Automotive News Canada - July 2020 - v2 - 6

* JULY 2020

Dealerships
push the reset
button on
staffing

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ONGOING WEB COVERAGE

CONTRACT
TALKS
As Unifor and the Detroit Three prepare for contract talks later this

Recovery begins at a time of year when sales traditionally are slower,
said John Hairabedian of HGregoire group. "If there's pent-up
demand, I'm sure we're going to have to increase staffing."
FILE PHOTO

Demand for new
vehicles and the end
of wage subsidies
will dictate how many
employees are needed
By JOHN IRWIN
TORONTO BUREAU

DEALERSHIPS BEGAN TO
rehire employees in May as provincial shutdown orders eased,
but with fewer sales and administrative staff than they needed
prior to the pandemic.
"At a point, you go, 'I don't
think it's going to get back
to 100 per cent,'" said Steve
Chipman, CEO of the Birchwood
Automotive Group in Winnipeg.
"How many people do we really, really need?"
Dealers were
assessing what
their businesses would look
like in the coming months
as economies
gradually
reopened amid
a global panChipman:
Operating
demic, which
led to mass lay- "bare bones"
through the
offs in autopandemic
motive retail
showed
beginning in
Birchwood
mid-March.
Group
Most dealers were begin- management
which jobs
ning to rehire
were most
by early May
necessary.
according to
FILE PHOTO
surveys by the
Canadian Automobile Dealers
Association (CADA). Its June 29
survey of 425 dealerships showed
that 86.3 per cent of dealers have
put employees back on payroll.
But for many dealers interviewed by Automotive News
Canada the number of workers
they ultimately rehire will depend
in large part on how sales rebound
in the second half of the year.
Some said there would be less
need for as many salespeople if
new-vehicle demand remains
below pre-pandemic levels.

OFF-SEASON RETURN
John Hairabedian, CEO of the
Quebec-based HGregoire group,
said the Canadian economy is
likely to begin recovering as the
auto industry enters what is traditionally a less busy period for
new-vehicle sales. The pandemic
hit Canada beginning in March,

COVID-19

HARD-CAP REHIRES

But he warned that the wage
subsidy, which has been extended
until December, could prove to be
less effective as dealership activijust as it was about to enter the
ty increases.
traditionally hot spring new-vehi"We've started the convercle market.
sation with the government on
"If there's pent-up
whether there is a way
demand, I'm sure we're
the [wage subsidy] can be
going to have to increase
scaled according to revestaffing. But what does
nue. For instance, implethe ramp-up look like?
menting lower subsidy
And one thing to note in
levels at revenue declines
Canada is that as sales
of 20 per cent and 10 per
ramp back up, they'll be
cent," Reuss said in a stateramping back up countment.
er-cyclically with seasonReuss: The
Many dealers said
ality. We're sort of off-sea- Canada
reduced demand and an
son now."
Emergency
eventual end to governChipman, who said
Wage
ment support could put
Subsidy is
his group permanenta hard cap on how many
"the main
ly laid off about 10 per
cent of its workforce, said driver by far" employees they bring
back.
for bringing
stores operating "on a
"I'm more worried
employees
bare-bones basis" during
back to work. about the fall," said Trent
the first several weeks of
FILE PHOTO
Hargrave, general managthe pandemic allowed his
er of Riverside Chryslergroup to examine which
Dodge-Jeep-Ram in Prince Albert,
positions were necessary. As an
Sask.
example, he cited delivery man"As government starts to
agers responsible for delivering
retreat some of its support, we
vehicle to customers.
may see some businesses increase
their layoffs. That's the part that
DOUBLE DUTIES
worries me."
"The argument was the sales"I don't see this changing this
person would be selling another
calendar year. I don't see some
car instead of delivering the car,"
bouncy rebound. I don't see the
Chipman said. "Now you [think],
it's a salary, and why can't a sales- V- [shaped recovery] that we were
kind of hoping for, not in our
man now, when business is slowindustry."
er, deliver the vehicle?
Hargrave expected new-vehicle
"In fact, the salesman [has]
demand to continue to be soft as
built a relationship with a custhe long-term economic situation
tomer and maybe if the salesman
wants to build on the relationship, remains foggy.
"New-vehicle sales are tied to
he should be delivering the car,"
jobs and how people feel about
he said.
their ability to earn income in the
New-vehicles sales fell 45 per
future, that impacts their willingcent in the second quarter comness to buy a vehicle today," he
pared with the same period last
said.
year. Still, dealers said demand
"Until we get a clearer line of
was beginning to rise from the
sight on what's going to happen
depths of April, when new-vehito the job market, we'll have to
cle sales plunged 74 per cent from
adjust." - ANC
a year earlier due to stay-at-home
orders and, in some provinces,
mandatory shutdowns of new-vehicle showrooms.
According to the June CADA
survey, most dealerships had
begun to rehire workers and most
stores were offering on-premises vehicle sales. CEO Tim Reuss
credited the Canada Emergency
Wage Subsidy for putting most
dealerships in a position to rehire
workers. The subsidy covers 75
If the rebound is not robust -
per cent of wages for employers
and wage subsidies end - then
who lost at least 30 per cent of
layoffs are likely to increase, said
their revenue compared with a
year earlier, up to $847 per worker Trent Hargrave, general manager
of Riverside Chrysler-Dodge-Jeepper week.
Ram. P H O T O : G I A N C A R L O PA W E L E C

