The opening describes provides information about the importance of manufacturing in the Canadian economy, including some trends in manufacturing that worry some people. For example, during the past three decades, industrial output has increased, but factory employment has decreased. The factors that may explain this trend are described in this opening case.

1. Explain in your own words the developments during the last decade that have created problems for Canadian manufacturing.

2. Consider the following statement: “The Canadian government should have intervened even more aggressively in the automobile industry (and in other manufacturing industries) in order to maintain employment.” Do you agree or disagree with the statement? Explain your reasoning.