Jerry Cook Editor, MPP jcook@clbmedia.ca

Ottawa must support automotive sector

The Canadian automotive industry is under seige from mounting competitive and cost pressures, including the need to meet new environmental standards, and unless the federal government stops dragging its feet and moves quickly to support the industry, current and future investment in the sector could be put at risk.

That was the warning in recent submissions from the Canadian Automotive Partnership Council (CAPC) to the federal, Ontario, and Quebec governments. According to the CAPC submissions, it will cost auto makers $100 billion (U.S.) during the next 12 years to meet new vehicle fuel efficiency standards recently introduced by the U.S. government.

Noting that the U.S. government will provide from $10 to $20 billion in financial assistance to help U.S. auto plants meet the new environmental standards, CAPC said in its submission that auto makers in Canada will also need financial assistance from Ottawa to innovate and retool their facilities to meet the new standards.

“Canada lacks the competitive fiscal and innovation policy framework needed to meet short reinvestment challenges and the transformative innovation changes that will be required to address new environmental standards from within North America and beyond,” CAPC was reported as saying during a presentation to the federal and provincial governments. “If similar support measures are not made available to Canadian operations, the business case for maintaining production mandates will become that much less attractive as U.S. facilities gain this additional competitive advantage.”

While the federal government’s recent 2008 budget included $250 million over the next five years for the auto industry to support research and development of new green technologies, no other financial aid was earmarked for the beleagured automotive sector.

However, meeting new environmental standards is only one part of the problem facing the Canadian automotive sector. As well, the recent agreement between the Big Three auto companies of Detroit and the United Auto Workers union in the U.S. has made labour costs in Canada even higher (media reports have indicated by as much as $25 an hour) compared to U.S. labour costs.

At the same time, increasing costs and growing competition from offshore compounded by the high value of the dollar have sparked a wave of plant closings and job losses amongst auto makers and parts manufacturers in recent years. While the Ontario government has responded with initiatives such as its $650 million next generation jobs fund, the federal government, up until now, has refused to provide funding directly to the automotive sector.

For example, Ford Motor Company of Canada Ltd. has requested that the federal government match the $30 million provided by Ontario to reopen a Ford engine plant in Windsor, ON.

In addition, the Automotive Parts Manufacturers Association of Canada (APMA) has asked the federal and Ontario governments to provide $400 million in emergency funding to help support the financially-battered sector. So far, the current Conservative government has turned a deaf ear to the sector.

The lack of urgency on the part of the federal government to support the auto sector, historically a critical driver of the Canadian economy, is shocking. With plant closings and layoffs seemingly coming on a daily basis, it’s obvious that the Canadian automotive sector is undergoing a fundamental change. It’s equally obvious that the automotive industry in this country needs help from Ottawa in dealing with the transformation.

Make no mistake; this isn’t about financial hand-outs or subsidies. Instead, it’s about the federal government creating an environment that supports the sector’s ability to be competitive, innovate, and attract long term investment. It’s long past time for the federal government to be part of the solution because the automotive sector has more than enough problems to deal with already.

Gross Machinery opens BC office

Brampton, ON-based Gross Machinery Group recently opened an office in Richmond, BC to serve the growing demand for machine tools in the province.

Gross Machinery Group, Brampton, ON has established a new office in Richmond, BC to serve the burgeoning BC manufacturing sector.

“Our expansion into BC is the key to having a national presence within Canada. It is our overall goal to introduce British Columbia to the wide spectrum of product offerings available exclusively at Gross,” Michael Gross, president of Gross Machinery, said in making the announcement. “To stay ahead in today’s market, you need more than good products and unparalleled service.”

At the same time, the company appointed Ed Braithwaite as district sales manager for the new office which initially will have a staff of three people including Braithwaite. Establishing the new office in Richmond is in response to growing demand in the BC market, according to a company spokesperson.

“We found that throughout the years we were having more and more demand in BC for our machine tools. We are trying to establish Gross Machinery Group as a national presence within Canada,” the spokesperson says, adding that Gross already has offices in Calgary, AB and Edmonton, AB.

The Richmond office, which will feature a showroom, will offer a wide variety of Gross Machinery Group products, services and turn-key solutions.

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