The New GM and the Redefinition of Nafta

1 06 2009

We now know who will control the equity of the new General Motors. Ownership will be divided as follows.

60 per cent U.S. government.

12.5 per cent The Canadian and Ontario governments.

17.5 per cent United Auto Workers.

10 per cent Unsecured bondholders.

0 per cent Existing GM shareholders.

0 per cent– government of Mexico.

I’m wondering what the implications of this arrangement for Nafta are. During the 1990s, Canadians got used to the idea that North America consists of three countries, not just Canada and the United States. These three countries shared an integrated automotive market. (The three amigos summit, an annual meeting of the leaders of the three nations, was premised on the  idea that North America really was part of North America). Mexico lacks even a token stake in the new, reorganized GM. The symbolism is striking. Moreover, because the Mexican government hasn’t a seat at the table, it will be powerless to prevent manufacturing jobs from being repatriated back to the USA by the new, more politicized management of GM. (Canadian governments acquired an equity stake largely to avoid such job losses– I don’t know if it will work. Americans are, sadly very nationalistic. When push comes to shove, they may well prefer to save jobs in Michigan at the expense of non-Americans in Ontario).


Actions

Information

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s




%d bloggers like this: