NAFTA NERVES
OTTAWA TO INVEST IN EXPANSION AT AUTOPARTS MAKER LINAMAR, VULNERABLE TO TRADE WOES.
A major, government-backed investment in Ontario by Linamar Corp. is a “vote of confidence” in Canada’s position in the ongoing North American Free Trade Agreement negotiations, according to the president of the Automotive Parts Manufacturers Association.
“They could have waited to make these announcements and decisions, so I think it is a clear indication of what this sector thinks is going to happen with NAFTA and with the Canada-U. S.-Mexico partnership on a go- forward basis,” said the APMA’s Flavio Volpe, in a phone interview from the North American International Auto Show in Detroit on Monday.
“That the second biggest auto supplier is doubling down on Canada, I think it’s a vote of confidence in what the company thinks is going to happen with NAFTA and a vote of confidence of the value of the auto business in Canada.”
On Monday it was announced that Guelph, Ont.based Linamar will receive $ 99 million in funding to support the expansion of advanced manufacturing technology through the opening of a new innovation research and development centre in the province.
The federal government is providing a $ 49 million grant towards what it says is a $ 750 million total investment. The grant is the first to come out of the Strategic Innovation Fund, a $ 1.26 billion program that will provide repayable and nonrepayable contributions to Canadian companies in the hopes of spurring innovation.
According to the federal government, the new funding will help create 1,500 new jobs in Canada while “maintaining” about 8,000 more by “supporting advanced manufacturing processes.” At the same time, the Ontario government said it will provide Linamar with a conditional grant of up to $50 million through its Jobs and Prosperity Fund, as part of a project with overall costs of up to $500 million.
Speaking at the company’s Frank Hasenfratz Centre of Excellence in Manufacturing on Monday, chief executive officer Linda Hasenfratz said the expansion will all ow Linamar to be more competitive and innovative, while providing more highskilled, high-paying jobs.
“Manufacturing companies have to constantly strive to improve competitiveness on a daily basis in order to continue to grow globally,” Hasenfratz said.
“We plan to continue to invest in this evolving factory of the future in many different ways with a focus on areas such as vision systems, collaborative advanced robotics, incorporating sensors into our products, and collecting that data to help us improve product design.”
The announcement comes as some automakers look to expand operations in the U.S. in light of Pres id went Donald Trump’s repeated threats to terminate NAFTA. Last week, Fiat Chrysler Automobiles announced it will relocate Ram Heavy Duty truck production from Mexico to Michigan in 2020, adding 2,500 U.S. jobs.
Linamar is one of many Canadian companies that stands to be affected by NAFTA negotiations, particularly if there are substan-
I THINK IT’S A VOTE OF CONFIDENCE ... OF THE VALUE OF THE AUTO BUSINESS IN CANADA.
tial changes to automotive rules of origin, which stipulate how much North American- made content must be in a vehicle. According to data analysis compiled by Bloomberg, Linamar, which has manufacturing facilities in North Carolina, Kentucky, Illinois and Arizona, remains vulnerable to a 50 per cent U. S.- specific rule of origin, something the Americans have demanded. Bloomberg said just 27 per cent of Linamar’s North American fixed assets are concentrated in the U.S.
Speaking to Bloomberg ahead of the Detroit auto show, Canada’s innovation minister Navdeep Bains said that in order to maintain momentum in the automotive sector, “we need to continue to support NAFTA.”
“The investments that we make in the automotive sector are also good for the U. S. as well,” he said. “It speaks to our integrated supply chains.”