The head of the Canadian Auto Workers union says North American automakers are suffering from the effects of unfair trade relationships with countries like Japan, not from high labor costs.
"It's an unfair trading relationship," said Buzz Hargrove, national president of the CAW. "It's a one-way trading relationship. It's like playing baseball and the only thing you get to do is play the field."
Hargrove commented on the industry Tuesday at Canisius College in a press conference and a speech as part of its Distinguished Business Leaders Lecture Series. Former Rep. John LaFalce arranged his visit.
The outspoken head of Canada's largest private sector union stressed "fair trade" as the remedy for North American automakers' market share, which has plunged in the past 40 years. He said he rejects the argument that labor and health care costs, or product offerings, are the source of their competitive problems.
Worker concessions are not the solution, Hargrove said. He says the U.S. and Canadian governments need to be more assertive with their trading partners, not by imposing tariffs but insisting that other countries allow equal access to overseas markets so that their own automakers can compete.
Members of the CAW, like their U.S. counterpart, the United Auto Workers, are coping with job cuts and plant shutdowns amid restructuring by General Motors and Ford.
Delphi Corp. has a small presence in Canada, but Hargrove is closely watching developments at the auto parts supplier, due to the potential ripple effect. On Friday, Delphi could ask a bankruptcy court judge to cancel its labor contracts. Talks between Delphi, GM and the UAW are trying to reach a resolution.
Hargrove isn't at the negotiating table, and said he couldn't guess what might happen. But if Delphi's labor contracts are tossed out, and wage cuts of 60 percent are imposed on workers, he predicted the workers will strike.
Hargrove said he felt it would be disastrous for Delphi workers to accept such drastic cuts, warning of a "Delphi disease" that would spread through the industry and drag down workers' wages and standard of living. "All these parts companies will be forced to do the same thing, because they're competing in the same markets as Delphi," he said.
Hargrove, who has led the CAW since 1992, is a prominent figure in Canada. The union has 265,000 members in 13 sectors, one third of them in the auto industry.
"He's very high profile, very controversial," said Dennis DesRosiers, a Toronto-based automotive consultant, in a phone interview. "He speaks well to social policy agenda items."
But DesRosiers argues that Hargrove is "losing his power base" as the automakers whose workers he represents cut jobs.
DesRosiers disagreed with Hargrove's portrayal of foreign markets as closed to North American vehicle exports. He also challenged the view that the auto industry in North America is in a crisis, noting that non-union automakers such as Toyota continue to build plants and create jobs in the United States and Canada.
"Who's in crisis is the union side of the industry," DesRosiers said.
Hargrove told reporters at Canisius that he has no doubt that companies such as Delphi and GM will survive, but he wonders where their jobs will be.
"The only question for Americans and Canadians is, will they survive as a European company or an Asian company?" he said.