Automotive News Canada - June 2019 - v2 - 11

* JUNE 2019

In moving to r&d from assembly,
Tariffs pain industry
with a lasting migraine Canada needs a transition plan
CONTINUED FROM PA GE 1

investment opportunities in
the automotive sector and
more broadly in the economy."

steel and 10 per cent on aluminum products, were
$1 BILLION HIT TO STEEL BIZ
announced in March 2018,
and imposed on Canada and
But Volpe said it will take
Mexico in June. The move
time for the parts industry to
triggered retaliatoreturn to a pre-tarry tariffs in a trade
iff position of relabattle that boosted
tive stability.
costs for companies
"It's a negotiatin all three couning victory for the
tries.
Canadian team,
At Concord,
but it's a fight
Ont.-based
which should
Clover Tool
never have taken
Manufacturing,
place because it
Vice-President
made it tougher
George Zeni said
for companies on
Clover Tool
the trade dispute
both sides of the
Manufacturing
cost his company
border to do busiVice-President
$30 million in lost
ness and make
George Zeni said
contracts over six
a profit in an
his company was
years.
industry where
"Obviously, that still owed $500,000 the margins are
in
tariff
rebates
is money that is
already very tight
from the federal
gone forever, and
... it left everygovernment.
the damage has
one in exactly the
FILE PHOTO
been done," Zeni
same boat because
said. "We are now
all are operatbidding on new contracts,
ing under the same business
but it's a lengthy process, and model in a competitive indusnothing is for certain anytry."
more."
The Canadian Steel
Producers Association said
WAITING FOR REBATES
the U.S. tariffs have cost the
Not even a federal governdomestic industry more than
ment commitment to provide
$1 billion in addition to lost
rebates to affected companies
investment and jobs.
was able to stop the bleeding,
In the automotive retail
parts suppliers say.
sector, the tariffs wreaked
Zeni said he is still owed
havoc on multimillion-dolmore than $500,000 in rebates
lar renovation plans by some
from the federal government.
dealers.
Even applying for compenBob Verwey, president of
sation is a lengthy, time-conOwasco Inc. - which owns
suming process involving a
Audi, Volkswagen and reccomplicated paper trail, he
reational-vehicle dealerships
said.
in Clarington, Ont., east of
"We have to show that
Toronto - has been waiting
steel we purchase passto develop 41 acres (16.6 hectes through our shop and
ares) and complete a second
back out and into the U.S.
phase of a $21-million expanbefore we can qualify for any
sion project.
rebates," he explained. "If
"We built a $9-million recwe take in 1,000
reational-vehicle
pounds of steel and
dealership and
produce 900 pounds
planned to folof product, we have
low up with phase
to show that it goes
two," Verwey
back into the U.S."
said. "But when
Navdeep Bains,
the tariffs took
federal minister
effect, we shelved
of innovation, sciit. We still plan to
ence and economic
move ahead, but
development, said
we are going to
eliminating tariffs
wait until things
will help kick-start Navdeep Bains,
settle down."
federal minister of
investment.
The delay also
"It improves our innovation, science caused problems
and economic
competitiveness
for local skilled
not only for Canada development, said trades workers
that with the tariffs because the projbut for North
out of the way,
America, because
ect, which had
investments will
these unjust and
all the necessary
return. The APMA's municipal approvunfair tariffs
Flavio
Volpe
said
imposed by the
als in place, had
that will take time.
Americans [were]
gone out to tender,
F I L E P H O TO
adding additional
Verwey said.
costs and making
"They had
us less competitive in North
quoted on the job and then
America and globally as well.
we had to pull back," he said.
Now that they've been elim"It will get done, but right
inated, that just makes our
now there is no timetable."
products more competitive in
- ANC
North America and globally
as well.
Toronto Bureau Reporter
"That will ultimately
John Irwin contributed to this
create more jobs and more
story.

GENERAL MOTORS' PLANS FOR OSHAWA
Things aren't all bleak, however. Toyota has
Assembly are a microcosm of the larger trends at
invested heavily in its Canadian footprint, to the
play in the Canadian auto industry.
tune of $1.4 billion. And most remaining Canadian
GM plans to build a track on part of the site,
assembly plants, with the possible exception of Fiat
providing a place to test the technology it develops
Chrysler's Brampton, Ont., factory, seem to be stafor autonomous vehicles, connectivble. But there's a caveat: The
ity and infotainment at its nearby
North American new-vehicle marOshawa and Markham, Ont.,
ket is declining. While it remains
FROM TORONTO
technical centres.
strong by historical standards, fallJOHN IRWIN
It's just the latest sign that
ing sales mean less vehicle promany in the industry increasingly
duction, which means fewer jobs.
view the Greater Toronto Area
Look, for example, at the 1,500
and nearby Waterloo as an
people who will be out of work in
emerging Silicon Valley North,
September after FCA cuts a shift
COMMENT
what with the abundant talent,
at its minivan plant in Windsor,
research universities and brilliant
Ont.
leaders in the fields of artificial intelligence, engiAs the market declines and as more assembly
neering and other crucial facets. It's no wonder
plants find themselves in danger of closing in the
that automakers and tech companies see a future
long term, the federal and provincial governments
in Canada when it comes to r&d.
must put an emphasis on helping displaced
But even as the tech sector booms, manufacautoworkers at assembly and supplier plants transituring continues its
tion into new jobs.
downslide. Oshawa
Like Oshawa, the Canadian auto sector appears
Governments
Assembly, which once
to be in a state of flux, one that will have winners
and losers.
need to support employed about 22,000
workers, will employ only
The feds and the Ontario government cannot
manufacturing,
300 when it transitions into afford to be reactive, offering to assist with transiand emerging
a parts plant for GM and
tions only after a company announces cuts.
suppliers.
Instead, they must be proactive to maintain
tech industries. other
This is a better outcome Canada's auto-manufacturing footprint while also
than what many assumed
training and educating Canadians for a rising tech
earlier in the year - a complete closure - but the sector. - ANC
fact remains that Canada will be down to nine
assembly plants come 2020. And thousands of
workers at Oshawa, its suppliers and other businesses that depend on the plant will be out of
jobs.
GM might increase the number of workers at
Oshawa as it gains more business for the plant,
General Motors' technical centre in Markham,
just as southern Ontario will likely continue creating Ont., represents the future of Canada's auto
jobs for those in the tech sector. But tech facilities
industry, and government needs to help
do not have the same jobs-multiplier effect as
educate and train Canadians for the road
manufacturing.
ahead. F I L E P H O TO

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Automotive News Canada - June 2019 - v2

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