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A  SITE  SELECTION  SPECIAL  FEATURE  FROM  NOVEMBER 2001
Ontario


Automotive: No Longer on Auto-pilot

    Late summer is the traditional time for changeovers in assembly plants, but the shift in production going on in North America has to do with a lot more than next year's model. The latest numbers, according to the Automotive News Data Center as of the end of July, showed that total year-to-date Canadian car and truck production had slowed from 1,758,461 vehicles as of July 29, 2000, to 1,504,877 this year. That's a drop-off of more than 14 percent. Parts makers like Visteon, which is closing its Markham facility and laying off around 1,200 workers, are paying the price.

It Sounds Like a Fairytale, But Guelph Is for Real

      Significant pressure on both the Windsor and Toronto ends of the industrial real estate markets have brought more development to the gaps in between them in recent years. In Guelph, construction permits of all types have grown from a mere 1,262 as recently as 1995 to 2,301 in 1999, a year that saw 135 industrial concerns receive permits. As of late 2000, over half of the more than 350 industries in the city were in the metal fabricating, machinery, electronics or transportation fields.
      Primary among them is Linamar Corp., a manufacturer of precision-machined components, assemblies and castings that, like Magna, is moving forward with confidence instead of trepidation.
      "We have been very successful in gaining market share, while continuing to control costs through operational improvements," said Linamar President Linda Hasenfratz in announcing second quarter figures that were slightly down, but paired with news of $145 million in new orders for the first six months of the year. "We will be successful at generating cash for the year, a significant achievement for us even after our $22 million investment in Skyjack," she said, alluding to the diversification move of buying an aerial-lift manufacturer.
      An efficient blend of such strategic moves with the friendly business climate promulgated by city and provincial agencies is keeping both old and new auto companies rolling through Guelph's corner of the Technology Triangle.

      Meanwhile, Mexican vehicle production has grown 8.8 percent, from 987,811 cars and trucks through July of last year to 1,074,534 through the end of July.
      Yet when a recent online poll by Canadian Machinery & Metalworking asked, "Will a free trade agreement between the Americas help or hurt your company?" 57 percent of respondents said "help" and 43 percent said "hurt."
      Perhaps one answer to this apperent contradiction is that the Americas are now a lot more than the U.S., and the auto business is a lot more than assembled cars and trucks. While Canada's Export Development Corp. recently forecast a two-year dip in auto exports, the export of machinery and equipment is rising in importance. Plenty of that machinery may be auto-related, and plenty may be headed south. The EDC calls for a 5 percent rise in overall exports to Mexico, and a 9 percent hike in exports to South America.
     

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