In the late 80's, I worked in the auto industry as an Assistant Business Manager for a large GM dealer in Edmonton and then later moved to Kelowna in 1990 to be the Business Manager for a couple of Okanagan auto dealers.  Consequently, I am well aware of the importance and economic impact that these dealerships provide to the local economy.

As I am sure you heard this week, the federal and Ontario governments provided $9.5 billion to GM Canada in order to prevent the collapse of the Canadian auto industry but more importantly, a lethal blow to an already ailing economy.

How ailing?  According to Statistics Canada, Canada's economy shrank by 5.4 per cent (on an annualized basis) in the first quarter of 2009, the largest quarterly decline in 18 years.

Some folks have said to me that they thought we should have just let the manufacturer fail and have the dust settle where it may.  I totally understand their sentiments.  Bad corporate management and a failure to make the changes necessary to remain competitive brought some of our automakers to this point, but, as the Prime Minister pointed out this week “to allow that kind of a failure, that kind of a massive reduction in job loss, at this point in our economy would be very, very risky.” 

By Ontario Premier Dalton McGuinty's estimate, 85,000 jobs in total would have disappeared with the closing of GM Canada.  It doesn’t take long to realize that the ripple effect of losing that many jobs, when jobs are already scarce, is enormous.   Jobs after all, provide families with the means that support many other sectors from housing to retail to local government and taxes.

There is another important reason.  The Canadian and US auto industry work closely together.  Were we not to join President Obama in supporting this restructuring, General Motors would be restructured out of Canada – a move which would have had devastating results for hundreds of thousands of jobs and dozens of communities.

While manufacturing continues to undergo massive change, the auto sector still accounts for a large part of the Canadian economy and is too large to write off.

Not only that, there are other gains to be made.  Any good industry worth its salt is fundamentally fertile ground for progress through the research and development of new technology.  The science behind cleaner burning engines or hybrid technology all contribute to a more innovative, environmentally conscious society.

Despite their mistakes, their failure to respond to changes in the industry and consumer trends, this crisis which required the outlay of taxpayers’ money may just be the thing that will change the face of the automotive industry for the better.

In the meantime our support provides the industry the time it needs to restructure and help provide security for thousands of other Canadians, including those here in the Okanagan, who work for suppliers, dealerships and other supporting industries.  

If the makers of the North American car can get their act together there may indeed be an Act II for this manufacturing sector in which Canada maintains its share of production, secures significant investment in research and development and innovation, and protects high-skill jobs.

With a 12% stake in the company, we the shareholders are now in a position to send a message that is loud and clear to Canadian automakers:  “Let’s get on with it!”
 
Ron Cannan is the Member of Parliament for Kelowna-Lake Country.  If you wish to contact him please call 470-5075 or e-mail him at ron@cannan.ca.