March 18, 2020

The Economics of Austerity: How the USMCA is Disastrous for Windsor & All Canadian Workers

By J.G. Markham


On February 11th, 2020, the Windsor chapter of the Young Communist League - Ligue de la jeunesse communiste invited Communist Party of Canada - Parti communiste du Canada leader Liz Rowley to the University of Windsor Alumni Hall for a speaking event titled ‘The Economics of Austerity and the Politics of Militarism and Regime Change’. Rowley’s first point of discussion was talking about austerity, particularly the trade deal negotiated by the Liberal government known as the United States-Mexico-Canada Agreement (USMCA) and its effects on the manufacturing sector in Canada, which is deeply felt within the Windsor-Essex region.

Liz Rowley began by mentioning that as a result of a stronger union sector in Canada, albeit declining unionization rates since the 1990’s, Canadian auto workers enjoyed good living wages; auto sector compensation was enough to raise a family and retire with a decent pension. In contrast to Canada's roughly 30% unionization rate, only 8% of Americans are unionized, which contributes to their lower wages of $16/hr. In Mexico, wages are 1/10th that of Canada, at $3/hr. With deals like NAFTA or the new USMCA, which allows capital and corporations to freely move across the continent as they please, capitalists will continue to seek out the highest profit, lowest costs – thus Mexico is far more profitable to operate in than Canada. This deal also ensures that some of the manufacturing and auto jobs departing Canada end up in the U.S Rust Belt for much lower wages. The USMCA also does nothing to alleviate anxieties over the aluminum and steel industries as tariffs continue to loom and threaten industry.

The U.S would see Canada as it was before WWII, as described by Comrade Rowley. They want us extracting natural resources, materials to be refined and processed, only to be sold back to us as consumers, depriving us of sustainability and Canadian-made products. Timber will be harvested to be sold to the U.S for furniture manufacture, and sold back to Canadians at a much more inflated price. Therefore, you see American led transnational corporations pushing for increased tar sands operations, mining operations, and deregulated farming.

Oshawa faces a crisis with the GM plant closing, eliminating 2,700 employees with 20,000 additional jobs being sacrificed. Liz Rowley made the remark, “What about the local mom & pop shop that used to serve donuts and coffee to workers as they came in for work? They’re gone too. Or the pub at the end of the shift? Gone. All the shops and services will suffer from people not having the money to spend in the community or the lack of people to service.” She warned that communities in Windsor, Oshawa, Brampton, and St. Catharines could face severe community disruption and deep socioeconomic impacts. These were the first people to suffer the consequences of the USMCA. When the plant closure in Oshawa was first announced, many workers advocated to their union the idea to socialize the GM plant and retool it to produce a Canadian made electric vehicle, with a well formulated plan on how to do so. Autoworkers of Canada in UAW, CAW, and now Unifor Oshawa have long advocated for a Canadian car, made by a Canadian public company, which would guarantee auto manufacturing jobs. In the 1960s, the Canada-US Auto Pact guaranteed that a portion of cars sold in Canada had to be assembled in Canada, which in part neutered the support for a Canadian made car at the time.

In Windsor, Ontario, workers have seen firsthand the dangers of deals like NAFTA & USMCA, recently with the Nemak factory, which employed roughly 270 people creating parts for General Motors. Nemak had previously closed the Essex Aluminum plant 8 years after purchasing it from Ford Motor Co. instead of honouring the collective agreement signed in 2016 that stated that Nemak would continue operations until at least 2022, so long as employees take a wage freeze in 2019. Nemak is choosing to abandon its workers in the pursuit of exploiting the Mexican working class, where workers would be paid $1.50 compared with Windsor’s starting wage of $16. Within the past five years, Nemak has also received almost $5 million in provincial and federal funding, and another $1.5 million offer from the city of Windsor, which is now all going towards the new operations in Mexico. As a response, workers and their union (Unifor) seized the factory and blocked the entrances to prevent anything leaving or arriving in August 2019. Although the strikers had the support of the local community in Windsor, the courts eventually ruled that the strike must end, blockades be removed, Nemak allowed to regain access, and Unifor to pay back Nemak. Unifor has since taken the Nemak case to the Ontario Superior Court of Justice and Nemak continues to prepare its Mexico operations, taking its machinery and technology along with them.

