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Toronto Star

Trudeau Should Consider Buying GM and Making Electric Cars

The global auto industry is in flux, with the world expected to transition to the electric car over the next few decades

'The closure of General Motors’ Oshawa plant should serve as a game-changer." (Photo: Screenshot)

'The closure of General Motors’ Oshawa plant should serve as a game-changer." (Photo: Screenshot)

Long after the last factory has left Ontario, one can imagine Doug Ford still sporting a full-on Cheshire grin as he puts up billboards proclaiming the province “Open for Business.”

Certainly, the premier didn’t seem even slightly embarrassed that he’d posted his billboards along the American border just before America’s biggest automaker announced plans last November to permanently shut down business at its flagship Ontario plant.

Despite Canadian taxpayers bailing out GM with billions of dollars in 2009, the shrinkage of its Oshawa workforce has continued relentlessly—from a high of 23,000 in the 1980s, down to 3,000 now — and soon to 0.

For the rest of us, however, the closure of General Motors’ Oshawa plant should serve as a game-changer. Despite Canadian taxpayers bailing out GM with billions of dollars in 2009, the shrinkage of its Oshawa workforce has continued relentlessly—from a high of 23,000 in the 1980s, down to 3,000 now — and soon to 0.

The Star’s business columnist David Olive made a persuasive case that Ottawa should step in and buy GM Canada (at a fair, negotiated price), and use its facilities—including assembly plants, engineering labs and cold-weather testing centre—to create the first Canadian-owned automaker. As Olive observed, we know a lot about building cars in Ontario. We were making motorized vehicles here for about half a century before Honda began its transition from making bicycles to cars.

There’s never a perfect moment for a really ambitious move, although actually this might be a good one—the global auto industry is in flux, with the world expected to transition to the electric car over the next few decades.

A study by researchers at the International Monetary Fund (IMF) and Georgetown University concluded that such a transition is likely to come faster than expected. They estimate more than 90 per cent of passenger vehicles in the U.S., Canada, Europe and other advances nations could be electric by 2040.

It’s hard to imagine such a speedy transition — but then, it was probably also hard in 1910 to imagine Henry Ford’s futuristic Model T replacing the ever-popular horse-and-buggy. (Back then, the Model T was far too expensive for ordinary people. But within a dozen years, its price plunged by 70 per cent, and in 1925, almost two million Model Ts were sold.)

The IMF researchers point out that a transition to 90 per cent electric cars by 2040 “would meet the conditions to keep global temperature rise below 2C.”

They also note that such a transition would disrupt the auto industry. Since an electric car has fewer parts, they maintain that “on-shoring” — that is, assembling cars in advanced economies rather than “offshoring” them to low-wage countries — is likely.

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This suggests that a Canadian automaker building electric cars could lead to future jobs here.

Of course, any decision to invest billions of taxpayer funds would have to be made with utmost care.

Yet, oddly, Prime Minister Justin Trudeau showed no such careful consideration when he promptly jumped in with 4.5 billion taxpayer dollars to purchase the leaky, 65-year-old Trans Mountain pipeline last spring, declaring it “in the national interest” to ensure the pipeline’s expansion after the corporate owner threatened to back out of the project.

And taxpayers could be on the hook for another $9.3 billion if Ottawa ends up financing that expansion — which would enable Alberta to triple production of its heavy oil, delivering a devastating blow to the battle against climate change.

Meanwhile, Trudeau has shrugged and shown no interest in using taxpayer dollars to create a Canadian-owned automaker that could involve us in the future challenge of combining transportation and clean technology — a challenge that seemingly holds the best hope for tackling climate change.

Of course, Trudeau’s investment in the pipeline was driven by a desire to appease Alberta (which it failed to do). Furthermore, it had the support of the business community, whereas business would oppose a publicly owned automaker, seeing it as encroaching on its turf.

That’s why, when it comes to an investment that could put Canada in the race to develop a new generation of electric cars — and make us leaders in fighting climate change—Trudeau is timid and unimaginative.

But when it comes to buying an aging, climate-destroying pipeline — with the blessing of the business community — our prime minister is all boldness and swagger.

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Linda McQuaig

Linda McQuaig

Linda McQuaig is an author, journalist, and former NDP candidate for Toronto Centre in the Canadian federal election. She is also the author (with Neil Brooks) of Billionaires’ Ball: Gluttony and Hubris in an Age of Epic Inequality, published by Beacon Press.

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