Categories: Andrew Coyne, Capital Read

Shock report: many people work in the auto industry

by Andrew Coyne on Tuesday, December 16, 2008 1:34pm - 89 Comments

Canada would lose more than a half-million jobs if the Detroit Three auto makers went out of business, according to a new report released today.

The Ontario Manufacturing Council said the impact of a complete shutdown of the Detroit-based companies would spread through part suppliers and dealerships and into communities across the province. The council is an arms-length agency established by the Ontario government.

The “council” is not an “arms-length agency,” for starters: it’s a front group of special pleaders, set up by the Ontario Ministry of Economic Development to provide cover for the McGuinty government’s industrial policy ambitions (or, in govspeak, “manufacturing stakeholders who will examine the sector’s long-term needs and recommend to government, strategic approaches on sustaining growth and increasing global competitiveness.”) The vice-chairs are the president of the Canadian Manufacturers and Exporters association and the chief economist of … wait for it … the Canadian Auto Workers.

The report, with its shock-horror estimate of 582,000 jobs lost, is founded on two premises, both of them utterly absurd. One, that all three of the Detroit-based auto manufacturers shut down all of their operations, not just in Canada, but worldwide (the study models “the impact of the Detroit Three automakers ceasing operations globally.”)

Two, that none of the other manufacturers increase production to take up the slack (“foreign vehicle manufacturers in Canada are assumed to maintain production.”)

It’s on the basis of these two extravagantly unrealistic assumptions that the minister is able to talk about “the demise of auto in Canada” or “the extinction of the auto industry” as “the economic equivalent of a nuclear freeze.”

Well, yes. If you dropped a nuclear bomb on Detroit and Windsor, it would cost a lot of jobs. But no one is proposing to do anything of the kind. What is being discussed is bankruptcy, not vaporization. The plants don’t disappear; they don’t even shut down, for the most part. The companies go on producing, albeit at lower volumes. But that’s what would happen in any event, because people are buying fewer cars.

But they’re still buying some cars. That’s the other part of this “study” that’s hard to take. Detroit sold something like 18 million cars worldwide last year. Even with a 20% decline in sales, that’s still 14 or 15 million willing purchasers of automobiles that, under the study’s assumptions, would apparently have to walk, owing to the other manufacturers’ inexplicable failure to ramp up production — or buy up Detroit’s unused capacity — to meet the demand.

It would have taken five minutes for somebody in the media to see through this obvious con job. Yet in every story I saw, the 582,000 number was reported straight, just as if it actually meant something. Go figure.

UPDATE: 300,000 JOBS “AT RISK” IN FORESTRY SECTOR

Trees will go unfelled, wood will cease use, unless forestry companies get $600 mil.

PAC’s members employ about 300,000 people and account for 12 per cent of Canada’s manufacturing activity, more than the auto and banking industries combined.

That is, until lumber became extinct…

Tags: auto bailout

More by Andrew Coyne

Dot redux

I personally draw a difference between a reporter writing a piece where he/she looks at the potential impact that bankruptcy of the big 3 would have on employment levels etc through his/her own interviews research etc. and a reporter writing a story of the contents of a report released by some special interest group.

These reports are released all of the time. You do need to have some training on many occasions to cut through the b.s., or to quickly recognize what rocks to look under.

The same thing happens, for example, when AECL supporters release an economic study of the benefits of nuclear power production/ generation, and the environmental NGOs release a counter report – both cherrypick the numbers to suit their arguments (ie the former includes all economic spin-offs, whereas the latter only use costs and no benefits), and it does take some time and expertise to figure out the “true” numbers.

I’m not particularly offended by the reporter’s work on this report – par for the course, and subject matter of his report.
Canadians For Proper Media

I would say “good post”, except that…it would be like complimenting you for sinking a 6 inch put for par. Wait: that was too nice. It would be like complimenting yourself for not soiling yourself. Dude, you’re *supposed* to say sensible stuff, particularly when it comes to economics!

This post isn’t remarkable except for the fact that, well, you put your finger on it nicely, Andrew: the Canadian media is colluding to spread fear, uncertainty, and doubt about the economy, just like it did after 9/11 and just like it did in the buildup to the Iraq war. You being the only one not spreading FUD is good, I suppose, but you’re not saying anything that the more perceptive commenters (ie me) here have already said.

