CAW President Says Labour Concessions Won't Save the Big Three

TORONTO and DETROIT, Aug. 6, 2007 -- The outspoken Canadian labour leader, Canadian Auto Workers President Buzz Hargrove told a group of automotive investors this morning that the current focus by the Big Three on labour concessions is futile and won't help the overall picture of the North American producers.

"Labour concessions cannot possibly have any meaningful effect on the Big Three's market share in their home market," said Hargrove in a speech to the JP Morgan Automotive Investment Conference in Detroit.

"Even if the Big Three get everything they are asking for from the UAW, that would reduce the average production costs of a vehicle they sell in North America by only $500," said Hargrove.

  -   "This is equal to less than 2 per cent of the average selling price
      of a new vehicle in the U.S.

      and

  -   One-sixth the current sales incentives which the Big Three are
      currently using to sell new vehicles.

      and

  -   One-twentieth of what Toyota saves on the import of a Lexus due to
      the artificial suppression of the Japanese foreign exchange rate.

  and

  -   Less than one-quarter of Toyota's current per-vehicle profit margin
      on North American sales."

Hargrove said all the focus on trying to extract labour concessions diverts attention from the North American industry's real problems, which derive from falling market share of domestic producers. This is the end result of a huge and growing automotive trade imbalance with the rest of the world, according to Hargrove.