Update trade deal, but don’t kill it, GM Canada president says
AUTOMOTIVE
General Motors Canada president Steve Carlisle says NAFTA is crucial for the North American auto industry to remain competitive globally, and that negotiators next week should look to modernize the agreement to factor in new technology now found in cars.
“Our desire is that we continue to use our whole North American footprint because that’s what make us competitive against the rest of the world,” Carlisle said in an interview with the Financial Post following the official opening of the company’s new Canadian Technical Centre in Markham, Ont.
“NAFTA certainly can be modified and updated ... with things like tracing lists and cross-border mechanisms, all of those will have a direct impact on productivity, employ- ment and keeping NAFTA competitive with other trading blocks like Asia and Europe and other parts of the world.”
The future of Canada’s auto industry stands to be affected by the outcome of NAFTA negotiations that appear to have grown increasingly fraught over the last several months.
On Friday, Bloomberg News reported that the U. S. is running out of patience with Canadian and Mexican resistance to major proposals made by the Americans. Citing two sources familiar with the negotiations, Bloomberg said the Trump administration is serious about its threat to withdraw from NAFTA if there isn’t a breakthrough at the next round of negotiations in Montreal, scheduled to begin next week.
While the uncertainty has prompted some automakers and parts manufacturers to turn toward the U. S. when it comes to new investments — last week Fiat Chrysler Automobiles announced it will relocate some truck production from Mexico to Michigan — GM Canada has stuck with expansion plans for its Markham facility that were announced in June 2016. The campus will be home to around 700 employees and focus on developing in- car infotainment systems and software related to autonomous cars. So far, the company has hired around 300 staff.
“We want to continue to improve on what we can do and show that we’re a great place to invest, whether it’s in manufacturing or engineering,” Carlisle said.
GM has also recently ramped-up its focus on electric and autonomous vehicles. In December, the U. S. automaker unveiled plans to bring a self- driving ride- sharing fleet to major U. S. cities in 2019. Two months earlier, it announced it would launch 20 all-electric vehicles by 2023. The focus on software development and autonomous vehicle technology shows just how much vehicles have changed since the NAFTA deal was struck in 1994.
“Cars are a lot different now…. We didn’t have a lot of software in cars in 1994,” Carlisle said, adding that NAFTA should be modernized to reflect the many changes seen in new cars.
“Now we have a hundred million lines of code and more in a car, so it’s more and more about that kind of content... There are a number of areas that can be improved because time has passed.”
But while he urged a modernization of the trade agreement, Carlisle brushed off concerns related to NAFTA uncertainty, saying that “at the moment, it’s not a big issue for us.” However, he said that questions surrounding the future of the agreement have impacted the way other companies invest.
The sixth round of NAFTA negotiations are set to begin in Montreal on Tuesday.