[LINK] "GM-Chrysler deal could spark 'significant downsizing'"

Here's more grand news aboot industrial Ontario's future.

The possibility of General Motors acquiring Chrysler raises the spectre of "further significant downsizing" in Canada and a car assembly plant in Brampton, could be the first to go, says Canadian Auto Workers president Ken Lewenza.

A deal for General Motors Corp. (NYSE: GM) to buy Chrysler LLC from New York private equity firm Cerberus Capital Management LP could come soon as both companies struggle to deal with declining auto sales.

The two companies' products overlap significantly in some areas – including sport utility vehicles, pickup trucks and crossover vehicles – and this fact will likely lead to substantial consolidation should there be a deal, according to TD Bank economist Derek Burleton.

"Given the current challenges and the pressures on the companies, there certainly would be a real thrust to secure cost savings, so that will obviously be a risk to further significant downsizing and to the Ontario economy," said Burleton.

Lewenza said some Canadian plants – including Chrysler's minivan plant in Windsor, Ont. – would likely survive a merger because they provide a unique service. But others – such as the Brampton plant – probably wouldn't be so lucky.

"The Brampton assembly plant has multiple products comparable to what GM has in their product portfolio today," Lewenza said in an interview. "This would be a real challenge for us."

Lewenza added that the potential of an acquisition or merger between the two companies is just one more uncertainty facing the Canadian auto industry, which has been beset by a slowing economy, high gas prices and, until recently, parity between the Canadian and U.S. dollars.

[. . .]

Burleton said concessions on wages and benefits by the U.S.-based United Auto Workers is going to make it difficult to convince North American automakers to continue producing vehicles in Canada.

Anthony Faria, an auto industry specialist at the University of Windsor, estimates that Canadian employees of the so-called Detroit Three – Chrysler, Ford (NYSE: F) and GM – are costing their employers about $25 more an hour than their U.S. counterparts.

But Lewenza said the CAW will not bend on wages or benefits.

[. . .]

A marriage of the two auto giants would create a firm comprising about 36 per cent of the auto market and plants across North America. In Canada, the two companies employ about 30,000 people – 20,000 at GM and 10,000 at Chrysler – and have assembly and parts plants across southern Ontario.

GM operates car and truck plants at Oshawa, components factories in St. Catharines and a transmission plant in Windsor. Chrysler Canada has a car assembly plant northwest of Toronto, minivan operations in Windsor and parts operations elsewhere.

[LINK] "Income gap growing wider"

Here's some more cheery economic news..

Poverty and inequality rates in Canada have been on the rise since 1995 and are now higher than the average developed nation, according to a new study.

The income gap is growing throughout the developed world, but the gap between rich and poor in Canada widened more dramatically than in most countries between 1995 and 2005, according to the report released in Paris today.

[. . .]

"After 20 years of continuous decline, both inequality and poverty rates (in Canada) have increased rapidly in the past 10 years, now reaching levels above the OECD average," says the report.

As in other countries, more single-parent households and people living alone are contributing to income inequality in Canada.

And wages for the rich are increasing, while they have been stagnating or dropping for middle and lower income workers, the report says.

Most affected have been young adults and families with children.

Canada spends less on cash transfers, such as unemployment and family benefits, than other OECD countries and that may be one of the reasons the country fares worse than others, the report suggests.

[. . .]

With U.S. Democratic leader Barack Obama ahead in the polls and promising to cut poverty in half in that country within 10 years, Canada may soon be one of the only developed countries without a detailed plan to address the problem.

But Lesley Harmer, a spokesperson for retiring Human Resources Minister Monte Solberg, said the government is "taking real action to support Canadians who need help."

In an email, she listed "vital social programs" the government is strengthening: the Working Income Tax Benefit; the recent extension of affordable housing and homelessness programs; the new retired disability savings program; $100 monthly child care benefits; and supports for seniors, skills training and post-secondary education.

When asked if the government plans to introduce a strategy with goals and timetables she said: "I think what I sent you stands."

The OECD report's homepage is here.

[LINK] "Officials' actions may have 'resulted indirectly' in torture"

The Globe and Mail's Colin Freeze is only one of many, many people reporting this news.

A highly secretive inquiry into alleged "torture-by-proxy" by Canadian counterterrorism officials has concluded that none of the overseas detentions of three Arab Canadians resulted directly from the actions of Canadian officials.

However, the inquiry did find that the three men were tortured in foreign prisons and that the mistreatment may have "resulted indirectly from several actions of Canadian officials" who were "deficient" in some of their actions, even if that had not been any civil servant's overriding intent.

"I found no evidence that any of these of these officials were seeking to do anything other than carry out conscientiously the duties and responsibilities of the institutions of which they were part," Former Supreme Court justice Frank Iacobucci wrote in a 544-page report released Tuesday after exploring the actions of the Canadian Security Intelligence Service, the RCMP and the Department of Foreign Affairs.

“It is neither necessary nor appropriate that I make findings concerning the actions of any individual Canadian official and I have not done so.”

[. . .]

[T]he report does contain some telling revelations, including that CSIS sent questions to Syria through a back channel. "In early December 2001, CSIS sent questions to a foreign agency to be sent to Syrian authorities to be put to Mr. Elmaati."

Even though the judge found that the intent of the questions was largely to test the veracity of the prisoner's coerced confession, "it is reasonable to infer that Mr. Elmaati's mistreatment by Syrian officials resulted indirectly, at least in part, from sending questions to be asked of Mr. Elmaati by Syrian officials."

Or, more succinctly, as he puts it, the Syrians wouldhave viewed the CSIS questions as "a green light ... rather than a red light" to stop.

He argued that "no Canadian officials should consider themselves exempt" from the responsibility of upholding human rights.

Foreign Affairs was deficient in providing consular services to some detainees, he writes.

A previous judicial inquiry had raised similar issues, even though it was not specifically tasked to look at these cases. For example, it was known that the Mounties had faxed a list of questions to Syria for interrogators to put to Mr. Almalki, and had used the coerced confession from Mr. El Maati to get a phone warrant in Canada.


"I found no evidence that any of these of these officials were seeking to do anything other than carry out conscientiously the duties and responsibilities of the institutions of which they were part," Former Supreme Court justice Frank Iacobucci wrote in a 544-page report released Tuesday after exploring the actions of the Canadian Security Intelligence Service, the RCMP and the Department of Foreign Affairs.

“It is neither necessary nor appropriate that I make findings concerning the actions of any individual Canadian official and I have not done so.”

At least we weren't directly involved.