Canada: the country where nobody is watching, and nobody cares. Yeah, the media is colluding against the people: whaddayagonnadoaboutit?
Dot redux

This post isn’t remarkable except for the fact that, well, you put your finger on it nicely, Andrew: the Canadian media is colluding to spread fear, uncertainty, and doubt about the economy,

Well, given that the “Canadian media” will suffer from reduced advertising, subscriptions etc. from any fear induced or prolonged economic downturn, it would seem to me to be a pretty stupid strategy to collude over.
Sisyphus

Mr. Wells – In case you still haven’t found that pot of Conventional Wisdom, I think I saw it earlier today all over NNW.

Last I noticed Greg Weston was stuffing it down his pants. Sorry.
Critical Reasoning

Paul, cute joke about page 11. I think your point about reporters avoiding bias is very interesting… in the end it is simply easier for reporters to avoid challenging numbers and assertions.

First, it’s a lot less work to simply “report both sides of the issue” uncritically, and there is time pressure to meet deadlines.

Second, as you pointed out, reporters who challenge numbers risk the appearance of bias. I can easily imagine an intrepid reporter who challenged the art community’s GDP assertions during the last election being tarred and feathered as an art-hating philistine or a neocon ideologue.

Third, there is probably a general lack of quant skills among members of the Canadian MSM, not to mention (arguably) a lack of intellectual curiosity. I’m sure there is also a tendency towards “generalism” which discourages reporters from delving too deeply into any given issue.

Unfortunately, of these factors lead to some pretty crappy reporting in this country. We need more reporters with the balls (metaphorically speaking) to challenge bogus assertions and numbers.
Mike

“The report, with its shock-horror estimate of 582,000 jobs lost, is founded on two premises, both of them utterly absurd. One, that all three of the Detroit-based auto manufacturers shut down all of their operations, not just in Canada, but worldwide (the study models “the impact of the Detroit Three automakers ceasing operations globally.”)”

It would not be necessary that even Detroit shut down completely. All that is required is that cuts into the capacities of the Detroit Three and their suppliers be applied preferentially in Canada. If a massive bailout by the U.S. government proceeds and is not matched by at least proportional, most likely higher than proportional bribes by the Canadian government, that outcome is likely.

“Two, that none of the other manufacturers increase production to take up the slack (”foreign vehicle manufacturers in Canada are assumed to maintain production.”)” No foreign manufacturer can be found that is interested in picking up Volvo or Saab right now – two brands that in normal times were considered valuable. With everyone suffering from excess capacity, it is highly likely that no buyer will be found for the Canadian plants, at least not without inducements that would dwarf the ones currently under discussion.

In case the Canadian government does nothing, I would expect a near total wreckage of Canadian car manufacturing. The “global” assumptions made in the study cited are not needed to arrive at that conclusion.

Nice job beating up a straw man though, Mr. Coyne. You showed ‘em!
madeyoulook

In case the Canadian government does nothing, I would expect a near total wreckage of Canadian car manufacturing.

Really? That will come as quite a shock to those auto manufacturers not named GM, Ford or Chrysler-Dodge. And to all the Canadian workers in those plants.

We’ve gotta bail ‘em out! Why? Well, because there are just so gosh darn many of them, and they’re good jobs! Doesn’t that suggest there are too darn many of them, and the cost of maintaining those jobs are overpriced? Well, sure, but you can’t let them all go at once and push the dominoes over! Won’t we be back at this over and over again, throwing bad money after worse paying escalating ransom? (crickets…)
Moe Unting

WHy dont they make cars out of wood? A Canadian car, built of wood, wood-burning to be green, thus saving the environment, and keeping both the auto sector and wood sector alive.
Francien Verhoeven

“Second, as you pointed out, reporters who challenge numbers risk the appearance of bias. I can easily imagine an intrepid reporter who challenged the art community’s GDP assertions during the last election being tarred and feathered as an art-hating philistine or a neocon ideologue. ”

——————-

That’s an understatement!

This is what caught my eye today (trying to understand how people think, or perhaps how they would wish democracy works):

“Sometimes, it takes another column to respond to a columnist who doesn’t know what he is talking about. Lorrie Goldstein is an example of the latter. The separatist movement was founded by former federalists who were disgusted at never being listened to. Our tax money was as welcome federally as anyone else’s, but not our ideas. Mr. Harper’s plan to cut cultural funding was a threat to us, because in Quebec, culture is as important economically as oil to the West: it represents our survival. Now, both Stephen Harper and Michael Ignatieff know this. One dollar invested in culture is said to bring back $11 in the economy, which brings more in taxes alone than the original dollar invested. To Goldstein and Michael Coren: were you among those who came to Quebec City in 1995 to tell us that you loved us?

