Detroit has reembraced Canada

detroit-has-reembraced-canada_60b90bfcae255
detroit-has-reembraced-canada_60b90bfcae255

EDITOR’S NOTE: The following editorial appeared in the Nov. 23 issue of Automobile News | tomobile.org, a sibling publication of Automobile News | tomobile.org Canada.

The significance of the Detroit Three’s new contracts with the union Unifor is hard to overstate.

When talks began in the summer, the future was in doubt for Ford Motor Co.’s plant in Oakville, Ontario. Feelings were still raw over General Motors’ 2019 closure of its historic Oshawa plant. And Fiat Chrysler’s minivan plant in Windsor was losing shifts as demand for minivans shrank.

Canadian auto manufacturing was in decline. Just preserving the status quo might have been seen as a win for Unifor and its leader, Jerry Dias. But instead, in one of the big surprises of this pandemic-stricken year, the three automakers committed up to $4.9 billion in investments.

The Oakville factory will be converted to build electric vehicles. FCA has pledged as much as $1.58 billion, most of it for green-vehicle production in Windsor. And in the biggest of the stories, GM agreed to reopen Oshawa Assembly to build full-size pickups.

Dias certainly deserves his share of credit. So does the government of Canada. The government of Ontario, too, as it has shifted from a previous mindset that equated auto industry incentive support with corporate welfare.

The $1.8 billion Oakville deal included $590 million in government funding. The FCA and GM accords are contingent on expected government support.

How did it all happen? For a longer-term perspective, I talked with Ray Tanguay. The 71-year-old from Mattice, a French-speaking town in northern Ontario, joined Toyota in 1991 and later became president and chairman of its Canadian manufacturing operations. He’s still actively promoting Canadian interests, advocating for skilled-trades training as a member of a college board and he is a director of the Open Road dealership group in Vancouver.

His stature at Toyota went far beyond the company’s assembly plants in Cambridge and Woodstock. In the twilight of his career, in 2010, he was tapped by President Akio Toyoda to help craft a global vision plan for the automaker.

After retiring from Toyota in 2015, Tanguay took on a new role for the better part of three years: Canada’s auto czar. As Automobile News | tomobile.org said at the time, his mission was to use his contacts to lure investment to what we called Canada’s “struggling auto sector.”

The work was done under the umbrella of the Canadian Automotive Partnership Council, which was created in 2002. A key for the group then and now, Tanguay says, is putting automakers, parts suppliers, labour interests and the academic world at the same table on issues such as regulatory reform, and attracting talent and investment.

The early traction got blown off course by the Great Recession and the bankruptcies of Chrysler and General Motors, Tanguay explains. Much of the industry investment afterward had a bias toward low cost, and that favored Mexico.

But the new U.S.-Mexico-Canada Agreement on trade is leveling the playing field on labour costs, Tanguay says. The Canadian auto industry is also poised to benefit from the nation’s other deals — such as the Canada-European Union Comprehensive Economic and Trade Agreement. It might help a Canadian EV plant be designated as a global supply source, in much the same way that BMW’s plant in South Carolina builds crossovers for the world.

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