Now, wages in the automobile industry are made up of two components, what we call base rates and the cost of living factor which is fed in by the operation of the escalator.

I might say that when the settlement was made the Nixon administration issued what they called a second inflation alert in which the General Motors settlement was branded as being inflationary and bad for the country.

Now, wages in the automobile industry are made up of two components, what we call base rates and the cost of living factor which is fed in by the operation of the escalator.

Well, first of all the Dominion Bureau of Statistics made a survey in the spring of 1970, which showed that on balance the difference in the cost of living between Canadian cities and American cities was 5 % to the advantage, of course, to the Canadian cities.

And so we said to General Motors that the solution had to be a first year increase, which had to be sizeable because we bad to catch up with the lost position as against the cost of living and we had to make some progress.

When we came then to the 1967 negotiations we had the problem of one market between two countries fully under the control of the American companies that owned the facilities on both sides of the border.