Click image to enlarge

by Jim Barnes

While recent resurging North American auto sales have led some to celebrate, it may be more of a reprieve for the Canadian automotive industry than anything else. 

That growth is coming off very low numbers. According to data provided by the Automotive Parts Manufacturers’ Association, North American unit production of light vehicles dropped from 15,102,752 in 2007 to 8,626,384 in 2009.  

“The bottom was pretty low, and there was nowhere else to go [but up],” notes Mark Stoddart, chief technology officer and executive vice president, marketing, Linamar Corp., Guelph, ON.

 “We are looking at close to 14 million units this year,” he says, adding that in 2013, growth to 15 or 16 million units might be realistic.

“From a vehicle production point of view, the industry has recovered about 40 per cent of its lost volume,” says Dennis DesRosiers. However, he notes, “our parts sector has not recovered any volume.”

Two factors drove the glory days of the auto industry in Canada. 

The first was strong trade with the US, underpinned by Auto Pact and the North American Free Trade Agreement. Since then, low-cost offshore competition has made major inroads in the market and many automotive OEMs have turned to Mexico as a source of production.

The second factor was a currency exchange rate that worked strongly in our favour. At 70 cents to the dollar, manufacturing in Canada made for a compelling argument. However, international demand for commodities in the past decade has strengthened the Canadian dollar to parity with the US dollar. That is unlikely to change significantly.

The industry was already struggling when the recession hit. Some of the OEMs teetered on the edge of insolvency during the credit crisis, rescued by a $4-billion emergency loan package in Canada in 2008. Not only was business down, but some real risk entered the picture—would the customers still be in business a year from now?

Wages and benefits were another piece. When the recession hit, the Canadian Auto Workers union tried to protect the wages and benefits in its collective agreements. Its US counterpart, the United Auto Workers, fought to keep jobs and made concessions. While comparing overall labour costs and productivity is a complicated exercise, the automotive OEMs insist that labour costs in Canada are substantially higher.

The bottom line is the Canadian industry has a long fight ahead of it, even with the welcome return to something approaching normal in automotive sales. SMT

Jim Barnes is a Toronto-based journalist with 30 years of experience in writing about manufacturing technology.

To read more on this topic click here.



Punch, form, bend and tap on one machine

The Strippit PX-Series from LVD Strippit offers the flexibility to punch, form, bend and tap on a single machine.
Efficiently and cost-effectively complete multiple processes, including the processing of complex, three-dimensional parts.

On the right axis

by Kip Hanson

The Problem: Outdated pipe beveling method cost time, money

The Solution: An automated pipe processing machine

Alberta tube and pipe processor turns away from old school ways of thinking

Welding robotics

Understanding the benefits and building the case for the investment

By Brian Doyle, sales manager, Miller Welding Automation

The thought of converting to an automated welding system can be intimidating, even to the point that it causes the decision makers to disregard the process altogether.

Welding Metaltech Report

Lincoln Electric
Travel carriage  delivers 60 lb/hr  deposition rates
Lincoln Electric’s self-propelled modular Cruiser Tractor brings increased mobility and operator-friendly features to longitudinal submerged arc welding applications common in bridge and barge decking, large tank fabrication and shipbuilding. 

The multisensor advantage

by Tim Wilson

Tactile coordinate measuring machines (CMMs) and vision based non-contact systems each have their advantages.  But combining the two in a single system can provide more measurement data more quickly to improve process control feedback, as well as saving time and cost, compared to measuring parts on several different systems.

Hard metals metaltech report

Solid carbide thread mills
Emuge Corp. has expanded its line of solid carbide thread mills in its Threads-All program.

The perfect cut

by Mary Scianna

The Problem: Trying to meet multiple cut orders

The Solution: New NC saw with ability to store up 100 jobs

Mazak launches hybrid machine for additive

Mazak Corp., Florence, KY, has entered the additive manufacturing sector with the launch of its new hybrid multi-tasking machine, Integrex i-400M, that combines machining with additive manufacturing in one platform.

Revealing hidden costs

What is the true cost of financing machinery and equipment?

by Daniel Wittlin and Adrian Isaacs

When looking to get a bank loan to finance machinery many companies only consider the rate of interest quoted by their bank.

Cost savings on abrasives: White Paper

Walter Surface Technologies has publsihed a white paper that illustrates how manufacturers can achieve cost savings with abrasives in metal finishing applications.

Hypertherm announces software subscription plan

Hanover, NH-based Hypertherm, a manufacturer of industrial cutting systems and software, has set subscription pricing for its Design2Fab CAD/CAM sheet metal layout software. This software can be used with manual or automated cutting applications.

Expansion strategies

Market diversification as a competitive tool for manufacturing growth

by Tim Wilson 

Canada is an energy giant.

Watejet aids in doubling remote copper mine productivity

A five axis waterjet machine from Jet Edge will help a South African mine to double productivity.

Stay In Touch

twitter facebook linkedIn