---------- Forwarded message ----------
Date: Tue, 13 Jan 1998 13:19:18 -0800
From: Sid Shniad <[EMAIL PROTECTED]>
Reply-To: Forum on Labor in the Global Economy <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED]
Subject: NAFTA Woes
The Toronto Star January 12, 1998
Trading in tears
NAFTA WOES: FIRMS FIRE WORKERS IN
CANADA, HIRE THOUSANDS IN MEXICO
By Laura Eggertson
OTTAWA - Leading multinational corporations that slashed jobs in Canada
created more than twice as many positions in Mexico in the first decade of free
trade, according to a draft report obtained by The Star.
General Motors, Ford, Allied Signal, United Technologies, General Electric,
Rockwell, Dupont and 3M cut 18,462 jobs from their Canadian operations in the
years after Canada signed the trade deal with the United States on Jan. 1, 1988.
But they hired 47,045 people from 1990-96 in Mexico, says the report for the
International Labour Organization in Geneva.
Canada, the United States and Mexico passed the North American Free Trade
Agreement - which built on the Canada-U.S. deal - in 1993 and it took effect Jan.
1, 1994.
The study supports the contention of those who opposed both Canada-
U.S. free trade and NAFTA: Companies would divert investment from
Canada to lower-wage destinations.
"The general thesis is that workers from all three countries have been
adversely affected" in the free-trade environment, said Bruce Campbell, co-author
of the study.
Joyce Stokoe, 35, and Peter Pellizzer, 39, are among 9,854 GM workers who
lost their jobs in Canada when the firm cut its workforce here by 23 per cent
between 1990 and 1996 (the years covered by the latest statistics).
At the same time, says the study, GM hired 20,836 people at its low-wage
Mexican maquiladora plants. (Maquiladoras are assembly plants in a free-trade
zone set up along the Mexico-U.S. border to encourage foreign investment.)
Single mother Stokoe, who has a 10-year-old daughter named Breanne, lost
the $23-an-hour job inspecting cylinder heads she held for eight years when GM
closed its engine foundry in St. Catharines two years ago. She retrained herself at
her own expense.
Unlike U.S. workers, Canadians who lost their jobs as a result of free trade
did not get government assistance to equip them for a new career - something ex-
prime minister Brian Mulroney has said was a mistake.
Stokoe paid for a course to learn how to become a dealer at the new casino in
Niagara Falls, where she earns $8.50 an hour plus tips - bringing her average
wage to about $16 an hour.
But she lost GM's generous benefits and its flexibility over child-care
difficulties. "Our whole lifestyle's had to change," Stokoe said in an interview from
St. Catharines.
She now depends on her parents to help pay for things she used to be able to
give Breanne herself.
Pellizzer lost his job when GM closed its Scarborough van operation. Before
the 1993 shutdown, he earned $20 an hour on the assembly line and was able to
buy his own home.
After the plant closed, he went back to school to upgrade his skills. He took a
butcher's course, but discovered the only jobs available were part-time and
minimum wage. So he and a friend started a home renovation business. But work
slowed down for him, he says, so he's staying home with his 8-year-old son -- and
job-hunting again.
While it was downsizing in Canada, GM cut its U.S. workforce by 10 per
cent, according to employment figures Campbell obtained for 10 companies.
Only two of those 10 maintained or increased their level of employment in
Canada from 1990 to 1996.
"There are some winners, but the winners are a restricted minority," Campbell
said.
IBM is one of the winners. The U.S.-based firm added 582 jobs in Canada and
hired 1,200 people at its electronic assembly facilities in Mexico.
Chrysler Canada's employment levels have remained steady at 14,000 since
1990. But Canada also lost investment from Chrysler, as the company increased
its Mexican workforce by 8,331 jobs, up from 5,669.
Free trade supporters -- including the federal Liberals, who opposed the deal
while in opposition -- contend that export-related jobs have offset manufacturing
job losses.
Campbell, executive director of the Canadian Centre for Policy Alternatives,
argues the effects for Canadian workers go beyond job losses.
Many workers can find only part-time work.
But firms and stockholders have done well in the 10 years since the Canada-
U.S. trade deal was signed.
The increase in productivity that accompanied job cuts in Canada has
benefited senior executives and shareholders more than the workers, Campbell
says.
After the cutbacks, for example, productivity at GM Canada increased 88 per
cent. Compensation for the chief executive officer grew 247 per cent, while wages
in the auto sector increased by 33 per cent.
Other examples:
* At Ford Canada, the company cut 2,182 jobs, or 8 per cent of the
workforce. But employment jumped by 22 per cent in the United States and more
than doubled in the Mexican maquiladoras, where the company hired 11,688 more
workers.
Productivity at Ford Canada also grew by 88 per cent. But CEO
compensation rose 645 per cent, compared with the 33 per cent wage gains that
Canadian auto workers made.
* Allied Signal cut its Canadian workforce by 21 per cent, or 688 jobs. At the
same time, Allied hired 4,800 employees in the maquiladoras, a jump of more than
500 per cent in its Mexico operation.
Allied productivity also rose by 35 per cent in the company's Canadian
affiliate. CEO compensation grew by 550 per cent, while workers in the sector
gained about 22 per cent in wages.
* United Technologies cut its employment force at Canadian subsidiary Pratt
and Whitney by 15 per cent, or 1,442 jobs. The company slashed its U.S.
employment by 29 per cent. But in Mexico, United added 5,607 jobs over the
same period.
* General Electric reduced its Canadian workforce by 32 per cent, or 3,019
jobs. The company cut its U.S. workforce by 15 per cent. In Mexico, GE
expanded its labour force by 27 per cent, adding 1,766 employees in the same time
period.
GE workers increased their wages by about 16 per cent as productivity
increased by 112 per cent. The company's CEO compensation grew by more than
500 per cent.
