Two weeks ago, residents of the Windsor, Ontario region learned that Ford would not be bringing a new engine program to the two Ford assembly plants in the area. Although the small engine program was a long-shot from the start (it had apparently been destined for Mexico, but union officials tried to “steal it away”), news reports and enthusiastic publicity campaigns from union head Jerry Dias had given the impression that the new engine deal was all but sewn up. For residents of the auto-dependent city, with an unemployment rate of 8.9 percent (compared to 6.5 percent nationally), the decision was a blow to their collective morale.
A few hundred miles away, the stage was being set for an announcement by Honda Canada. A small car program would be coming to their plant in Alliston, north of Toronto, worth $857 million (CAD). The government would contribute about 10 percent of that. In return for the government grant,
While no new jobs will be created from this investment, it does safeguard the future of Alliston for a considerable amount of time. The Honda announcement also embodies two trends at play in Canada. The first is that big subsidies for auto manufacturing plants are on the decline for now. Ford’s small engine plant was apparently hobbled by a “big ask” from the Blue Oval. Honda’s grant, at around $85 million, is relatively small. Chrysler got nothing during their most recent attempt to get governments to chip in for a revamped Windsor minivan plant. In the end, they went ahead with Windsor anyways. Many in the pro-union camp argue that generous subsidies are the only way to attract auto investment and compete with the Southern United States and Mexico, who are keen to throw money at any auto assembly plant coming their way.
But the past year has seen Canada go from “the most expensive place to build a car” to a jurisdiction with a currency that now sits at roughly 10-15 percent lower than the U.S. dollar. This reduces labor costs while making exports more competitive for Canada, while reducing the outright need for generous government “investment” (though don’t think that will stop auto makers from trying). What was once considered a dying sector propped up by government cash now appears to have a future. Sort of.
GM is still almost certain to pull out of Oshawa in 2016, once their obligation to the Canadian government runs out. Ontario has also failed to attract a brand-new assembly plant since Toyota opened their Woodstock plant roughly a decade ago. But Ford has invested nearly $1 billion in the Oakville plant that produces the Edge, and Toyota is going to start producing the Lexus RX in Cambridge. Chrysler will not only build the next-generation minivan in Windsor, but its Brampton plant will likely crank out the 300, Charger and Challenger until the end of the decade.
For a stretch of time, Ontario looked to be the next Australia, with its auto manufacturing sector driven out by exorbitant costs (some of them related to a commodity-driven economy). But for now, things appear to be on the up.
Oakville. Ford. New investment and product on-line.
Windsor. Ford. v-8 engines. Any new products?
St Thomas. Ford. Closed down.
Brampton. Chrysler. Good until the end of the decade, at least?
Windsor. Chrysler. New investment and a guaranteed product.
Mississauga. Chrysler. Parts. Closed.
Ajax. Chrysler (seats?). Closed.
St. Catharines. GM. Long gone.
Scarborough. GM. Long gone.
St. Therese. GM. Long gone.
Oshawa. GM. Uncertain? This location has the longest history and was the largest of its kind in Canada.
Ingersoll. GM. New investment and new product. Suzuki partnership ended.
Quebec. Hyundai assembly. Long gone.
Nova Scotia. Volvo assembly.Long gone.
Barrie. Volkswagen parts. Long gone.
Cambridge. Toyota. New investment and guaranteed product.
Alliston. Honda. New investment and new product.
So should the definition of an import brand be revised?
GM is still building engines in St. Catharines.
I was going to say; St. Catharines Powertrain on Glendale is still open and does reasonable volume.
Last I checked:
* 4.8, 5.3, 6.2 & 7.0L V8s
* 3.6 and 2.8L (do they still use the 2.8?) high-feature V6s
I think they make a transmission as well.
I don’t know if the Ontario St. plant is still in operation. Last time I was there it looked like a set from Robocop, and not in a good way.
You counted St. Therese twice (Hyundai and GM). Some of the plants you mention have been gone for 20 years. Didn’t Renault also build cars in Quebec in the 60s and 70s?
Hyundai in Bromont. GM in St Therese. About 100kms apart.
Renault assembled in Bramalea and Brampton when they ‘took over’ AMC. They may have had a small assembly facility in Quebec in the late 60’s or during the70’s. Hopefully someone else can confirm this.
Forgot to mention the original AMC plant in Bramalea, taken over by and closed by Chrysler.
St Catharines, GM. Stand corrected. 1 still open, 1 closed.
As for parts.
Linamar. Operating.
Magna. Operating
Martin Rea. Operating.
A.G. Simpson, still operating after massive restructuring.
Collins & Aikman. Closed.
Philco. Bought out and not operating in Canada.
And who can forget Houdaille Industries?
Ford has two engine plants in the Windsor area; Windsor Engine and Essex Engine. Both make large engines though. I wouldn’t be shocked to see one or both eventually close with production moving to Romeo.
