Motor Coach Industries Expands Winnipeg Plant

Motor Coach Industries (MCI), the largest North American manufacturer of highway buses, announced on January 31 that it is committed to a $40 million expansion of its Winnipeg manufacturing plant. Half of the capital for the expansion comes from grants and loans to the company made by the federal, provincial and municipal levels of government as part of a deal struck last year to entice MCI to stay in Manitoba. (Slightly over half of the $20 million in government money consists of outright grants.) The other part of that deal consisted of wage concessions imposed on the MCI workers, largely through the personal intervention of Manitoba Premier Gary Doer, who was instrumental in breaking the resistance of the workers.

The expansion of the Winnipeg plant will mean that production of MCI-built Greyhound buses will be consolidated in Winnipeg at the expense of the company's facilities in Pembina, North Dakota and Sahagun, Mexico. The Pembina workers refused to make concessions and thereby get into a bidding war with workers in Winnipeg.

The company did not announce how many jobs would be lost at its North Dakota plant. However, the plant will remain open because the U.S. and North Dakota governments both have "Buy American" policies which stipulate that a certain percentage of manufacturing of any products they buy must take place in the U.S.

Despite the large infusion of public capital into the MCI facility, no level of government will acquire an equity position in MCI. Nor has the company given any guarantees that it will not ask for more government handouts in the future to keep its Winnipeg plant operating. Furthermore, neither the federal nor provincial government has launched a challenge of the "Buy American" policy of the U.S., despite the fact that such provisions violate the North American Free Trade Agreement.