Richard Turgeon

editor’s response: (He didn’t cut cultural funding. He tried to reduce an increase.) ”

I thought this line was particularly interesting: “One dollar invested in culture is said to bring back $11 in the economy, which brings more in taxes alone than the original dollar invested. ”

The way he’s going about it, we might as well have the government throw around toonies which will bring in 22 dollars for every two dollars in government subsidy.

Well, why not throw around five dollar bills, ten dollar bills, twenty dollar bills – the economy would overflow with money to be taxed to the max! Round one blending seamlessly into round two, and three, four…………
Gerry Smith

Hey Paul.

I liked your page 11 joke.
And I tried to indulge it by clicking on the report abuse link to register my appreciation.
One of my favourite jokes is Dyslexics of the World Untie!
I thought by registering my faux outrage in the report abuse mechanism I might advance this guilty pleasure one happy level further.

Even when we are full of froth and the pearls are dripping there has to be a moment taken to appreciate a good bad joke when it is thrown disarmingly into the mix.

Then you can laugh and say, anyway, as I was saying…
Because it’s not like we really have any control over these things anymore, if we ever did.
The only thing that matters these days is consulting with the high priests of opinion polling to see what the entrails portend.

A good dyslexic joke will keep me happy for a few hours since I am safe in the knowledge that I don’t see the world quite the same way that most other people do.
hosertohoosier

They could have made a much stronger argument if they talked about the indirect impact of the auto job losses that are likely to happen. You know stuff like the 7-11 clerk in Oshawa that loses his job, the guys at the rubber plant, etc. That question is relevant, because if we want to get the most bang for our stimulus buck, we need to know which industries are the best choice for protecting jobs, ensuring long-term economic success. Incidentally, today’s job losses are tomorrow’s hires. The Canadian economy faces problems, but if we retool better than anybody else, and in the lead sectors of the present, we will be ahead of the game in 2011.
kody

Paul,

except, the single, simple way to avoid turning this into parroting, and adding a little skepticism, would be to a qualifier, or how bout an explanation of who the group is and what their motives are.

Much like the media almost universally does on issues not of a leftist bent.

“Right wing think tank” comes to mind.

Funny how there never, ever, ever, exists a “left wing” think tank. No. The qualifiers signifying special interests or suggestions of radicalism are reserved for the right.

Left wing/union/statist groups?

The media gladly parrots those without the big red warning signs the media’s reserved for more conservative groups.

And if it comes from the Harper government?

Well those are almost never facts, even if they are in fact….facts. No, then editorial license is granted and the words “claimed” (code words for ‘that’s what he says but we don’t necessarily believe him’) or similar such phraseology is added to the news.

Another fun one is the use of the “expert”. If you’ve ever seen a court trial where “experts” were called, you’d notice something interesting: Two very qualified guys will be saying the opposite things.

The newsfolks: they usually talk to one “expert”, the one who fits the narrative they want to tell.

Funny, we didn’t see any reference to “experts” or economists, ect. in any of the stories that parroted the unionist view.

Those are reserved for conservative leaning assertions, where it is a very commonly unsed to scrutinize/undermine the message – particularly when the message seems on its face to be realistic (unlike in the present case).

Sorry Paul Wells, but your excuses are frankly lame.

Simply put, the scrutinizing tools, and editorial license employed against the right, simply isn’t used against media pet issues.
kody

Woah,

actually in this instance its worse. Rather than properly identifying the highly partisan position of the messenger,

they whitewashed it,

describing them as an “arms length” group.

Not only not a red flag you’d see with a right leaning group, but the opposite: more media code words for “so you can take this to the bank as being legit”.

Today’s agenda journalists, converting their organizations to junk bond status, one bogus, highly partisan, credibility destroying, story at a time.
Dot redux

There’s a certain irony when non experts from the extreme not left wing complain about “lefties” not divulging their biases.
kody

The irony of an openly partisan commenter, showing frustration toward an entitiy that purports to be neutral, but in fact uniformly leans left, and in the process only “calls out” and identifies the non-left as being partisan?

Not seeing the irony there.
Canadians For Proper Media

Let’s eliminate the middle man – reporters who report what they are told, verbatim, no matter how incredulous or tainted – and get corporations, associations, and governments to fax to Maclean’s whatever they want printed, then print it verbatim. Why not? If basic fact checking and vetting sources is considered partisan, then I see no purpose for reporters.

