The federal government would have to retain its stake in General Motor Co. and own shares in Canadian companies like Bombardier Inc. to protect jobs and make the manufacturing industry sustainable, according to Ken Lewenza, president of the Canadian Auto Workers. Lewenza believes that Canada has to follow the ownership model of Volkswagen AG, in which the German state of Lower Saxony owns a 12.7% stake, Automotive News data show.
When Lewenza, who heads the country's biggest private sector union, was interviewed on Nov. 23 in Bloomberg's Ottawa office, he said that more state ownership could mean stakes in Canadian banks. He explained that to maintain key industries, they have to use “every tool in the tool box today.” He believes that having partial ownership leads to more influence.
The products from Canadian manufacturers are more expensive overseas since their currency gained 53% against the U.S. dollar in the past decade and they’re facing increasing competition from China. Since Statistics Canada started keeping records in 1976, last October marks the first time that manufacturing jobs as a share of total employment dropped below 10%.
Bloomberg revealed that the Canadian government possesses a 9% stake in GM. Government figures reveal that it sold around 35 million shares last November and still owned 140 million shares on March 31. Lewenza said that Canada would have to limit capital inflows from entering capital resources like oil to stem further gains in the dollar. So that the currency will weaken, Lewenza is urging Bank of Canada Governor Mark Carney to print money. [source: Bloomberg]