The profitability of automotive manufacturing in Canada, 1972-2007

This report reviews the longer-term financial performance of automotive manufacturing in Canada, dating back to 1972, and continuing through 2007 (the latest year for which industry-wide profitability data is available from Statistics Canada – and the last year prior to the onset of the global financial crisis and the current recession). [...] Concerns over these legacy costs have featured prominently in discussions regarding the restructuring of the industry in the face of the credit freeze and the financial fragility of several global automakers. [...] Yet because of the absence of a reliable system through which the sustained profitability of auto manufacturers during those years could be converted into a 2 secure long-term funding base to underwrite the promises made to workers at the time (namely, that the compensation for their labour included pension and health benefits to be paid after retirement), the workers who underwrote that sustained [...] Historic Profitability at General Motors and Chrysler in Canada Until the late 1990s, the Canadian subsidiaries of the major automakers in Canada reported summary financial performance indicators to the public. [...] In the case of General Motors, the longer-term financial picture can be fleshed out somewhat further, on the basis of internal financial data (covering four years of operations around the turn of this century) which was provided to the CAW in the course of collective bargaining discussions between the company and the union.