Not reassuring developments. I wonder when Thailand will be included in the mix?
For Ford engine production?
Anything it appears these days. They are moving a lot of production there
They aren’t getting large engine production, ever. Subcompacts and the Ranger/Everest is the extent of what you’ll see built there for the time being.
Interesting what they will send there in the future as other companies are moving some production there
You’re missing Woodstock (Toyota, makes the RAV4) and Ingersoll (CAMI, GM/Suzuki; makes the Equinox, Terrain and formerly the Grand Vitara)
You forgot Ford Ontario Truck. Closed.
Didn’t Ontario Truck just get incorporated into Oakville Assembly? Or at least part of it?
RIP F150 Lightning
There used to be a separate Paint shop. The body shop was under the same roof as Oakville. The new Paint and Body shop for Ontario truck got shut down. The old Oakville Assembly Plant was retooled while the Freestar was running. So the new additions in the mid 1990’s are gone except for the body shop. The building for the Paint shop was ripped down in 2012 while I was there. The body shop was gutted in 2013 – there were still Freestars hanging out. There still are sections of OAC with Freestar body parts hanging out according to my friends there, even after they gutted the old body shop (Ontario Truck and Oakville Assy got coined ‘Oakville Assembly Complex’ by Frank Gourneau when he was the plant manager and when Freestar had their unplanned shut down). That place was a trip. In 2012, it looked like you cold flip a switch and resume Freestar production. Robots were in mid cycle assembling those pieces of sh1t.
Good thing they didn’t flip that switch. If only there was a switch that would have prevented the Freestar from being built in the first place.
“So should the definition of an import brand be revised?”
The definition of Honda as an import brand should be revised. They seem to exist in Japan only as a mere formality.
A bit of Googling suggests Ajax was sold off to Lear, but is still operating. True for a lot of that kind of parts plant.
GM is still building engines in St. Catharines.
I’ve made this point before, but as far as automaking is concerned, Ontario is effectively Michigan with a different currency. Just so long as there is an assembly and supplier infrastructure in the Rust Belt, there is a place for automaking in Ontario if the exchange rate is reasonable.
Australia is a small market in the middle of nowhere. It only had an auto industry because there were barriers to protect it; now those barriers have been reduced to the point that there is no reason for the OEMs to stick around. The exchange rate doesn’t change this.
In contrast, Canada is attached to and shares a border with the largest auto market in the developed world. Free trade killed Australian production, whereas it helped Canada (the US-Canada auto pact bolstered Canadian auto production.)
In reality the exact opposite is happening . I would assume more and more will be moved to Mexico, as it is part of NAFTA. Canada as one of the main players in Automobile production is slowly diminishing
Cambridge has assembled the Lexus RX 350 for about 10 years. It will start assembling the RX 450h hybrid version in the near future.
The relationship between the Detroit Three and the CAW has been poisonous since the ’80s and show few signs of improving. That has to factor into Ford and GM thinking. The Honda and Toyota plants are union free.
…and spam-blocked.
OT but fix the glitch that’s deleting at least half the comments that’s been occurring for at least 6 weeks one of these years, Derek.
Thanks.
What makes you think that he can do anything about it? You think that he likes having to deal with the glitches and the complaints when he has no power to address them?
This is an IT problem. If you actually care, then direct your gripes at Vertical Scope management and its IT department for failing to deal with the spam filter. It would appear not to be a high priority.
I do see some parallels between the Canadian experience and the Aussie experience.
The first one is the use of cheaper labour.
The second one is the relocation or rationalisation of vehicle production.
Why would any company want to have the unnecessary cost of maintaining smaller facilities? Why would a company want to produce in a country where minor movements in currency does affect the bottom line?
Here in Australia we’ve liberalised our vehicle market for 30 years now. It did do okay when our currency was valued more reasonably.
Marecelo gave us some interesting insight into the future with his comment regarding the massive FCA plant in Brazil, that’s the future.
Why not move these plants to an environment with more stable industrial relations? Cheaper wages?
We can still do the product design and development and keep the high paying jobs.
I do see the Canadian’s gradually adopting the Aussie stance by removing barriers and most importantly huge handouts. If those jobs can’t stand on their own feet, then let them fall.
Rationalisation, less protection and less handouts/subsidies is the future. It’s all the taxpayers money, not industries and in particular the Socialists/Unionists.
Why would any company want to have the unnecessary cost of maintaining smaller facilities? Why would a company want to produce in a country where minor movements in currency does affect the bottom line?
Here in Australia we’ve liberalised our vehicle market for 30 years now. The industry performed acceptably when our currency was valued more reasonably, with large hanouts/subsidies.
Marecelo gave us some interesting insight into the future with his comment regarding the massive FCA plant in Brazil, that’s the future.
