Automotive News Canada - November 2019 - v2 - 3

SECOND FRONT

Is Oakville OK?
Unifor eyes new
product for the
Ford plant in 2020
contract talks,
saying 'it's all
about capacity'
BY JOHN IRWIN
TORONTO BUREAU

OAKVILLE, ONT. - FORD
Motor Co.'s sole Canadian
assembly plant will build just
a single model by 2022, down
from four this year, according to a top automotive forecasting company.
Joe McCabe, the CEO of
AutoForecast Solutions LLC,
said he forecasts that Lincoln
Nautilus
crossover
assembly
would move
from Oakville
to China in
2022, following the end
Joe McCabe:
of Ford Flex
If Nautilus
and Lincoln
production
MKT promoves to
duction at
China from
the suburban Toronto Canada,
there could
plant this
be more
year.
layoffs for
With no
product read- Oakville.
ily apparent F I L E P H O T O
to replace Nautilus production, that could put more jobs
at risk in Oakville, which
will have shed about 650 jobs,
or roughly 14 per cent of
its workforce, by early 2020
to adjust to the end of Flex
and MKT production and a
declining new-vehicle market.
"Without a replacement
product to backfill, we don't
see an uptick in Edge that's
going to [replace] any of the
lost volume," McCabe said.
According to McCabe,
Ford would build about
160,000 vehicles in 2023
should Nautilus production
move overseas, well short of
the 260,000 vehicles the plant
could build at full capacity.
Oakville workers assembled

237,446 crossovers in 2018,
according to the Automotive
News Data Center in Detroit.

MAJOR ROLE
The job cuts and falling
production figures are set to
play a major role in Ford's
2020 labour negotiations with
Unifor, which represents the
4,600 or so workers at the
plant. Unifor President Jerry
Dias said the union would
be seeking clarity from Ford
about its plans for the plant
ahead of 2020 contract talks
so that the two sides can figure out how to "put people
back to work" at Oakville.
"Ultimately, it's all about
capacity," Dias said. "We
have excess capacity at the
plant, so the question is,
what are they going to do
about that?"
In an October interview
with Automotive News
Canada, Ford of Canada
CEO Dean Stoneley said the
Oakville plant is "a real success" for the company and
said it would remain a "vital
part" of the Michigan automaker's manufacturing footprint. (Note: The interview
took place before Ford confirmed the end of Flex and
MKT production later that
month.)
"Like any plant, we take
the long view," Stoneley said.
"When we look at a plant,
we're looking at what we're
building today and looking at what the next generation of products are. We're
always taking the long view
on things."
Kristin Dziczek, vice-president of industry, labour and
economics at the Center for
Automotive Research, said

SEE NEW PAGE 22

Canada production a back-burner
priority in FCA-PSA merger
Crowded North American vehicle
market likely means the effects
on Canada's auto manufacturing
won't be felt anytime soon
BY JOHN IRWIN
TORONTO BUREAU

A BUSINESS CASE FOR BUILDING AND
selling more vehicle brands in Canada would
likely take some time to develop in the wake
of the Fiat Chrysler
NEWS ANALYSIS Automobiles-Groupe
PSA (FCA-PSA) merger
announced in October.
"There's not a lot of room to have yet another brand over here," according to Sam Fiorani,
vice-president of global vehicle forecasting at
AutoForecast Solutions LLC.
And with European-based leadership, vehicle
production in Canada will be a low priority, said
Kristin Dziczek, vice-president of
industry, labour and economics
at the Michigan-based Center for
Automotive Research.
The merger would create the
world's fourth-largest automaker, but industry analysts and
insiders expect little immediate
impact on Canada's automotive
Mark
industry.
Nantais:
No one should expect FCA's
Ontario assembly plants to sud- Merger is
designed
denly start cranking out new
to help FCA
Peugeot models or for DS cross- and PSA
overs (DS is Groupe PSA's precope with the
mium brand) to hit the North
high costs of
American market anytime soon, developing
Fiorani said.
fuel-efficient
"FCA already supports six
and
brands over here, so adding
self-driving
another brand or two would be
vehicles.
difficult. If you brought over the F I L E P H O T O
DS, you'd be competing with the
same segments as Jeep," he said. "There's not a
lot of room for more cars to be added in North
America, and if you're adding crossovers or
trucks, you're already playing into FCA's strong
point."

