Protecting jobs in Canada should be the highest priority for the federal government when discussing a potential bailout package with automotive manufacturers, according a web poll of 115 Canadian CEOs conducted by COMPAS Inc.
The financial crisis has been so devastating for auto manufacturers that management teams in both Canada and the U.S. have approached federal governments for bailouts. Many pundits are demanding conditions be applied to any public funds used to help auto manufacturers, and 40% of the CEOs in the poll said protecting the Canadian share of North American production is the most crucial requirement.
A further 35% said Ottawa should receive ownership rights it could later sell when company stock rises. A guarantee to build a higher share of environmentally friendly vehicles earned support from 11% of the respondents, while 9% said none of the above.
The CEOs were also asked to provide Prime Minister Stephen Harper with advice for how to handle talks with automakers. Some of the respondents were harsh in their assessment of the auto industry. “It is not taxpayers’ fault the automakers are in trouble. The automakers suffer from bad management and it is not up to taxpayers to bail them out,” wrote one.
Others favoured some form of aid with restrictions attached. One CEO said to wait and see what happens in the U.S. before taking action, while another wrote: “Get a real guarantee that they will not move the work due to Congressional pressure.” Yet another said an automotive bailout should be a coordinated effort by governments around the world: “Canada alone cannot save any of the Big 3.”
The respondents were also asked for the advice they would give to the CEOs of General Motors, Chrysler and Ford. The panelists were far from sympathetic. “You never changed with the times. You didn’t produce a car that the consumer wanted, and you allowed the unions to ruin the auto industry,” wrote one respondent.
“Change top executives and bring in new, innovative, young people who have true vision and passion to turn around these organizations,” wrote another. Many recommended the companies file for bankruptcy and restructure.
The panelists also faulted the Detroit CEOs for their chosen method of transportation (corporate jet) to ask for a bailout from Washington. About 40% of the respondents said the CEOs should have flown economy class on a commercial flight, while 30% said business class. Only 12% agreed with the decision to use corporate jets. “Flying by private corporate jet is common for CEOs of many global companies for a variety of reasons, including security, efficiency, flexibility etc.,” wrote one respondent. “I would not advise them to have done it differently.”