an immigration agenda. They have agendas that are not the Trump agenda - and shouldn't be - because they are not in the best interests of working people in Canada and they're not in the best interests of working people in the US.

But Trudeau might be on to something, as the original US NAFTA negotiator Mickey Kantor pointed out last week. NAFTA, he explained, is out of date, signed before the internet, robotics and automation, the rapidly expanding technology and knowledge sectors and even iPhones.

"No agreement - certain none I ever negotiated - is perfect. They all need to be updated," Kantor said.

But updating is one thing. Tearing up is another.

For Canada, a nation founded on the fur trade, the next four years will mean navigating through some very rough waters. Canada is the little canoe to Trump's American destroyer.

The trick is to stay afloat - and ride the wave.

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Again, whether Donald Trump - will blink? Or will he love NAFTA?

Unions Split as Bitter U.S. Campaign Exposes Divergent Agendas

By Tim Jones & Mark Niquette

May 24, 2016

Before the holidays last year, three unions representing 6.6 million active or retired service workers and public employees endorsed Democrat Hillary Clinton for president. The AFL-CIO and its trade workers, representing 12.5 million people, are in no such hurry.

The split amid an unexpectedly contentious Democratic primary season has exposed contrasting agendas in organized labor. Trade unionists are exercised by international deals, which they blame for the loss of hundreds of thousands of manufacturing jobs. Service workers less affected by globalization advocate collective-bargaining rights and wage protection.

Even as leaders vow that organized labor will be united behind the Democratic candidate, the appeal of the presumptive Republican nominee, real-estate developer and television personality Donald Trump, could peel away rank-and-file votes in the fall.

"A lot of people are just fed up with establishment politics," said Chuck Jones, president of United Steelworkers Union Local 1999, which represents 1,400 Indianapolis workers about to lose their jobs because Carrier Corp. is moving operations to Mexico. Jones’s local endorsed Democrat Bernie Sanders, whose anti-free trade stance has won the support of many rank and file workers.

The election is more than five months away and Democrats say there’s plenty of time to heal wounds and unite. They say unions such as the AFL-CIO often sit on the sidelines until the Democratic nominee is selected. (The giant labor federation has endorsed only twice before the party’s nominee was clear, in 1984 and 2000.)

Trump is a wild card. The Republican, like Ronald Reagan in the 1980s, could make inroads among traditional Democratic voters unhappy with the uneven and sluggish pace of the economic recovery. He has made Carrier’s decision a frequent object of derision and has often talked about winning states like Michigan, Pennsylvania and Wisconsin, which haven’t delivered their electoral votes to a Republican since the 1980s.

"This is a time when a Donald Trump can emerge," said Robert Bruno, a professor of labor and employment relations at the University of Illinois.

The disarray for organized labor follows a long decline. Membership peaked in the mid-1950s, at about one-third of the U.S. work force. In 2015, the percentage was 11.1 percent, according to the Bureau of Labor Statistics.

While the movement was born in steel mills, auto assembly lines and coal mines, much of the modern rank-and-file is found in classrooms, state and local office buildings and prisons. Public sector and service-union membership outnumbers that of trade unions by 5-to-1. And the gap is getting wider.

"Manufacturing workers are very sensitive to trade issues, while service workers and teachers are focused on austerity budgets and government spending," Bruno said. "It’s playing out in a more dramatic way because there’s never been a Republican candidate who was so anti-trade. This certainly raises the profile of the disagreements."

Although Clinton entered the race last year as the strong favorite, Sanders’s populist campaign tapped anger over Wall Street, income inequality and blue-collar job losses. The Vermont senator’s path to the nomination is almost impossible, yet an average of recent polls have him defeating Trump by 11 points, while Clinton is effectively tied with Trump, according to RealClearPolitics.

Nafta’s Hangover

The dynamic is complicated by Clinton’s record in support of the North American Free Trade Agreement, which her then-president husband championed more than two decades ago. Sanders calls trade pacts "disastrous" while Trump pledges to renegotiate or scuttle Nafta. Some workers have taken note.

