UNIFOR TOUTS $ 900M BOOST
Auto industry’s long run viability still in doubt
• Unifor has managed to secure nearly $ 900 million of investment for Canada’s auto assembly plants in the space of just a few weeks, a feat that union president Jerry Dias trumpeted as “completely reversing the trend” of a shrinking Canadian industry.
However, analysts say it’s not quite that simple, and while Unifor has secured meaningful investments in the Canadian plants of General Motors Co. and Fiat Chrysler Automobiles NV, more commitments will be needed to assure the auto industry’s long- term future in Canada.
Minutes before a midnight strike deadline on Monday, Unifor announced that it had reached a tentative agreement with FCA Canada Inc. that includes $ 325 million to upgrade the aging paint shop at its vehicle assembly plant in Brampton, Ont.
This came on top of an earlier agreement with General Motors of Canada Ltd. that secured $554 million in upgrades for its moribund assembly plant in Oshawa, Ont., as well as its engine plant in St. Catharines, Ont., which will gain some work from Mexico.
“Things are starting to change in a significant way in this country, because what we have seen is a mass exodus of investment from Canada, and we are now seeing a major investment occurring in Canada,” Dias said at a late night press conference announcing the FCA deal.
“We are in the process of completely reversing the trend. The trend is now one of major investments and commitment to Canada, which is something we haven’t been able to say for quite a while.”
Canada’s auto production peaked in 1999 and has been declining ever since.
In 2008, Mexico s urpassed Canada to become the second- largest North American producer of light vehicles. Today, Canada produces approximately 13 per cent of North Americanmade vehicles, compared to about 20 per cent in Mexico, according to the Center for Automotive Research.
Needless to say, securing nearly $ 1 billion in investment — and that’s before Unifor sits down for talks with Ford Motor Co. of Canada — is a positive for Canada’s shrinking auto industry.
But whether it actually reverses the trend is debatable, said Tony Faria, co- director of the University of Windsor’s Office of Automotive and Vehicle Research.
“I woul d agree we stemmed the tide of losing assembly and losing jobs to some degree, but in terms of whether we have turned anything around, I would not necessarily say that at this point,” Faria said in an interview.
“Stemming that downward spiral at a minimum is good news, but I don’t think what we’re seeing in terms of these two agreements is going to do anything to encourage future automotive investment into Canada.”
FCA’s commitment to spend $ 325 million on its Brampton paint shop — the oldest in the company’s North American operations — is not enough to install state- of- the- art technology, which can run as high as $800 million, Faria said.
“To me, this looks like something that is not necessarily an expenditure that guarantees the future of Brampton but just pushes it back a small number of years,” he said.
Brampton’s days are limited unless it can secure a new product, said Joe McCabe, president of consulting firm AutoForecast Solutions LLC.
“We still believe that facility’s going to need an additional product there to fill its capacity … especially to justify the investment in the paint shop,” McCabe said. “I’m optimistic that they’re going to make some sort of announcement of another vehicle in there, just not today or tomorrow, but maybe over the next few years.”
Meanwhile, GM’s plan for Oshawa, which will reportedly involve doing final assembly work on pickup trucks shipped from Indiana, will only extend the life of that plant until 2020, according to McCabe’s forecasts.
“It is quite an accomplishment to have new production taking place, although what they’re doing in Oshawa to me seems like sort of a makeshift arrangement and not something really permanent,” said Faria. “We’ll see what happens.”