by ADAM BRUNS

Editor's note: All dollar figures in this article have been converted to US$. At press time in early October, CA$1 = US$0.794.

ntario's economic outlook is nearly synonymous with its automotive sector outlook, thanks to the industry's providing 45 percent of the province's total exports in 2003, as well as 331,000 jobs. So communities and companies in the province had to take heart in mid-September 2004 when the Conference Board released a report calling for an increase in Canadian automotive company profits from US$1.67 billion in 2003 to US$4.2 billion in 2005.
      That went slightly counter to some statements made during the same week by Dieter Zetsche, division president and CEO for the Chrysler division of DaimlerChrysler (DCX). Even as expansion possibilities loom for Chrysler and for Ford Motor Co., Zetsche was pointing out that Mexico's absenteeism was a tenth of what it is in the rest of North America while its quality was comparable. At the same time, DCX is initiating talks with the Canadian Auto Workers about adding a third shift — and 900 workers — at its Brampton, Ont., plant.
      Both DCX and Ford have made more than subtle hints that financial assistance with training, technology and beyond is needed for their companies to write the investment check. Thus the oft-bandied subject of government incentives for the industry is again coming to the fore in Canada. While federal officials continue to hold the line against such practices, at least in the explicit sense, provincial officials in Ontario have come out of the gate with the Automotive Investment Strategy Program, which can pay up to US$79 million to investing companies.
      "It's a CA$500-million [US$397-million] strategy, and we're looking for an investment of CA$300 million [US$238 million] and up to qualify, with creation or retention of 300 jobs," says Joseph Cordiano, Ontario's Minister of Economic Development and Trade. The conditions for such investment by the province include provisions in the project for R&D, skills development, public infrastructure, energy efficiency and technology enhancement. Cordiano points to another newly announced program — a US$50-million commercialization initiative — as another tool for the automotive sector to make use of in its drive for innovation through new procedures and new materials.
      "What's behind the strategy is to secure the greatest number of assembly jobs we can," he says of the automotive program. But he points out the even greater spinoff potential in both direct supplier companies as well as in steel and in communications. In a province that serves as the home of Magna International — perhaps the quietest global automotive giant there is — that potential is especially significant. Cordiano has characterized the spinoff value to be higher than US$3.9 billion.
      "This is a positive and welcome change from previous governments who took our sector for granted, when other jurisdictions were stepping up to attract investment and jobs that we want for Ontario," said Buzz Hargrove, national president of the Canadian Auto Workers, when the new automotive strategy was announced in spring 2004.
     

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