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Sobering numbers

We have this to consider today – a report on what if the Big 3 automakers were to go belly-up:

The report paints a gloomy picture if the Ontario, federal and U.S. governments do not bail out the automakers.It warns the collapse of General Motors, Ford and Chrysler would send lasting shock waves through the economy, and that Ontario alone would lose 517,000 jobs. If auto output by U.S.-based manufacturers in Canada was cut in half, at least 157,400 jobs would be lost right away, 141,000 of them in Ontario.

In addition, the Conference Board of Canada has released its own report on what the stimulus package for Canada needs to look like:

The Conference Board says Ottawa should be prepared to spend between $10 billion and $13 billion in fiscal stimulus in the January budget to help out the struggling economy…The Conference Board says the stimulus of up to one per cent of the economy and should be targeted toward infrastructure investment on shovel-ready projects, on capital renewal expenditures and on ensuring Canadian firms have access to credit.

Let us sincerely hope that Stephen Harper is taking heed of reports like this, and has more substantial plans for job creation then putting 18 people in the Senate. Otherwise, it will be time for an alternative government to do so.

UPDATE @ 3pm: To be fair, Andrew Coyne is sceptical of the first report on the auto losses. He may have a good point, but the fact is that there would still be job losses even if Andrew is correct that this report is overblown. Andrew is also on record as being anti-stimulus, so it’s no surprise he’s come out against this report without producing what he feels are more realistic job loss numbers, and I won’t be surprised if he comes out against the Conference Board’s numbers as well. My point remains that Harper and Flaherty need to do something more then a Senate job creation program.

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5 comments to Sobering numbers

  • rolltide

    @ Scott. The pre-amble of the “Coalition” does not even recognize Quebecers as Canadians. Its funny how Liberals have no response. When Roy Green asked John MacCallum about it yesterday his best answer was, “I was not involved in the negotiations”, yet he signed it. “We all had to sign it”.

    @Mike: You are correct. The big three will just go the way of British Leyland if we start to throw money its way.
    http://edition.cnn.com/2008/BUSINESS/11/20/auto.industry.uk/index.html

    I say let them go Chapt. 11..then maybe.

  • Scott, one can be in support of the coalition yet not support its proposed policies. For me it’s a matter of what the majority voted for and that wasn’t HarperCo.

    Originally Posted By Scott Tribe@Chrystal Ocean

    The coalition is on record as saying a major stimulus plan is needed for the economy. Are you against that particular policy statement?

  • And that Scott is why I would defend the coalition on the legality of what they do, but I would still oppose them for their actions should the become the government.

    If that’s how many jobs will be lost, so be it. Let them go and allow other firms, organizations and individuals step in to obtain their capital and re-purpose it for something that will make money, that will employ workers and that will be sustainable.

    Sorry, but I work damn hard for my money and I do not favour it going to prop up poorly managed companies that exist today because of ill thought out protectionist government regulations over the last 20 years.

    Maybe Toyota will step in. Maybe a new domestic auto company, with new ideas and products, will step in. Zenn?

    Better let the process work itself out, than to continue to prop up the rotting corpse.

    Not with my money.

  • @Chrystal Ocean

    The coalition is on record as saying a major stimulus plan is needed for the economy. Are you against that particular policy statement?

  • Scott, Daphne and I don’t accept the necessity of a bailout for the auto sector nor, for that matter, any sector which, had it been managed correctly, wouldn’t be in the trouble it is now.

    Nor do we accept the numbers in the supposedly at arms length report you cite.

    Regardless of whether or not those numbers are correct, we wonder about this scenario: Suppose major retailers – say, Wal-Mart, Superstore and Costco and such – all were on the verge of bankruptcy, crying imminent death and begging to be saved with a bailout.

    The retail sector is HUGE. How likely would it be that governments would rush to bail them out?

    I suspect governments and politicos would be silent. Why? Because all of the jobs are low-paying and 517,000 of those jobs lost would affect only the lowest income class of workers.

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