On Wed, 30 Dec 2015 22:24:56 -0500, wrote:

On Wed, 30 Dec 2015 13:51:21 -0500, Ed Huntress
wrote:


I don't doubt that, Clare, but we're mixing up two different periods.
The Can./US Auto Pact was a deal to get volume up and costs down in
Canada, so cars could be exported profitably to the US. It was
declared illegal by the WTO in 2001. As far as I know, production cost
for complete cars was never lower from Canada.

What happened after that was pretty much a straight cost and market
decision, based on the free trade rules in NAFTA.

Low price doesn't come into the equation - with
health care and other benefits, and the highly unionized workforce,
cars can be assembled for MUCH less in either Detroit, Flint, or
Alabama.

Again, be careful about which period you're talking about. Since the
WTO action, the Canadian dollar gained twice and fell twice against
the US dollar. When the C$ versus US$ was low, we did a lot of volume
in parts -- even after the outlawing of the Auto Pact.

How low does the Looney have to go? We are down around seventy two
cents right now.

Only a few short periods where we were above parity - and never very
much. OK, it was $2.78 in 1864, Sinse then I think it hit $1.08 or
$1.10 for a few hours or days in Nov 2007 , but also went down to
$61.9 in 2002,

As I said, there are other factors involved now in the decisions. Cost
was a major factor before the rescue of GM and Chrysler. To analyze it
now I'd have to spend a lot of time doing research. I am digging back
into the business side of the industry over the next few months, but
I'm not focusing on Canada.

If you followed my point, it was that, since the WTO action and the
bailout, the vulnerability that Canada faces in the automobile
industry has been exposed. You can't rely on the health or the
decision-making process of the US auto industry. They've been tossed
around by economic winds themselves.

--
Ed Huntress