A Bleak Forecast For Canada's Auto Industry

TTAC Staff
by TTAC Staff

The Globe and Mail‘s Greg Keenan reported some bleak news for Canada’s auto industry today, with Canada’s auto manufacturing output set to decline by as much as 25 percent by 2020.

While Canada built over 2.4 million vehicles in 2012, that number is expected to drop to 1.8 million by 2020, according to a report cited by Joe McCabe, president of AutomotiveCompass LLC, who spoke at a conference for the Automotive Parts Manufacturers Association of Canada.

Since 2010, auto makers have invested $42 billion in manufacturing, with Canada receiving a mere 5 percent of that. The biggest declines are expected to come at GM and Chrysler, with both companies moving key product out of their Canadian facilities. Production of the Chevrolet Camaro will move from GM’s Oshawa, Ontario plant to Michigan, while Chrysler’s axing of one of its minivan nameplates could see the end of a full three-shift schedule at its Windsor, Ontario plant.

GM is set to close its Consolidated Line at Oshawa next year, leaving only the Flex Line running. But no new product has been confirmed beyond 2016, when GM’s “vitality commitment” to the Canadian government runs out, and it is no longer obligated to keep a certain percentage of its vehicle production in Canada. No GM vehicle is exclusive to the Flex Line either, with the Buick Regal, Chevrolet Impala, Cadillac XTS, Chevrolet Equinox and GMC Terrain all built at other facilities as well as Oshawa, while GM’s Dan Akerson has stated that Canada is the most expensive location in the world to build a car.

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  • Doctor olds Doctor olds on Oct 05, 2013

    GM will live up to their agreement, and will make the best business decision thereafter as is appropriate and proper for any enterprise. GM is not weak, but getting increasingly stronger. They are a big company and can build vehicles many places. Are Canada and Australia pricing themselves out of manufacturing? It wasn't long ago that Canada was a low cost production location in NA. As a matter of fact, most employers either never had, or have discontinued defined benefit pension plans in favor of defined contribution plans. It is a megatrend.

  • Mikey Mikey on Oct 05, 2013

    @ doctor olds.... yes it is a megatrend. Love it, or hate it is reality. My guess as far as Oshawa operations go. We may see consolidated, win a little extension. The Flex with its contiguous stamping plant...should survive for quite sometime.

  • Danio3834 Danio3834 on Oct 06, 2013

    Instead of creating a favorable business environment, our Governments will infuse cash bribes to try and keep them a little longer. Then, once that money runs out, it's more bribes or they're gone. In the case of Ford St. Thomas assy, the bribes kept them there for a few years, then even more bribes weren't enough. The CAW won't concede to be competitive with the UAW, they seem (as always) to convince themselves the companies are always bluffing. Caterpillar gave them a chance to keep their jobs at reduced pay, and they elected to have no jobs at no pay. It'll turn out the same at the auto plants.

  • MoDo MoDo on Oct 06, 2013

    The 65 cent Loonie ain't coming back as long as the oil sands are pumping. Our dollar has switched to a petro dollar, and it even fluctuates with the price of oil. Last time Alberta had a boom (and the bust that followed) all those workers moved from Alberta to the southern Ontario factories. Except this time I doubt the factories are coming back - and nobody that's current raking in 6 figures in Alberta would move to ONtario to make $12.00 per hour to stand on a production line. Adios manufacturing, it was nice knowing ya. Even I did the Ontario factory thing in my late teens and early 20's. I worked for a tier 1 auto supplier right out of high school 1999~ (went bankrupt around 2004) as well as a tier 2 and 3 auto supplier 2001-2002 (went bankrupt somewhere around 2005). I don't think either one of those paid over $14/hour - and if I were to do it all over again I'd probably just get at job at the mall selling shoes. I'd be clean, get to gawk at hot chicks all day, make the same money and work a normal shift. That first factory would switch hours in the summer to 5:30am to 1:30pm so everyone could leave before the factory hit 100 degrees in the afternoon sun. After that I switched to the afternoon shift - which basically meant having absolutely NO life during the week.

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