Ian in the library… And out of it…

There is a report making the rounds on how the GM deal is a black day for the Canadian auto industry:

One of the key pillars supporting Canada’s long-standing competitive advantage in the auto industry began crumbling Wednesday, less than a week after another one collapsed.

General Motors Corp. and the United Auto Workers reached a deal that shifts the burden of retiree health-care costs for U.S. workers to the union. The agreement dramatically reduces GM’s burdensome cost structure and once it’s followed by Chrysler LLC and Ford Motor Co. , will reduce the health-care advantage Canada has used for more than a generation to help lure automotive investment to this country.

It comes just days after the Canadian and U.S. dollar reached parity, vaporizing a competitive advantage that buttressed billions of dollars in investment in the automotive heartland of Southern Ontario.

Oh no! the world is ending… except that it isn’t. GM has been in Oshawa/Windsor/Southern Ontario for a long time and invested a lot of money they’re not just going to pull up shop and leave regardless of comparative advantages.

The fact of the matter is that if this deal helps General Motors survive and if GM can be bothered to build cars people actually want to drive there is every likelihood that there will be more investment across the board in GM’s operations (to say nothing of the fact that currency fluctuations occur all the time). These reports are nothing but alarmist sensationalism…