Bush and Rove used this tendency of the media to sell their Iraq war and get re-elected. When the government was putting out “Orange Terror Alerts” and other nonsense, they knew they could count on the judgment-free media to just regurgitate the story with no thought to whether it was bunk or not.

In Ottawa, home of the militantly antiConservative unionized civil service, Citizen reporters have been accepting leaked government documents from individuals with the most preposterous of stories on how they obtained them. A pissed off bureaucrat could tell Pugliese that a Martian handed him a document, or it fell off a truck, and Pugliese wouldn’t question him.

Canada: where “good judgment” is considered an oxymoron.
Dot redux

Havving read your posts over many months on Maleans, I know your leanings. If I was to report elsewhere on your commentary (double spaced of curse), would it be fair for me to refer to you as “openly partisan” right wing commentator Kody, or would that reveal my bias?
de

Were the jobs losses in any other part of Canada the people there would be told to suck it up and move on, to relocate to where the work was. But Ontario, regardless of any structural changes in the economy, is entitled to better.
kody

So just to be clear:

scrutinizing, using “expert” intervenors, editorialzing mid story with opinion ect,

is good old fashioned hard news reporting (reserved for eeeevil conservatives who we must keep our eye on after all),

parroting unionist/leftist/statist stories, fine.

After all, to not parrot would be “biased”.

Remarkable.
kody

An example from right now:

the Globe and Mail, headline:

“Harper’s pessimistic talk making a bad situation worse, critics say”

The use of “critics”. Who’s the “critic”? John Macallum, a liberal MP and “former chief economist with the Royal Bank”. Wow, we know that criticism must be true then. Sure he’s a partisan liberal attack dog, but here, he’s just a humble former economist (a “chief” one no less).

The hit piece is then followed by Harper’s “evolving” positions. One liners, taken largely out of context, with the principal dishonest context that the situation itself has been “evolving”.

You see, every single leader’s statements will reflect “evolution” on the rapidly changing economy. But you won’t see any one line statements from them over the past many months.

What you also will not see, is the “evolving” standards of the media: from Harper is blind to our fears (from the past month or so) to “Harper’s pessimistic talk bad for us”.

Someone just said that all roads lead to bashing Harper, even if he’s doing what they asked him to do the day before?

Now who was that astute commenter?
kody

Another fun headline from Reuters (one of the leftiest out there):

“Canadian PM moves from cheer to gloom on economy”

Wow, being cautiously optimistic that our downturn won’t be as bad as other countries, is now historically being revised to “CHEER”, as in merriment, complete happiness, gleefulness.

Why?

Well of course the new narrative is that Harper’s irresponsible about the economy, cheery one day, “gloomy” the next, like a raving manic leader.

That’s “news” by the way. That’s not an editorial.

No concerns about the appearance of bias there, eh Paul?
Dot redux

An opposition party opposing. How scandalous.

I must have shorted out kody’s logic circuit board with my previous ignored and unanswered question.
Dot redux

kody, try this one – if a political leader of any stripe is principled (ie doesn’t govern or make decisions based on polls) why would they care if the media was “biased”?
kody

Dot,

an opposition is supposed to oppose,

but is that the media’s job? Although, I do appreaciate your confusion between the leftist media and their counterparts in their party of choice.

As for your second point,

the media is agenda driven. They try to influence people. It’s part of that “we’re gonna make a difference, man” mentality out of j-school, except the “difference” means taking a leftist veiwpoint.

Yet they do it under the guise of impartial purveyors of fact. I oppose it because its wrong. Does it affect public opinion? To many who don’t follow politics closely, yes.

Though as the public goes to alternative sources and is able to compare and contrast (say a website that will have the whole PM’s address, versus the “news” version with just the bits and pieces that the media wants to use to make him look bad, interlaced with negative commentary) it is increasingly the media that is losing out, rather than on affecting the agenda/people’s opinion.

When old media had a lock, they had a much, much greater impact on opinion. Now they’re just killing their brand equity.
Dot redux

Yet they do it under the guise of impartial purveyors of fact. I oppose it because its wrong.

It seems to me you are taking issue more with one’s choice of adjectives (and your interpretation of them) than fact. A thesaurus may help.

But there are many choices of media available to any reader/watcher/listener. It would seem to me to be self evident that in a competitive world with declining revenues, some would try to differentiate themselves – maybe less so today with alternative sources as you point out. They are not all going to look like the Western Standard, the National Post or the Sun papers. Isn’t that obvious to you? I don’t think your thesis needs to be rehashed constantly.