GM Effectively Names Canada Its Global Homeroom for Advanced Vehicle Development

General Motors Canada announced today, along with Prime Minister Justin Trudeau and Ontario Premier Kathleen Wynne, that it will bolster engineering and software development efforts in Canada with a 700-job strong hiring initiative.

The work in question will focus on autonomous driving software and controls, connected vehicle tech, active safety and vehicle dynamics technology.

In addition, Mark Reuss, GM’s Executive Vice President of Global Product Development, Purchasing and Supply Chain, announced a new Automotive Software Development Center in Markham, Ontario, as the Oshawa Tech Center is already bursting at the seams.

Today’s announcement shouldn’t be viewed as a General Motors initiative with the support of the Canadian and Ontario governments, but a push by the Liberals to make Canada “the most inviting jurisdiction on the planet for transformative innovation,” starting with General Motors, said Trudeau.

“In choosing Canada to be the home base for its Global Centre for Advanced Vehicle Software development, GM is affirming the skills, the ingenuity and the immense potential of Canada’s workers.”

Canada is a hotbed of tech research and development. Silicon Valley continues to pluck talented people from Ontario, the University of Waterloo is one of the top STEM universities in North America, and Canada has already played host to the incubation of numerous technologies found on the Chevy Bolt.

However, with Oshawa Assembly hanging in limbo and Unifor threatening to strike over a lack of production mandates, the announcement arrives at an interesting time.

Engineers cost good money no matter where you go. Conversely, an army of factory workers do not — and it’s easy to see the manufacturers understand the arithmetic quite well. Eight plants have opened in Mexico over the last eight years while Canada has lost two.

But as Trudeau said in his closing remarks, “today’s announcement is not an endpoint.”

Despite a lack of production mandates beyond 2017, GM Canada won’t abandon manufacturing in Ontario. Based on the language used, it sounds like automotive manufacturing in Ontario will stick around, albeit with a far different face to it.

“It’s absolutely encouraging, this is GM saying that they have a long-term commitment to Canada,” said Jerry Dias, National President of Unifor.

“Obviously our expectation would be that the technology developed is going to be used in their [GM] Canadian manufacturing, which will include and must include Oshawa. I view this [announcement] as an incredible positive.”

On the surface, it seems GM will look to shift its Ontario manufacturing focus towards high dollar, high margin products like connected, autonomous, alternative propulsion cars.

The higher margins and sale prices help mask the higher manufacturing costs, while satisfying the Liberals’ image goals for the Ontario workforce.

“There’s no question that I’m expecting they [GM] have large hopes for their Canadian plants,” Dias continued when asked exactly that.

“I mean, the facilities here in Oshawa do everything right — it has an incredible paint shop, capacity, we win all the quality awards, we’re the most productive plant they have in their chain — so the stars are aligned for us to get a product.”

Manufacturing, which has long been declining in Canada, remains one of Ontario’s key sectors, employing 750,000 workers. It is a sector neither the Federal or Provincial governments are interested in abandoning. However, with pressure from lower cost regions quickly siphoning off capacity, Canada’s auto sector must adapt.

With today’s announcement, GM is effectively choosing Canada to serve as its global homeroom for advanced vehicle development — and that’s a very good thing.

[Image: © 2016 Michael Accardi/GMInsideNews]