OVERSEAS DECISION MAKING

According to AutoForecast
Solutions, the Ford plant
in Oakville will eventually
build only the Ford Edge
crossover. P H O T O : F O R D

TRANS-CANADA NEWS

Groupe PSA CEO Carlos Tavares would be
the chief executive of the combined company.
Having a CEO make decisions about production
from Europe instead of in Michigan could complicate things for Canadian plants in the long run,
Dziczek said.
"The [FCA] CEO is Mike Manley now, but the
[PSA-FCA] CEO will not be Mike Manley, and the
decisions will be made in Europe and not North

PHOTO: GREG BOUCHER

A highly competitive North American market
means PSA production (DS 7 Crossback
pictured) and sales in Canada and the
United States are far off, said Sam Fiorani,
vice-president of global vehicle forecasting at
AutoForecast Solutions. P H O T O : D S A U T O M O B I L E S

America," she said. "But, it's going to take a long
time, and the North American footprint is probably the lowest priority at the moment."
Fiat Chrysler Automobiles and Groupe PSA
agreed in October to a merger to create an automaker valued at about $65.9 billion (US $50 billion). The new, combined company would have
sold about 8.7 million annual vehicle sales in 2018,
placing it behind just Volkswagen, Toyota and the
Renault-Nissan alliance globally.
Should the merger go through, the automaker
would sell 13 brands globally.
The two automakers see the merger as a way
to pool resources in an increasingly costly era
marked by investments in new platforms, electrification and autonomous-vehicle development, as
well as tightening emissions standards and growing trade uncertainty.

STRENGTH IN NUMBERS
"What we're seeing here is a reflection of what
it's going to take to participate in the future of
vehicle manufacturing and the transportation
industry," said Mark Nantais, president of the
Canadian Vehicle Manufacturers' Association,
which represents the Detroit Three automakers
in Canada.
FCA in particular has long been seen as behind
many of its competitors on electric-vehicle development. For years, it has sought a competitor to
merge with, coming up short in attempts to woo
General Motors and Renault.
"There's only so much money," Nantais said.
"So, companies have to look for partnerships
where they can best position themselves in the
marketplace for the future."
PSA and FCA said the merged company could
achieve cost reductions and efficiencies without
having to close any plants globally. Despite that
promise, some analysts have voiced skepticism
that it would avoid closures at low-volume plants
in Europe, and unions there are worried about job
losses.

5,000 KILOMETRES OF STORIES

Greater indoor service
for far-north dealership

Yellowknife Motors' Dealer Principal
Greg Boucher said the dealership
will be the only one in town to have
drive-through service bays and an
indoor vehicle-delivery area. It's
scheduled to open in late November.

11.19

YELLOWKNIFE, N.W.T. - AFTER
nearly two years in the making, the
new location of Yellowknife Motors is
scheduled to open its doors at the end
of November.
While the previous location had
7,000 square feet (650 square metres)
for selling Chevrolet, Buick and
GMC vehicles, the new location is on
the town's main retail corridor and
has 30,000 square feet (2,790 square
metres).
Two drive-through service lanes
and three delivery bays allow custom-

ers to be served indoors as much as
possible.
"We will be the only dealership
in town with drive-through service
bays and a dedicated indoor new
vehicle delivery centre," said Dealer
Principal Greg Boucher, "which is
important in our environment as it is
cold six months of the year ... when
we're lucky." - Stephanie Wallcraft

Consumer financing deal
speeds the spread of Solo EV
VANCOUVER, B.C. - LOCAL
electric vehicle maker
ElectraMeccanica has a deal with

SEE LITTLE PAGE 22
FreedomRoad Financial, a specialty
vehicle lender, to provide consumer
financing for its Solo three-wheel electric vehicle in the U.S. market.
FreedomRoad Financial, a unit
of Evergreen Bank Group of Illinois,
describes itself as a national power-sports lending company providing retail loans through authorized
Triumph, Husqvarna and KTM dealers.
The Solo EV, which has an asking price of US $15,500 (about $20,000),
has a maximum range of 160 kilometres and can cruise at highway speeds,
ElectraMeccanica says.
Company CEO Paul Rivera

SEE TRANS-CANADA PAGE 11

Automotive News Canada - November 2019 - v2

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