The Five-Legged Sheep; Michelin Tire in Nova Scotia (Round One, No.7)

Publisher:  Development Education Resource Services, 1539 Birmingham St., Halifax, N.S., Canada
Year Published:  1977
Pages:  12pp   Price:  .35   Resource Type:  Article
Cx Number:  CX489

This study outlines the history of a single-family based multinational whose entry into Nova Scotia as the largest private employer has led to the establishment of the "Pictou County Mafia."

Abstract: 
This study outlines the history of a single-family based multinational whose entry into Nova Scotia as the largest private employer has led to the establishment of the "Pictou County Mafia." As part of a consortium of multinationals, they are intent upon challenging labour relations in the province. Their power is quite clear as is the pattern of their action. Over the past four or five years they have seriously weakened the functioning of the Labour Relations Board.

The present issue of Round One is only the first of a three-part study of the company . Michelin has been manufacturing tires since before 1900. Yet it only began a substantial penetration of the North American market in 1966 when it formed an agreement with Sears. The first introduction of Michelin to Nova Scotia came only after extensive research into the business life of the province. Their entry came at the end of decade of substantial international capital investment in Nova Scotia: Stora Kopparberg's kraft mill at Point Tupper: Gulf's deep water terminal and refinery there was well as General Electric's heavy water plant; and Scott Paper's pulp operation at Ambercrombie.

The authors believe the major factor in multinational interest in the region lies in the nature of its underdevelopment. "Corporate costs…..are reduced by government concessions and grants, minimal resource royalties, an unorganized work force, and in some cases, slightly lower wages than in the centre." The fact is that, according to the authors, Michelin's investment in the Nova Scotia plants probably amounts to only 16-33 percent of the total. The rest is made up of these "benefits." The reason Michelin located in Pictou County seems to have been based on the area's social stability (i.e. lack of strong union history).

The main point of the study is to under line Michelin's attempts to restrict labour organizing in its factories, or indeed among any of those multinationals with whom it has entered into an agreement to work together on labour questions. Earlier Michelin had been instrumental in creating an employer council of nine major global corporations who pool information on international unions for developing strategies for negotiation as well as for lobbying. It appears that Michelin has been quite active in Nova Scotia in lobbying for amendments to the Trade Union Act and in blocking any amendments counter to its own interests. The first such action was an effective block of certification of their own Operating Engineers through an amendment in 1973 announced just one day before their hearing! This led to a series of actions which has almost negated the effectiveness of the Labour Relations Board. Applications from workers at Sobey's and Gulf were also denied eventually. Eventually the "Michelin regulation" was removed after angry protest by labour but they have kept up the pressure through lobbys at the Labour/Management Study Committee to assure favourable labour policies.