Automotive News Canada - June 2018 - 23

* JUNE 2018

Dias takes FCA's Marchionne 'at his word' to keep plants open Industry support
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Dias said FCA has
assured him the plants
will survive into the future
with product commitments,
though he did not say
whether the company has
pledged new products such
as a Jeep vehicle to either
factory. He said he has confidence in FCA CEO Sergio

Marchionne, a Canadian
citizen, wanting to keep
those plants open.
"I take him at his word,"
Dias said. "I doubt very
much that he would want to
see the fall of those plants
on his watch."
Both plants have
received investments from
FCA in recent years. As
part of 2016 labour negoti-

ations, the Brampton plant
was slated for a $325 million
retooling of its paint shop,
while the company spent
more than $1 billion to
retool the Windsor plant for
assembly of the next-generation minivan.
FCA's five-year plan
includes a new three-row
Jeep Grand Cherokee, a
midsize Ram pickup, sev-

eral new or updated Alfa
Romeos, a battery-electric Maserati sport coupe
and other new products.
Marchionne said FCA
would spend �9 billion ($13.7
billion) on a plan to electrify its lineup. - ANC
- Larry Vellequette of
Automotive News contributed to this report.

Dealers question the culture of big inventories
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"The notion of inventorying hundreds of vehicles is probably going to
be unrealistic on the part of [automakers]," he said. "I've looked at the broader [greater Toronto area] footprint,
and I think the massive parcels of land
anywhere in the major city centres in
North America, it's a myth. It's not a
possibility anymore. If anyone went out
to buy a five-acre plot of land anywhere
in the [Greater Toronto Area], you'd
have to really re-evaluate your thinking."
DAG did just that after it bought
a five-acre plot in 2010 on Queen St.
East in Toronto's Riverside neighbourhood, just east of the downtown
core. Alizadeh's original plan called for
building a traditional cluster of dealerships on the site for several of his
stores to move into. But as land values in Toronto skyrocketed to as much
as $25 million per acre, it soon became
clear that the traditional dealership
model would be unworkable on such
valuable land, he said.
DAG, which owns 10 dealerships in
Toronto's core, eventually partnered
with Streetcar Developments, a developer behind several real estate projects
in Toronto, to build condos on the site,
in addition to retail space for the dealerships and other businesses.
"The notion of partnering up with
them on condo units became our objective," Ailzadeh said. "We went along
that path, and it worked out so that
financially it brought the whole project
to a realistic level that made sense not

Shahin Alizadeh, CEO of Downtown
Automotive Group in Toronto, says
storing hundreds of vehicles is
prohibitively expensive.

and development committee in 2017
urged the city to reduce the number of
dealerships it allows to be built in some
of its major corridors. The report's
authors argued that dealerships, which
take up an average of 4.4 acres of land,
run counter to the city's goal of densifying neighbourhoods surrounding new
mass-transit routes.

DEALERSHIPS NOT WANTED

"Car dealerships are a low-employment-density land use that would not
maximize the productivity of lands,"
only us but for the [automakers]."
the report reads. "Automotive sales
Diana Petramala, senior researchis not a land-use that benefits other
er at the Centre for Urban Research
employment-area businesses, unlike
and Land Development at Ryerson
restaurants and financial services."
University in Toronto, attributes spikSmaller dealership footprints could
ing land values to foreign investors
serve as a workaround, though such
in Vancouver and domestic investors
sites come with their own challenges,
in Toronto, as well as generally high
said Matthew Lay, general sales mandemand and low supply in both cities.
ager at Mini Yaletown in Vancouver.
Alizadeh suggest a change in
The dealership is in the
thinking.
heart of Vancouver's trendy
"The [automakers] have
Yaletown district in a space
adapted their entire production
Lay said is about the size of
process to a just-in-time process.
a restaurant. While it is a
I think it's high time that the
prime location for the brand,
retail component looks at how it
which aims many of its vehican adapt to the new realities of Petramala
cles toward young city dwellthe marketplace and look at their
ers, moving inventory in and
partners on the OEM side and come up
out of the building is difficult. The dealwith a solution so we have a more prag- ership offers valet services and offsite
matic solution to inventory," he said.
appraisals to help with the lack of readDealerships could also be under
ily available parking.
pressure to downsize by municipali"Even our largest car is not that
ties as they look to make their central
big," he said. "We couldn't be a brand
business districts more walkable and
that had much larger vehicles because
denser. A consultant's report issued to
we couldn't get them into the building."
Toronto suburb Mississauga's planning
- ANC
PHOTO: DOWNTOWN AUTOMOTIVE GROUP

