Granton, Nova Scotia: Michelin North America (Canada) Inc. today announced two new projects at its Michelin Pictou County site… These projects, valued at $9 million and $12 million respectively, will add 150 new positions at the Michelin Pictou County site, and will make permanent 200 temporary positions that were slated previously to end in 2020.
—Michelin Media Release
October 23, 2018
Quick now. Totals anyone? Who’s been keeping count? I used to — back before the numbers of loans, grants, incentives, payroll rebates, forgivable loans, forgotten loans, grants by other names and the full fantasy spectrum of inventive financial fandangoes became too numerous, their titles too inventive and their terms too complicated for me to even keep up.
The latest here-you-go installment was semi-revealed last week when Michelin trumpeted the news it would be creating a new winter tire line at its Pictou County plant, along with launching “an innovative process for semi-finished material.” Buried in paragraph nine of the release was the obligatory thank you to the Province of Nova Scotia “for its support”: this time a $3.56-million “innovation rebate,” as well as some unspecified additional cash from some often-picked provincial pocket for “training some of the new employees for these projects.”
It goes with saying that Michelin is the second most successful tire maker in the world, that it doesn’t need such sweeteners but demands them because it can, and that the Nova Scotia government, which presides over an economy that is the seventh worst in the country, is inevitably quick to say, “yes, sir,” and “how much?” whenever Michelin speaks.
And, of course, “anything else, sir?”
It has been ever thus.
Back in the 1960s when then-PC premier Robert Stanfield created a crown corporation called Industrial Estates Limited to “drag Nova Scotia, kicking and screaming, if necessary, into the 20th century,” the simple, simplistic and ultimately doomed dream was to goose the province’s economy by handing over buckets of money to footloose foreign multinationals who would set up shop here and create prosperity for us all.
Over the next two decades, more than 60 companies — Sweden’s Volvo, England’s Crossley Carpets, India’s Anil Hardboard, America’s Reynolds International, Canada’s Clairtone Sound Corporation and Deuterium Heavy Water Plant, among others — all came and eventually went (often under), adding too little to the economy and too much to a provincial debt that will never be repaid.
Besides those many ventures, there were even more almost megaprojects: the Shaheen Oil Refinery, for instance, the Stoddart Island Nuclear Power Plant (intended to be “the largest power plant in the world”) and the Fundy Tidal Power Project (Baron Edmund de Rothschild’s grand scheme to harness the Bay of Fundy tides with our money). Thankfully for generations still unborn, those ones never became anything more substantial than political hot air.
And then there was — is — Michelin.
At one level, of course, Michelin is an amazing economic development success story. Since its opening in Nova Scotia in 1971, it has provided ongoing, well-paying jobs in three plants spread across rural Nova Scotia. Long the largest private sector employer in the province, Michelin claimed its latest expansion announcement last week will push its total workforce here past 3,600, “the highest level in our almost 50-year history.”
So, it’s good news. Except…
Except that that good news has come at a huge cost, and not just in terms of the hundreds of millions of taxpayers’ dollars doled out to keep Michelin from picking up its manufacturing plants and moving them elsewhere. There has also been — perhaps more significant — the incalculable cost to our provincial sovereignty and self-respect.
It began with the initial deal to bring the secretive, “anti-union by instinct and paternalistic by practice” French company here in 1971. Although the total investment in Michelin’s first two plants was valued at $100-million, taxpayers — through Industrial Estates ($50-million) and various federal and provincial grant programs — ponied up more than $65-million of the total.
But that wasn’t all. The then-Liberal government gave the company special permission to bring in some of its own non-union workers to prepare the plants. And it called a special legislature session at the company’s request to outlaw picketing at the Michelin construction site.
Eight years later, when the United Rubber Workers’ Union appeared on the verge of unionizing one of its plants, the by-then Progressive Conservative government introduced what became known as the “Michelin Bill,” specifically tailored just for the company to make it impossible for any union drive to succeed.
In what has since become a familiar, and blatant, carrot/stick, tit/tat scenario, the Buchanan government — just one day after introducing its company-appeasing legislation — grandly announced the company had agreed to build a third plant. With more government funding to ease its corporate burdens, of course.
One reason, among many (and many of them, to be fair, a credit to the company’s generally generous treatment of its workers) that unions were never able to win majority support of the company’s Nova Scotia employees was a very real fear, stoked by company officials, that if they ever voted to unionize, Michelin would simply shut down and move to wherever the subsidies were sweeter.
Michelin has used the same tactics — with the same measure of success — on provincial politicians. Every one of the nine Nova Scotia premiers of all political stripes since 1971 has bent over backwards and forwards to placate the company.
Even including NDP premier Darrell Dexter. When his government took power in 2009, he was asked if he would repeal the 1979 Michelin Bill, the still-in-effect law his supporters in the labour movement still wanted repealed.
Dexter’s answer: “I have no interest in fighting battles that happened 30 years ago.”
Two years later, Dexter did bait the Michelin man ever so slightly, introducing relatively routine-in-other-places legislation to allow an arbitrator to set a first contract in cases where management or the union refused to bargain in good faith.
Michelin responded with a massive public and private lobbying campaign, predicting apocalyptic consequences if the legislation passed. After the legislation passed, in fact, there were rumours the company was considering “reduce its investment” in Nova Scotia. In July 2012, the company even ominously publicly postponed a planned announcement relating to its Waterville operation without suggesting a new date.
By January 2013, however, with a provincial election looming, Dexter found a way to make nice with Michelin in the usual way — the province contributed $9-million worth of taxpayer dollars to support a $73-million expansion that would generate just 50 new jobs. And Dexter had his picture taken with the Michelin Man. Crisis averted.
That didn’t save the NDP government, of course, which was beyond saving by then.
When Stephen McNeil’s Liberals replaced the NDP later that year, one of their first orders of business was to rescind Dexter’s first-contract legislation.
And so it goes.
It is hard not to wonder if we are really better off. Or if we might have been better off if we’d maintained our sovereignty and self-respect, if we hadn’t become so economically, politically beholden to a huge international company that knows we no longer have any choice but to dance to its tune.
Well that may be, but thanks to our visionary governments now we have our very own Convention Centre, and soon HRM will have a huge football stadium that will attract thousands of paying fans from all over the Maritimes.
Soon we will have a new hospital to replace the Centennial and Dixon buildings which we like to imagine will cost about $2b – another successful P3 project, just like all those schools. If you build it, they will come, right?
I wonder how Michelin would fare if anyone in the NS government subjected it to the same in-depth financial analysis this government used to wreck our once prosperous film industry? (You know, the one PriceWaterhouseCoopers said brought more money into the province than it cost?)
Michelin provides a much bigger bang for the buck. If it unionised there would be no complaints. The auto industry receives massive subsidies around the globe and I don’t recall Mr Kimber ever writing an article complaining about the money poured into the auto sector in Ontario and Quebec for the past 60 years.
Every country provides subsidies/grants to employers/industries.