Putting the North in North America

Following on its nearly complete investment in its non-union Cambridge, Ontario, facility, Toyota pledged in September to add 700 workers to that plant's payroll, a 25-percent boost that brings the payroll to 4,000. They are not the only OEMs to re-affirm their presence in the Canadian auto sector in 2002.
        Between 1991 and 2001, capital investment by the auto sector in Ontario alone averaged US$1.8 billion per year. That pace may have slowed along with everything else in the economy, but the ties that bind are growing stronger.
        A major plank in the Big Three's separate negotiations with the Canadian Auto Workers' (CAW) union was job creation and new plant investment. General Motors and partner Suzuki Motor Corp. have pledged $322 million toward their CAMI plant in Woodstock, Ont.The automaker will also add 330 jobs and a new line at the St. Catharines, Ont., components plant, and 120 jobs and a new paint shop at its Oshawa, Ont., truck plant.
        Ford's travails have included the eventual closing of its pickup plant in Oakville, Ont., in 2004, but their negotiations yielded a saving of 900 of that facility's 1,400 jobs, part of a promised $402-million investment in the company's minivan plant in the same city.
        DaimlerChrysler has had its share of ups and downs in Canada. In June 2002, its Chrysler side announced that the auto trim plant in Ajax, Ont., would close by 2003, eliminating 648 jobs. Following intense negotiations with the 47,000-member CAW, DaimlerChrysler promised 660 new jobs at its Windsor, Ont., assembly plant, in part to offset the loss of jobs at its phasing-out Pilette, Ont., plant. All told, the company hopes to invest $385 million in a new 1,000-employee Windsor plant by 2005, provided a business case can be made for the project by late 2003. DaimlerChrysler is counting on supplier partner commitments, and as-yet unpromised funds from the Canadian government. Long known for its lack of incentives, the national government, along with its provincial counterparts, has lately been hearing more pleas to get in the game.
        According to Scotiabank's August 2002 Canadian Auto Report, vehicle assembly facilities clustered in the Greater Toronto Area (GTA) are among the most efficient in North America, with a 15-percent advantage over facilities in the U.S. Assembly plants in the GTA have nearly a 40% edge over operations in Mexico and are even 7-percent more productive than facilities built in the U.S. South. The 2002 combined income tax rate of 33.12-percent on manufacturing income was lower than all the combined federal and state tax rates in the U.S. In fact, in its third-quarter financials, leading Canada-based supplier Magna International anticipated a recovery of $12 million because of forthcoming corporate tax reductions in Canada.
        Other suppliers are reflecting that positive climate with construction, with two new project coming to London, Ont. Pennsylvania-based Magee Reiter Automotive Systems will employ around 125 people at a 109,000-sq.-ft. (10,126-sq.-m.) plant that will make floor systems for GM and Ford. Tim Smith, vice president of manufacturing for Magee Reiter called London the center of the Ontario automotive belt.
        "The culture of London is very close to the culture in Bloomsburg, Pennsylvania," he says. "This was also very important to our decision."
        Starlim-Starner, based in Magna magnate Frank Stronach's home country of Austria, is opening a $17-million, 67,815-sq.-ft. (6,300-sq.-m.) plant to make electronic seals.
        "From here we will sell into America and South America as well," says Andreas Steiner, chief executive of Starlim North America Corp. "In six years, we will be as big as our operation in Austria and I think within 10 years, we will outgrow that."
        So the North American continent continues to welcome the cars and the carmakers. Some companies are retrenching, others are redeveloping and still others are re-thinking. But the infrastructure for vehicular transport grows stronger in ways both big and small, as corporations continue to look to the market as an engine for growth. The most recent candidate for new production in the market is Mitsubishi Motors Corp., which wants to almost double its sales in North America by 2007, and may be looking for a new place to make vehicles since its Illinois plant is pushed to capacity. Anybody out there interested?