Bill Murnighan, National Representative of the Canadian Auto Workers Union, says "Canada's an incredibly good place" for auto and auto-related businesses, "both in terms of productivity in plants and labor productivity, [which] is as high, or higher, than the U.S." Murnighan says that standard industry reports, such as the Harbor Report, which gives plant-by-plant comparisons, show that "Canada currently has a 7 percent advantage over the U.S., and a 65 percent advantage over Mexico. "And once an industry sets down roots" -- it's been in Canada for over six decades -- "it just keeps growing [because] this is where the business is."

The CAW is very "optimistic at the moment," says Murnighan, about the industry. "Last year [was] record-breaking for automotive production. We produced in Canada more than 3 million vehicles, which is a record high. The lower Canadian dollar certainly helps, as do lower costs for benefits and health-care." In fact, he adds, health care provisions in Canada are one of the "most competitive factors supporting the auto industry and other industries as well. In the U.S., there's no public plans of any real measure, so they're forced to pass on the cost directly to the employers."

Southwestern Ontario is home to a large part of the auto industry. The London Census Metropolitan Area is home to auto and transport parts manufacturers that include Ford Canada, Sterling Trucks and GM's diesel division. Toyota is in Cambridge, Honda is in Alliston, and Cami Automotive is in Ingersoll. And as the giants expand operations, the spin-off industry is exploding. Recent auto-related expansions include Johnson Controls and Autoliv in Windsor, the latter of which is building a 120,000-sq.-ft. (11,100-sq.-m.) plant to manufacture airbags and side-curtains.

The biggest recent coup for the City of Guelph is the new Denso Manufacturing plant, which opened in October 1999. A Japanese auto parts manufacturer with facilities in 26 countries, the Guelph plant is the company's first in Canada. (The company has had a sales office in the GTA since 1972.) "We're the fourth-largest automotive parts manufacturer in the world," says Michelle Dermody, manager of corporate administration, Denso Canada, adding that Guelph specializes in heat-ventilating and air-conditioning systems for vehicles, known as HVAC Units.

"The primary reason [for setting up in Guelph] was just to support our customers' expanding business," says Dermody. "Honda and Toyota are going through major expansions themselves, and our facilities in the U.S. that produce these products were reaching their limit in terms of capacity. For them to keep producing this product, they would have needed to expand [themselves]. Instead," she continues, "the decision was made to bring the product to Canada, and serve our customers locally."

Dermody says that since the HVAC units are large and bulky, being in proximity to its clients, and just off Highway 401, greatly reduces transportation costs. "Being a local presence [also means] we're able to be at the plant if there are any issues, and our response time to our customers is much quicker."

The Guelph plant, which is 110,000 sq. ft. (10,200 sq. m.) and cost C$33 million, doubled its staff through the year, and now has just over 200 employees. The city's economic development office reports that land and office space availability is a key advantage in attracting new business, a point Dermody seconds. The Japanese parent appears impressed with Guelph thus far, says Dermody. Employees have been "hard working and diligent in the start-up of the plant," which has already "exceeded our production expectations."