TRANS-CANADA NEWS 5,000 KILOMETRES OF STORIES
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In the 19 years since its inception,
the Calgary auto dealers' Vehicles
and Violins charity gala has raised
more than $4 million for local good
deeds. From left: Paul Valentine,
CMDA president and gala co-chairman; Jordan Romeril, CMDA
vice-president; Jason Evanson; Jim
Gillespie, CMDA executive manager; Cory Baum, gala chairman; Ben
Maitland, CMDA Foundation director; Morgan Scott, Ronald McDonald
House. P H O T O : H A R R Y P E G G

and Truck Show.
CMDA Executive Manager Jim
Gillespie said it's the first donation
made by the newly formed CMDA
Charity Foundation, "but it brings the

total amount donated over the 19 years
of the gala to more than $4 million."
Jason Evanson, CEO of the Calgary
chapter of RMH, said, "We knew we
were going to be the recipient of funds
from the gala, but we didn't know how
much it would be until just now, so
we've been counting the days until
today. This is fantastic."
- Harry Pegg

Ford signature concept store
'leaves nothing to chance'
SAINT-BASILE-LE-GRAND, QUE. -
After spending more than $8 million, Ford St-Basile opened its new
35,000-square-foot (3,250-square-metre) facility in May to become the first
in Canada exclusively built to operate under the new Ford Signature
Concept.
In addition to a modern waiting
area with café-bistro, there is also a
children's playroom and a training/
exercise room with modern equipment, and a locker room with private
showers.
"We left nothing to chance," said
Charles-André Bilodeau, co-owner and
president of Ford St-Basile. "The light,

Ford St-Basile left "nothing to
chance" in its new Ford Signature
Concept store. From left: Pierre
Trudelle, general manager, Ford
of Canada, Quebec Region; Tim
Witt, vice-president Ford Sales of
Canada; Charles-André Bilodeau,
co-owner and president, Ford
St-Basile; Étienne Borgeat, co-owner, Ford St-Basile; Yves Lessard,
mayor of Saint-Basile-le-Grand.
P H O T O : S T- B A S I L E F O R D

the sounds and even the smells were
the subject of reflection." Creating
more than 40 jobs in Saint-Basile-leGrand, the new store can accommodate 15 vehicles inside and 250 outside
and has 16 bays, including three bays
dedicated to trucks and two to vehicle
aesthetics. - Benoit Charette

for Ford comes
with a warning
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including the planned rise in the minimum wage to $15 per hour in 2019 and a
host of environmental and labour regulations.
The Conservatives, in power at
Queen's Park for the first time in 15
years, led by Ford, promised to freeze
the minimum wage at $14 per hour while
scrapping income taxes for those making
that wage, in addition to broad promises to "cut red tape
and stifling regulations." The party
also pledged to cut
the corporate-income-tax rate to 10.5
per cent from 11.5
per cent while eliminating carbon taxes
Industry leaders
and addressing high
warn that one in
energy prices.
six jobs is relat"I think that's
ed to the auto
attractive," Volpe
sector, and that
said. "Certainly,
Doug Ford and
from those of us that
the PCs should
are having to comtread carefully.
PHOTO: BLOOMBERG
pete with U.S. jurisdictions that are
dealing with lower corporate taxes than
last year, I think that's welcome."

SIGNIFICANT HEADWINDS
Ford's pledge to eliminate the Jobs
and Prosperity Fund was met with scorn
from the industry. The fund has dispersed more than $3 billion to manufacturers in a variety of sectors since 2014,
including $173 million to Ford Motor
Co. to retool its Oakville, Ont., assembly
plant, $110 million to Toyota Motor Corp.
for its upcoming investments in two
Ontario plants and $50 million to supplier
Linamar Corp.
"We are facing some very significant competitive headwinds," said Mark
Nantais, president of the Canadian
Vehicle Manufacturers' Association,
which represents the Detroit Three in
Canada. "The investment incentives
and support are not corporate welfare.
They're instruments and supports that
ensure Ontario is a place that remains
competitive to do business in."
Industry analyst Dennis DesRosiers
said the industry's importance to Ontario
should be obvious to political leaders,
regardless of who won the election.
"The auto sector is so important to
Ontario - one in six jobs in Ontario are
tied directly or indirectly to the auto sector - that the new premier will have to
play to the auto industry," DesRosiers
said. "The auto industry is the centre of
most industrial policy and will remain
so."
Frank Notte, director of government
relations for the Trillium Automobile
Dealers Association in Ontario, praised
several of Ford's proposals, including a
10-cent reduction in the gasoline tax.
"If people are under the impression
that there's a never-ending rise in the
price of gasoline, that might shift their
behaviour to smaller cars, while we know
trucks and SUVs are the big winners in
the market right now," Notte said.
Unifor President Jerry Dias said the
union would press Ford to keep his promise to fight for working-class people. He
warned that eliminating industry incentives would lead to "wholesale carnage"
in the auto industry.
"Working-class people are sick of
scripted politicians," Dias said. "But
working-class people will turn on him if
they see he's not on their side." - ANC
- Grace Macaluso contributed
to this report.

Table of Contents for the Digital Edition of Automotive News Canada - June 2018