Geno DiFabio, 53, a truck driver and a former member of the International Brotherhood of Teamsters union, said he was a Democrat since he started voting at 18. Then, he took a Republican ballot in Ohio’s March 15 primary to vote for Trump.

DiFabio, who is from the hollowed-out steel center of Youngstown, said he has been increasingly turned off by the positions that Clinton and other Democrats have taken on immigration, gun rights and abortion.

"There’s enough to dislike about her to say, ‘Well, let’s give Trump a try,”’ DiFabio said.

The labor vote isn’t monolithic. President Obama won 58 percent of union households in 2012, while Republican Mitt Romney took 40 percent, according to the Roper Center for Public Opinion Research at Cornell University in Ithaca, New York.

In Pennsylvania, about 28 percent of the 800,000 AFL-CIO members are Republicans, and while those members may back Trump, it’s unlikely he will woo many others, said Rick Bloomingdale, the organization’s president in that state.

“He wasn’t against bad trade deals until he started running for president,” Bloomingdale said. “The voters are not stupid.”

Even if Trump appeals to some white union men, that will be offset or even overcome by the number of union women, blacks and Latinos against him, said Steve Rosenthal, a Democratic consultant in Washington who was political director at the AFL-CIO from 1995 to 2002.

“I’m in the school that when the votes are counted, he’s just going to be another Republican presidential candidate,” Rosenthal said.

In any event, the influence of union endorsements is limited, said Chuck Deppert, former president of the Indiana State AFL-CIO.

"The leadership is a lot closer to the Democratic Party than the average union worker is," said Deppert, who led the organization from 1989 to 1997. "They elected Obama and expected great things, but the average guy in the factory doesn’t see much difference. The jobs are still slipping away."

FCA indefinitely laying off 1,420 Detroit-area workers

Michael Wayland, The Detroit News

April 7, 2016

Changing consumer preference from cars to SUVs and trucks is largely to blame for a shift being cut at the Sterling Heights Assembly plant.

About 1,420 production workers face indefinite layoffs at the facility and a supporting stamping plant that build the Chrysler 200 mid-size sedan.

Fiat Chrysler Automobiles NV informed the United Auto Workers as well as city and state officials of the layoffs Wednesday afternoon. The indefinite layoffs will begin July 5. About 1,900 employees will remain working on one shift at the assembly plant.

The decision comes after months of temporary layoffs due to a lack of demand for Chrysler’s midsize sedan, the facility’s only vehicle. In a crowded market segment with declining demand, the lackluster Chrysler 200 never caught on and will be discontinued. Fiat Chrysler said the shift cut is “to better align production with demand.”

Production of the Chrysler 200 at Sterling Heights Assembly stopped on Feb. 1 and the plant’s 3,000-plus employees were placed on temporary layoffs. Production was scheduled to resume at the 5-million-square-foot assembly plant this week, but a company spokeswoman on Wednesday said that was pushed back to next week.

Indefinitely laid-off employees, including 120 at Sterling Stamping, will be placed in open full-time positions in other plants “as they become available within the Detroit labor market based on seniority,” the company said.

The layoffs are “a direct result of shifting demand toward trucks and SUVs,” Fiat Chrysler said in a statement.

“Our truck and SUV plants are running six days a week about 20 hours a day,” the company said. “And while 1,300 people will be impacted by layoffs (at Sterling Heights Assembly), we have been able to add 11,000 hourly jobs in Michigan since 2009 to keep up with that demand.”

UAW Vice President Norwood Jewell, who heads the union’s Fiat Chrysler department, said while the shift cut is “unfortunate, it is not unexpected.”

“FCA is not the only company experiencing a slow market for small cars,” he said in a statement. “On a bright note, there is a strong demand for larger-sized vehicles. The company has been planning to increase its capacity to build more trucks and SUVs.”

“I believe that in the long term this move will be a positive one for our members and the company.”

Union employees under the UAW’s contract with the automaker are paid on average about 95 percent of their after-tax pay while laid off, including state unemployment benefits. That ends up being 70-75 percent of their gross pay, according to Art Schwartz, a former longtime negotiator with General Motors Co. and president of the Labor and Economics Associates consultancy firm.