Workers at the Fiat-Chrysler Automotive (FCA) Assembly Plant in Windsor have been facing increasing uncertainty and anxieties related to production and the removal of the entire third (midnight) shift, alongside looming shutdowns. Since March of 2019, there have been talks of removing the third shift from Windsor Assembly Plant (WAP), with slated layoff beginning September 30th of that year. Instead, it was pushed back to November 2019, then again to March 2020. Most recently, corporate leaders at FCA announced that WAP will be cutting its third shift officially in June 2020, eliminating 1,500 auto sector jobs. Windsor workers have also seen an increase in shutdown time, beginning in February of 2019, two weeks in April, and then another two week shutdown that summer, followed by the last shutdowns of 2019 in November and the prolonged ‘Christmas’ shutdown. FCA continued the trend in January 2020 with yet another shutdown. All of this affects local feeder plants, which employs thousands more on top of WAP; for every one WAP employee, there are roughly 10 others working in feeder plants. Fiat-Chrysler exploits the feelings of uncertainty faced by its workers in preparation for contract negotiations this summer, likely seeking further concessions from the workers to ‘save the third shift’ or their very own.

In other ways, residents of Windsor have seen the effects of the dismantled Canada-US Auto Pact of the 1960s as well as NAFTA through the loss of manufacturing jobs from Ford Motor Company and General Motors. GM, who once employed the majority of people in Windsor, have all but entirely abandoned the city as they have done in Oshawa. A husk of the old GM Transmission factory is all that remains, the space now used for storage. The other half: demolished, empty and abandoned, a constant reminder of the fleeting auto manufacturing industry in the heart of Windsor’s Walkerville. Or the old abandoned Chrome Shield factory that supplied GM, closer to the downtown core of Windsor. Since 2002-3 in Windsor, with IPL and Chrysler cutting jobs as examples, we have seen jobs steadily leaving – the result of the Auto Pact being struck down and NAFTA being negotiated. In 2007, the closure of the Ford Windsor Casting Plant meant the layoffs of 600 workers, and the closure of Hallmark Technologies led to the loss of almost 200 jobs. 2008-9 saw the closure of more plants and tool and die jobs, particularly Plastech Engineered Products and Lear Corporation, which meant the loss of over 500 jobs between the two alone. Windsor and Essex continues to see layoffs, shutdowns and closures of factories and tool and die to this day.

Leamington, Essex County, near Windsor, suffered from immense layoffs and economic uncertainty when Kraft Heinz was purchased by 3G Capital and Warren Buffet’s Berkshire Hathaway, and the Heinz Canning (now Highbury Canco) plant’s 750 workers were slated to be out of a job by 2013, the goal being to move operations to the US and Mexico. Although the canning plant was “saved” in 2014, maintaining 250 jobs (now around 600), workers have taken a large decrease in pay from $25/hr to only $16/hr. The height of the plant’s productivity still has not been seen. Kraft Heinz was successful in decreasing the number of jobs required to make their products for marketing, whilst also driving down the wages of Canadians. Nearby farmers also suffered, seeing decreased demands for tomato and other canning crops, which have yet to recover to previous levels.

As cheaper wages are allowed, and as corporations can exploit and abuse migrant workers through the Temporary Foreign Workers Program, the free flow of capital allows plants to be closed with no consideration for the community. We see the repercussions of free trade with a decline in Canadian manufacturing sector jobs and the decline and stagnation of wages. We are lured by the promises of cheaper grocery store prices by capitalists, while Canadian workers and farmers would be the ones losing their income and livelihoods.

Liberals, NDP, and Greens have all voted to back the USMCA with support from the Tories – who in fact stated the deal didn’t go far enough; the Bloc Québécois voted against it. As stated by Elizabeth Rowley, the Communist Party of Canada has advocated against these deals for years and continues to do so.

Workers can no longer afford more concessions or any more austerity. Workers of Ontario, Canada, and the world must continue to unite and stand in solidarity against capitalism’s overreaching greed and overconsumption. We must reject deals like the USMCA. We salute the strikes of autoworkers in Mexico and the United States; their fight is one and the same as the struggle of autoworkers in Oshawa, Windsor, and the rest of Canada. We must stand against imperialism at home and abroad. We must demand sustainability and protection of the environment. The struggle of the Wet’suwet’en, Mohawk, and other First Nations’ land protectors most recently, in defending their sovereign territory, their rights, as well as the purity of the water and land from corporate & imperialist exploitation is the struggle of all workers and peoples. The struggle of First Nations, Inuit, and Métis peoples highlights the extent of imperialism still at play at home, enabling capitalist exploitation and for-profit motives. The environment is not sustainable with such extraction. People and environment before profits!

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