Good timing vs. bad timing
Union head, MP disagree on timing of sale of GM shares
Unifor Local 222 president Ron Svajlenko says the federal government should have held on to its shares in General Motors until product was guaranteed for the Oshawa Assembly. Oshawa MP Colin Carrie says the money will go toward balancing the federal budget.
By Graeme McNaughton/The Oshawa Express
Was the timing of the sale of the federal government’s shares in automaker General Motors good? It depends on who you ask.
Ron Svajlenko, the president of Unifor Local 222 – the union that represents workers at the Oshawa Assembly – says that the sale was shortsighted and doesn’t make sense financially.
“The selling of shares is really just disappointing from a pure mathematical standpoint,” he tells The Oshawa Express. “Forget that I’m a union guy. If I’m a person who works as a physician in the city of Oshawa and I’m concerned about the overall health of the community, I would think that when a federal investment of tax money has been made to the scale that it was, the influence would be used to ensure there was a payback on that.”
Svajlenko adds that the sale is a stop gap measure by the federal government to plug a hole left by falling oil revenues ahead of the upcoming federal budget.
“So they sold this as quick as they could and they’ll put it in their books and things will look better than what they are,” he says. “But it’s like pulling out your gold teeth and buying food with it.”
While he agrees that the sale of the government’s shares was to help balance the books, Oshawa MP Colin Carrie says the sale was worth it. He adds that unlike the provincial government, which put the money from its shares sold earlier this year toward public transit and infrastructure, the feds will be putting its funds into its general coffers.
“We have a good balance sheet as far as transit and infrastructure goes,” Carrie says, citing $75 billion over 10 years the federal government has allocated for those sectors. “We are running on a balanced budget going forward.”
It won’t be known until the federal budget is announced April 21 what the government received for its shares. A report from The Toronto Star says the government will see net proceeds of $1.8 billion; however, a separate report from Bloomberg says the total investment between the federal and Ontario governments will come $3.5 billion short of its initial investment in 2009.
Regardless of whether the sale ends up in the red or the black, Carrie says his opinion of the initial investment was well worth it.
“Was it worth it? Was it worth the federal government coming to the auto industry’s rescue? Absolutely,” he says. “That investment helped save the automotive footprint not only in Oshawa, but in all of Ontario. We, as a government, took action to help secure it amidst the worst recession we’ve had in years.”
Svajlenko, however, says Carrie should have offered more support for Oshawa.
“I would’ve thought that there was more influence coming from him to put pressure on the government to apply pressure to GM,” he says. “They had the ability, but they just sold it.”
Goldman Sachs, which purchased the shares from the federal government, did not return The Oshawa Express’ call for comment.