Shuttered Canadian Plants May Help Big Three Ease Projected Capacity Crunch

Derek Kreindler
by Derek Kreindler

A study commissioned by Canada’s federal government suggests that Canada could be in a position to benefit from strong auto sales from the Big Three OEMs, and a lack of capacity could lead to more manufacturing jobs for Canada, including the revival of mothballed factories.

The Globe and Mail article quotes a study, done by CAR (Center for Automotive Research) an industry think-tank in Ann Arbor, Michigan, as stating that capacity shortages will be a major issue by 2018. 2.6 milion units of capacity were eliminated during the 2008-2011 era, and with auto sales projected to rise for the Big Three through 2018, it’s likely that they’ll be scrambling for places to churb out vehicles.

The shortage will cause the Big Three to scramble for capacity, and make it difficult for the OEMs to coerce Canadian governments into subsidizing their operations with threats of closing plants and moving production to cheaper locales . The study claims that GM may be at risk of losing market share as early as 2015, if sales rise and production capacity remains constrained, leaving GM and Chrysler unable to meet demand and sell trucks to consumers.

Ford had previously threatened to close their Oakville plant unless they received a $1 billion investment from governments, but the Ontario plant, which builds crossovers like the Ford Edge, would be a poor candidate for closure as production constraints and demand for the Edge and other crossovers continues to rise. But The Globe notes that some kind of government assistance and concessions from the unions would be required to help keep the plant running.

For its part, the CAW would also be left in a stronger position during labor talks, since automakers would be averse to jeopardizing their already shaky situation with a work stoppage brought on by a strike. The Globe cited Chrysler’s Bramalea, Ontario plant as one target where a strike would be disastrous. The Chrysler 300, Dodge Charger and Dodge Challenger have seen booming sales in 2012, and a strike that affected production of these cars would be disastrous for Chrysler.

As for the shuttered plants? The article suggests that GM’s Oshawa truck plant is a candidate for having production re-started, or converted to build unibody cars. No mention was made of the Ford St. Thomas plant, spiritual home of the Panther platform. Keep dreaming, B&B.

Derek Kreindler
Derek Kreindler

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  • Jimmyy Jimmyy on May 09, 2012

    From wall street, we see 14M car sales as weak. Remember, before 2007, 14M would have been considered a disaster. Now, we have the near communist Democratic party brainwashing the USA with 14M sales as very strong. This is nothing more than an attempt to get Obama relected by pointing to a 14M sales figure as justifying massive taxpayer money being dumped into Detroit. This is all about the election.

  • Enzl Enzl on May 09, 2012

    So, it's Obama's fault that we haven't returned to a cheap money, 'have a pulse, have a loan' or HELOC ATM 17 million units? I'm not going to defend the president on many issues, but the auto bailout and his handling of that industry in general is one of the few truly solid performances of his presidency. I simply don't get those that would like to run to another credit crisis before the last has been fixed...that's the only ( unsustainable) way to get to 17m in the short term in this market.

  • MaintenanceCosts Other sources seem to think that the "electric Highlander" will be built on TNGA and that the other 3-row will be on an all-new EV-specific platform. In that case, why bother building the first one at all?
  • THX1136 Two thoughts as I read through the article. 1) I really like the fins on this compared to the others. For me this is a jet while the others were propeller driven craft in appearance.2) The mention of the wider whitewalls brought to mind a vague memory. After the wider version fell out of favor I seem to remember that one could buy add-on wide whitewalls only that fit on top of the tire so the older look could be maintained. I remember they would look relatively okay until the add-on would start to ripple and bow out indicating their exact nature. Thanks for the write up, Corey. Looking forward to what's next.
  • Analoggrotto It's bad enough we have to read your endless Hyundai Kia Genesis shilling, we don't want to hear actually it too. We spend good money on speakers, headphones and amplifiers!
  • Redapple2 Worthy of a book
  • Pig_Iron This message is for Matthew Guy. I just want to say thank you for the photo article titled Tailgate Party: Ford Talks Truck Innovations. It was really interesting. I did not see on the home page and almost would have missed it. I think it should be posted like Corey's Cadillac series. 🙂
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