Automotive News Canada - September 2020 - 9

* S E P T E M B E R 2020

Suppliers face pandemic head-on, and win
During the spring
manufacturing
shutdown, the
stability of the
supply chain was in
question, but those
same companies
are credited with
getting the industry
back on its feet
By JOHN IRWIN

AUTOMOTIVE NEWS CANADA

CANADIAN PARTS MAKERS
"led the way" in bringing auto
manufacturing back from the
depths of an unprecedented two-month shutdown by
embracing extraordinary levels of transparency and communication with their customers and competitors, executives said.
Now, as production volumes approach pre-pandemic levels, those lines of communication will remain critical as the industry braces
for a potential second wave of
COVID-19, said Flavio Volpe,
president of the Automotive
Parts Manufacturers'
Association (APMA).
"For the most part, we've
managed that," he said, referring to the economic fallout of
the pandemic. "I don't know

that we can handle another
shutdown, to be honest, without some sort of major intervention."
As North American vehicle sales have bounced back,
suppliers have raced to fill
orders for automakers hoping
to make up for lost new-vehicle production and address low
inventories at dealerships.
It has been far from easy for
suppliers whose finances were
hammered in the second quarter by the shutdowns as they
prepared for the United StatesMexico-Canada Agreement.

Flavio Volpe of the Automotive
Parts Manufacturers'
Association: "I don't know
that we can handle another
shutdown, to be honest,
without some sort of major
intervention." F I L E P H O T O

But the industry has so far
avoided the worst-case scenarios that many feared in March.

SURVIVED BY TALKING
North American suppliers
credit their perseverance, in
part, to open lines of communication. This was particularly
true for Canadian parts makers, which had already been
communicating during the
North American trade negotiations, said Rob Wildeboer,
chairman of Martinrea
International Inc.
"I would say the supply
base in many ways led the
way" in getting auto manufacturing running again,
Wildeboer said.
"There was very good collaboration with the governments and with the unions,
because if we want to get the
economy running again, we
had to be at the leading edge
of that."
That sentiment was shared
by Magna International Inc.'s
CEO, Don Walker, who told
sibling publication Automotive
News that the industry was
largely back to business as
usual, widespread capital
issues aside.
"When the virus first hit,
because of the communication
of the renegotiation of NAFTA,
a lot of people very quickly
decided we should get together
and start having conversations
about what should the indus-

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"I would say the supply
base in many ways led
the way" in reviving auto
manufacturing, said Martinrea
International Chairman Rob
Wildeboer. "There was very
good collaboration with the
governments and with the
unions." F I L E P H O T O

ing within our facilities, and I
think we're doing a really good
job of that," Hasenfratz said
during an August quarterly
earnings call with analysts.
Still, it is not smooth sailing
for companies up and down the
supply chain. Tim Galbraith,
sales manager at Cavalier
Tool & Manufacturing Ltd.
in Windsor, Ont., said that
while his company is in "better shape than we ever have
been," that is largely because
of the company's nonautomotive business.
Over the past several years,
Cavalier expanded into powersports products such as motorcycles, ATVs and personal
watercraft. Booming business
there has offset weaker business on the automotive side,
where automakers have canceled and postponed some
model releases, Galbraith said.
The supplier diversified so
that it could withstand downturns in the auto industry
such as this one.
"Thank goodness we did."

try do," Walker said. "Up until
the discussions about NAFTA
and, most recently, the virus,
it was very difficult to get peoA SECOND WAVE?
ple on the same page and in
the same room talking."
The industry as a whole
By April it became
still faces uncertainty in the
clear that the industry was
months ahead. A potential
approaching this
second wave of
crisis differently
COVID-19 is of parfrom those in the
ticular concern,
past. Companies
Volpe said, for comwere open to sharpanies with operaing best practices
tions in the southwith each other.
ern United States,
For example,
where cases spiked
U.S.-based Lear
over the summer
Corp. that month
as their economies
made public its
reopened. Some of
51-page "Safe Work
the business that
Playbook" for
suppliers have
reopening its facsecured in recent
Hasenfratz: "The
tories so that othmonths is driven by
ers in the industry, key is to stop any
automakers looking
including Canadian chance of the virus
to stockpile parts
suppliers, could use spreading within our in the event of a
facilities, and I think southern U.S. plant
it or adopt practicwe're doing a really
es from it.
being forced to shut
good job of that."
"It was critical
down, he said.
FILE PHOTO
in keeping everyStill, many in
body in the loop
the industry said
and coordinated
the practices now
on a restart," the
in place to limit the
APMA's Volpe said.
spread of the virus
"You would never
at auto plants, as
see that in reguwell as lessons
lar times, [sharing]
learned from the
some of your secret
two-month stopsauces in how you
page, make another
keep your workindustry shutdown
place open under
less likely.
duress. But I think
"There is some
Galbraith: Cavalier is science to how we
everybody underin "better shape than handle living with
stood that if we
we ever have been"
didn't all go back
this disease," Volpe
to work safely, any largely because
said.
one of us could trip of nonautomotive
"Social distancbusiness. F I L E P H O T O ing and masks and
everyone else up."
safe work protoDON'T LET UP
cols are working. The empirical data is there. Now, how the
Linamar Corp. CEO Linda
industry responds to demand
Hasenfratz said health and
fluctuations is a lot less easy to
safety protocols have allowed
predict.
about 90 per cent of the com"If we have a second wave
pany's employees to return to
and nobody shows up in the
work and have prevented seridealerships, all your operaous outbreaks at its plants,
despite health restrictions gen- tional plans mean nothing."
erally easing worldwide and
- ANC
"a few positive cases" popping
- Hannah Lutz and Alexa St.
up.
John of Automotive News con"The key is to stop any
tributed to this report.
chance of the virus spread-

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Automotive News Canada - September 2020

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