Why not move these plants to an environment with more stable industrial relations? Cheaper wages? We can still do the product design and development and keep the high paying jobs.
I do see the Canadian’s gradually adopting the Aussie stance by removing barriers and most importantly huge subsidies. If those jobs can’t stand on their own feet, then let them fall.
Rationalisation, less protection and less handouts/subsidies is the future. It’s all the taxpayers money, not industries and in particular the unionists.
Marecelo gave us some interesting insight into the future with his comment regarding the massive FCA plant in Brazil, that’s the future.
Why not move these plants to an environment with more stable industrial relations? Cheaper wages? We can still do the product design and development and keep the high paying jobs.
I do see the Canadian’s gradually adopting the Aussie stance by removing barriers and most importantly huge subsidies. If those jobs can’t stand on their own feet, then let them fall.
Rationalisation, less protection and less handouts/subsidies is the future. It’s all the taxpayers money, not industries and in particular the unions. If unions are that good where is there manufacturing businesses?
Marecelo gave us some interesting insight into the future with his comment on the massive FCA plant in Brazil, that’s the future.
Why not move these plants to an environment with more stable industrial relations? Cheaper wages? We can still do the design and development and keep the high paying jobs.
I do see the Canadian’s gradually adopting the Aussie stance by removing barriers and most importantly huge subs!dies. If those jobs can’t stand on their own feet, then let them fall.
Rationalisation, less protection and less handouts/subs!dies is the future. It’s all the taxpayers money, not industries and in particular the unions. If unions are that good where are their manufacturing businesses?
@Big Al from Oz,
Sore point in North America, Australia and Europe. Not many happy campers about moving production elsewhere
I’ve always been a proponent of moving production to more advantages locations that will result in greater profit, so I am happy to see that companies see it that way too.
Like BAFO wrote, the losers have to come up with a way to be more advantageous to the companies. Otherwise, production and jobs will go elsewhere. If the jobs go to Mexico, maybe more Mexicans will choose to stay in Mexico instead of coming over here illegally.
And what are the benefits of that except for the ‘executives’ collecting massive bonuses?
The employees lose through job loss.
The community loses as it loses jobs and taxes.
The consumer loses through inferior quality control.
The taxpayers lose through bailouts.
Even the shareholders lose.
I wont’ even touch your xenophobic comment about immigration.
How is that comment xenophobic? Maybe you won’t “touch” it because you don’t understand it.
I live near Windsor, so we hear automotive related news almost endlessly. At one point, a German car company was considering opening a plant in Ontario because the workers car manufacturing IQ is so high. That means better quality, less training, etc. But despite that, they opted not to build here. One of the main reasons they cited? They didn’t want to take a chance with a “militant union”…the CAW.
I noticed here in Oklahoma we give corporate welfare to land low-wage, part time work (the most recent is a department store distribution warehouse). At least when the Canadian government whores itself out to the auto makers there is the prospect of jobs with a living wage.
All of us GM Canada people , hourly, salary, active and retired,are waiting for the other shoe to drop.. The word , from the media is that Oshawa is closing the doors, somewhere around the 2017-2018 time frame. This info has neither been confirmed, nor denied by GM management.
As I write this, there is no new “product allocation” for Oshawa. So its not looking good.
The Flex is new and modern, as is the paint shop, combine that with a contiguous stamping plant. Now throw in an 87 cent Dollar. The UNIFOR contract allows inside vendors. A lot of sub assembly, and skilled, and unskilled maintenance is performed by outside contractors. The contract allows for a three tiered wage, and benefit system. I guess that’s part of the “poisonous” CAW” Eh “Gardiner Westbound”?
FYI..Gardiner….The CAW is long gone, replaced by UNIFOR. We have lots of anti union folks here at TTAC. For the most part, they usually have their facts straight.
My gut feeling, and throw in a little wishfull thinking? Oshawa will lose another 800 or so jobs, when the Consolidated plant closes in 2016 or sooner. The Flex is safe for the foreseeable future.
Both Oshawa#1 and #2 plants will be gone by 2017 for sure.
@LordDetroitofLondon….Forgive me for thinking that someone as informed as yourself, would know that Oshawa #1 and #2 were put together somewhere around 2007. Thus the name “consolidated plant”.
When the “Flex” plant was built,in 2009 huge sections of the plant were gutted back to the studs.
If you have some “facts” to back up your prediction, please share them with us.
Canada is probably just gun-shy about giving money to car companies after the Bricklin fiasco.
Good news for our neighbors to the Great White North. When oil prices are down, US car sales tend to be up, and the loonie tends to be down. All this is happening, and the future for the Canadian motor vehicle manufacturing business looks pretty good for the next business cycle.
Over a very long period all industries migrate as they mature. The New England, Swiss, Belgian and English textile and apparel industries are all long gone. The motor vehicle industry around the Great Lakes is still huge, but imo, its long term prospects are only fair.