summer, FCA is cutting a shift in Windsor, Ont., and uncertainty
grows over the future of production of the Ford Edge utility vehicle
at the company's plant in Oakville, Ont.

U.S.
COVID-19 CASES SPIKE
While the number of cases continues to fall in Canada, they are

surging in the United States. How the country - and its economy - handles the virus in the near term could affect Canada, which
exports a vast majority of vehicles and auto parts south of the border.

GOODBYE OPTIMA, HELLO K5

Kia sees its next-generation midsize sedan as such an upgrade
over the Optima that the name is
changing. Kia presented the 2021
K5 in a virtual event in late June.
"The K5 celebrates this bold, new
chapter in Kia's history with an
equally bold name to emphasize PHOTO: KIA
the midsize sedan's revolutionary
design, all-new safety and performance-enhanced N3 platform,
turbocharged engines, available all-wheel drive and high-impact
technology." It will be available this fall in LX, EX and GT-line.

MAGNA PLACES THIRD, FIVE YEARS RUNNING

Once again, four Canada-based auto parts makers landed on
sibling publication Automotive News Top 100 Global Suppliers
List: Magna International Inc., Linamar
Corp., Martinrea International Inc. and
Multimatic Inc. The four companies
were on the list for the last two years.
Magna International Inc., based in
Aurora, Ont., maintained its third-place
PHOTO: MAGNA
ranking for the fifth consecutive year
and is the only Canadian company in the top five. Bosch, Denso,
Magna, Continental and ZF Friedrichshafen remain the world's
five biggest suppliers.

HEY, ALEXA! WELCOME TO GENERAL MOTORS
Owners of Chevrolet, Buick, GMC and Cadillac vehicles with
compatible systems from the model
year 2018 and newer can add Alexa,
the voice-controlled virtual assistant
from Amazon. Customers will be able
to link their account to the vehicle and
access it via the voice-command button on the steering wheel or through an P H O TO : C H E V R O L E T
icon on the touch screen. Alexa Auto
will use the embedded available 4G LTE connectivity the automaker's vehicles.

GRAND CARAVAN'S EXIT KILLS 1,300 JOBS

Unifor says 700 of its members at the Fiat Chrysler Automobiles
minivan plant in Windsor, Ont., have accepted early-retirement
packages, but about 600 more have been laid off as the automaker, on July 13, finally made good on a promise to end Grand
Caravan production. Unifor Local 444, which represents about
6,000 hourly workers at the plant, says the 700 include production
workers, skilled trades employees and those in the Fiat-Chrysler
Auto Transport unit. The plant had operated with three shifts since
1993, but it's down to two with the end of the midnight shift to
build the Grand Caravan. The plant now builds only the Chrysler
Pacifica and Voyager.

BRANDS BOYCOTT FACEBOOK IN PROTEST

Following the leads of their U.S. counterparts, the Canadian arms
of Ford, Honda and Volkswagen are not advertising on Facebook
during the month of July. The companies are among dozens of
advertisers across multiple industries that have said they are boycotting the social media giant for failing to prevent the spread of
disinformation and hate speech. Honda and VW specifically called
out Facebook and Instagram, saying they would drop advertising
for the month of July. In a statement, Ford said hate speech, violence and racial injustice in social media content need "to be eradicated." - ANC

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Automotive News Canada - July 2020 - v2

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