TORONTO — Amid a series of good-news announcements for the struggling Canadian auto industry, Canadian Auto Workers president Ken Lewenza says he’s concerned that the recent jump in car sales is nothing more than a “blip.”
Lewenza, who was re-elected as national president of the CAW on Thursday, said he’s concerned the popularity of a U.S. scrappage program is simply pushing demand for new vehicles forward, and once the program ends — the U.S. government is already developing plans to wind it down — sales and production will slump again.
“I’m crossing my fingers that this little blip on sales isn’t something that’s temporary,” he said.
“With all the incentives, between the clunker program and the direct manufacturers’ incentives, I always worry that we’re pulling vehicle sales ahead because you can’t get a better deal and then somewhere down the road we’ll hit a wall.”
Lewenza confirmed that the Chrysler plant in Windsor, Ont., is ready to begin producing right-hand drive minivans for the European market as soon as it’s given the go-ahead.
“We’re expected to build them any time. I don’t have the date right in front of me, but I know there’s an urgency to get them going,” he said.
“I know (Chrysler CEO Sergio) Marchionne, when he talked to me directly a few months ago, he said he was going to do what he can to sell our vehicles in those (European) markets, including the minivan, so I think it’s great news.”
Chrysler said it does not yet have an announcement to make regarding the right-hand drive minivan.
The Windsor plant was retooled late last year and was supposed to begin producing the vans in early 2009, but those plans were put on hold as Chrysler began a restructuring process that eventually saw it enter bankruptcy protection in the U.S.
The company, which has since partnered with Italian automaker Fiat and emerged from bankruptcy, has been increasing production in response to improved demand over the last few weeks. Lewenza said employees at the minivan plant will go back to working full time next week.
General Motors’ Canadian employees received their own good news this week when the company announced it will hire back 350 workers at the CAMI plant it operates jointly with Japan’s Suzuki in Ingersoll, Ont.
The reintroduction of the third shift at CAMI — as well as news that workers at GM’s plant in Oshawa, Ont., will be asked to work overtime into October — was a direct response to increased demand generated by the U.S. government’s so-called “cash for clunkers” program, which offers consumers up to US$4,500 to trade in old cars for new fuel-efficient models.
It’s been so popular that the $1 billion initially slated for the program was used up within two weeks and the U.S. government quickly earmarked another $2 billion to keep it running.
The Canadian government is currently evaluating the effectiveness of its own small scrappage program.
Meanwhile, Hyundai Canada has announced it will offer between $500 and $1,000 in savings, depending on the vehicle, as an incentive for consumers to scrap old cars for new, fuel-efficient Hyundais.
GM offered a similar program in 2007, but it has since been discontinued.