Evidence of meeting #3 for Subcommittee on the Automotive Industry in Canada in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was honda.
A recording is available from Parliament.
Conservative
Executive Vice-President, Honda Canada Inc.
We have not laid off any of our permanent workers, both at Honda Canada and at our factories. The only adjustments we've made are with temporary or contract associates, where we have not renewed their contracts as they've come up.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
On the supplier issue, we asked Toyota about this earlier, and I'm curious to hear your take on this. If I heard correctly, you're generally supportive of the loans extended to the other manufacturers. There are some concerns about all of the different things we're doing in terms of making sure they're done in a way that doesn't create a competitive advantage for one versus another. Is that an accurate characterization?
Executive Vice-President, Honda Canada Inc.
We don't agree and we're not asking for anything, but we understand why it's necessary.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
More neutral, I guess, would be a better way of phrasing it, as Toyota did.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
In terms of your suppliers, could you estimate for me what percentage of your suppliers is shared with the other manufacturers?
Executive Vice-President, Honda Canada Inc.
It's very difficult for us to determine that, because we have a huge number of suppliers in Canada and the U.S. Of those suppliers, we're not sure what percentage of their business Honda represents. It's very, very difficult for us to judge what might happen.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Is it fair to say, as we've heard from others, that if one of the other big companies' manufacturers were to go down, there would be a significant detrimental effect to Honda suppliers and to Honda indirectly because of that?
Executive Vice-President, Honda Canada Inc.
I think we'd be remiss if we weren't studying the various potential issues we'd be facing if that were to happen. Of course, we hope it doesn't, but we need to protect our supply chain.
Conservative
NDP
Brian Masse NDP Windsor West, ON
Thank you, Mr. Chair.
Thank you for appearing here today.
I noticed in your brochure that you're a very diversified company. Actually, in some respects, that's fairly unique to the hearings today.
There's some good news and bad news with that. The good news with this budget is that if you're a Canadian taxpayer and you re-sod your lawn, you can get up to $1,300 in savings, so your lawnmower industry might do well. The bad news is that the scrappage program is still at $300.
I want you to highlight a little bit the scrappage issue that you've raised, because it has come up as a regular theme in these hearings.
Executive Vice-President, Honda Canada Inc.
One of the fundamental principles of Honda, as I mentioned earlier, is to create blue skies for our children, so we have always believed very strongly in any activity that will help the environment. This is not new; it's not a bandwagon we're climbing on. This is something Honda was talking about 60 years ago, when he started the company. So even though we are an automotive company or we're a company involved with mobility, the company has always tried to have minimum impact on the environment, way before anybody started talking about eco-anything.
Basically, all we see is that a scrappage program is a must-have, from a philosophical point of view. Right now, we're looking for a stimulus that will get customers out purchasing something again. What a great combination. It's a win-win opportunity for everybody.
We believe the government is heading in the right direction with the $300 program, but if you look at Europe, where it's in excess of $3,000, or B.C., where I believe it's up to $2,000, we believe that kind of stimulus is necessary when there is no consumer confidence. People don't feel good. They don't want to go shopping right now—$300 isn't going to help.
NDP
Brian Masse NDP Windsor West, ON
Okay. And that's important.
I just have to note, though, that I'm not sure there would be a lot of counter-arguments about ATVs and Sea-Doos being actually environmentally friendly. But it is important to focus on what we can do for the automotive sector related to keeping people employed.
Now, you mentioned in your statement there that you've only laid off temporary workers and contract workers. We're trying to get an angle, in terms of the cost analysis, between the Detroit three domestically here, and there have been a lot of suggestions of what it really is, and a lot of information out there.
What percentage of your employees are contract or are temporary workers?
Executive Vice-President, Honda Canada Inc.
I don't have those numbers. Sorry.
NDP
Brian Masse NDP Windsor West, ON
Would it be a significant number, or would it be a small portion of your operations?
Executive Vice-President, Honda Canada Inc.
We have about 5,000, so maybe less than 10%.
NDP
Brian Masse NDP Windsor West, ON
Okay, and that's important.
What would your common worker get, for example, in your automobile division? What's the starting wage or what's the hourly wage? Would it be comparable—I asked this of Toyota earlier—to that of the Detroit three in Canada?
Executive Vice-President, Honda Canada Inc.
I'm sorry, I'm not involved in the manufacturing side.
Executive Vice-President, Honda Canada Inc.
The only answer I can give you to that question is that every time we have an opening, there's a lineup of people at the door. So we have no shortage of people looking to work at the factory.
NDP
Brian Masse NDP Windsor West, ON
Could we maybe get that tabled later on when you come back to the committee: what an average worker would make with regard to a starting salary and what they would climb to in the organization?
Executive Vice-President, Honda Canada Inc.
I don't think we want to make that public knowledge.
Brian Masse NDP Windsor West, ON
Well, I think your workers probably would.... I mean, we can go around that way and get it. I find that a little disappointing, because I think we could get that indirectly. I don't think it's a big corporate secret, by any means.
You are asking for government funds this time; it's the first time in your history. I don't disagree with the analysis of financial lending to the credit aspects of your own divisions versus that of going to a separate body. It worries me going to the BDC. There hasn't been a tremendous success rate of projects—I know in my own riding—that have gone to BDC support in the past. They've only just backed up bad, high-interest bank loans, which has really caused a lot of problems for tier one and tier two suppliers.
Perhaps with that, what would be the difference you'd like to see if it went to your own credit application process versus that of somewhere else? Would it be more efficient to get out? Would it be lower costs for consumers? What would be the net public benefit of going to your institution for the injection of money to back those loans for leases and purchase of vehicles versus that of a stand-alone institution that's different, that we have to create?
Executive Vice-President, Honda Canada Inc.
I don't believe we're looking for any money. I think what we're looking for is the government to provide the security or to alleviate the risk for us issuing commercial paper in the markets. Honda has a double-A rating. Our rating has not deteriorated. Our captive finance company is as profitable and as capable as it has ever been. What is happening right now is basically the access to funds, which we are trying to solve by ourselves. But right now customers are suffering because of this.