A spokesman for the UAW was unable to immediately provide additional details on pay and benefits for the laid-off employees.

The contract also states that employees placed on indefinite layoff can be offered out-of-market jobs (greater than 50 miles). If they accept, they will receive up to $50,000 as a relocation allowance, $10,000 of which will be provided “as a signing bonus to cover miscellaneous up-front cash expenditures.”

If they decline, the employee is placed on “inactive status” with no company-provided income or benefits but remain “eligible for additional job opportunities,” according to the contract.

Neither UAW Local 1700 President Charles Bell or UAW Local 1268 President LaShawn English, both of whom represent production workers at the two Sterling Heights facilities, immediately responded for comment.

The layoffs come 10 weeks after Fiat Chrysler CEO Sergio Marchionne outlined a business plan that included ceasing production of the Chrysler 200 and the Dodge Dart compact sedan to free up space in U.S. plants for hot-selling, more profitable Ram pickups and Jeep SUVs.

Chrysler 200 sales through the first three months of the year in the United States were down 63.4 percent compared to the same time period in 2014. Fewer than 18,000 cars sold.

Karl Brauer, Kelley Blue Book senior analyst, said the Chrysler 200 — which was completely redesigned in 2014 — is outclassed: “A couple years ago it likely could have chipped away the segment leaders’ market share. In 2016, there are simply too many other compelling options, both within and outside the midsize sedan segment, for a car like the 200 to grow or even maintain its volume.”

Sales of the Dodge Dart also have been problematic: It’s taken a 32.8 percent dive so far this year. However, the 4,000-plus workers at Belvidere Assembly in Illinois have not been been as negatively affected because that plant also produces the Jeep Patriot and outgoing Jeep Compass. Sales of those sport utilities are up 42.8 percent and down 3.2 percent this year, respectively.

Marchionne said the plan to cease production of the cars was due to a “permanent shift” in consumer preference from cars to crossovers and sport utility vehicles. The company plans to use freed-up plant capacity to build more hot-selling Ram Truck pickups and Jeeps.

Last year marked the fifth time in six years that light-duty trucks, including some SUVs and crossovers, outsold cars. Trucks accounted for 55.7 percent, or 9.7 million, of vehicles sold last year, up more than 1.1 million from 2014. That’s the segment’s highest percentage since 2004, according to Autodata Corp.

Marchionne said the company was continuing discussions with potential partners that could “provide a product from their facilities” to allow the company to cover gaps in the lineup left by the Dart and 200.

Prior to Marchionne’s comments on ceasing production, there were media reports during contract discussions with the UAW last year that the company planned to move production of the 200 and Dart to Mexico. But the company never confirmed those plans.

Moving the production to Mexico wouldn’t have been unprecedented. Several automakers, including crosstown rival Ford Motor Co., have announced significant investments in Mexico. Ford on Tuesday confirmed plans to build a $1.6 billion assembly plant in Mexico for small-car production.

The Sterling Heights shift cut is the latest twist for workers at the plant. The plant was scheduled to be shuttered during Chrysler’s 2009 bankruptcy. The reborn company eventually changed its plans and invested more than $1 billion to renovate the facility, including new paint and body shops, for production of the 200.

mwayland@detroitnews.com

(313) 222-2504

Headline

Fiat Chrysler Automobiles NV on Wednesday announced a $500 million investment in Argentina for production of a new vehicle for the Latin American market.

The plant is scheduled to launch production in the second half of 2017 and will produce more than 100,000 vehicles a year, according to the automaker.

“This plant will operate using the most advanced technologies available to FCA today,” said FCA CEO Sergio Marchionne in a statement. “This choice demonstrates a major strategic change, giving the Córdoba plant a central role in FCA’s industrial activities in Latin America.”

The investment, Fiat Chrysler says, includes retooling the facility, installation of more than 150 robots in the body shop, supplier development, training and research and development. The company did not say what vehicle will be built at the plant.

mwayland@detroitnews.com

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1- Blue collar got laid off - why no white collar laid off?

2- Why they ship jobs to Argentina - thanks to Clinton Nafta.