major automakers are spending at least $12.2 billion on
facility expansions in North America through 2015, according to
an AMM analysis of announcements over the past 16
months. About 70 percent of the total is being spent in the
United States and 27 percent in Mexicoand just 3 percent
What does that mean
for the future of Canadas auto industry? Ken Lewenza,
president of the Canadian Auto Workers (CAW) union, believes
neither suppliers nor workers should worry that Canadas
auto industry is in danger of fading.
Lewenza said the union
evaluates every investment decision that automakers announce.
The most recent include a $250-million investment by General
Motors Co. in its CAMI Automotive plant in Ingersoll, Ontario,
and $100 million by Toyota Canada Inc. in its Cambridge,
"Im not totally
alarmed about investments outside Canada. Investments operate
in cycles, and GM (for example) made significant investments in
its Oshawa, Ontario, plantin the neighborhood of $1
billionprior to the 2009 restructuring," he said.
GMs St. Catharines engine plant also received
nearly $250 million in 2010.
realized higher capacity utilization and productivity rates at
their Canadian plants, offsetting perceived disadvantages such
as high wages and a high Canadian dollar. "The reality is, in
the last negotiations we had to make wage concessions on
new-hire rates ... due to pressure from global companies that
can move capital from country to country without dealing with
the consequences. That is problematic for us (the union) unless
governments step inCanada, the United States or
Chinaand make companies invest in their domestic
markets," Lewenza said.
"We painfully made
sacrifices," but as a result "GM said we positioned ourselves
as well as possible for future investment, he said. "It is
frustrating to think that if wages were the (primary)
determination for getting investment, then all the investments
will eventually end up in Mexico. There is always a country
that will do it cheaper."
doesnt believe wages are the sole determinant, noting
that a mere 7 percent of the total cost of assembling a vehicle
is for labor. "Its the quality and productivity of the
workforce. J.D. Power & Associates rated the Oshawa and
CAMI plants as highly productive," he said. "Our health care,
infrastructure, stability, quality and productivityput
all that in the pie, and Canada is a good place to invest."
The CAW expects
further investment in Ford Motor Co.s Oakville, Ontario,
plant and, potentially, at the Windsor minivan assembly
"I keep emphasizing
the advantage of Canadian business operations. Our dollar is
coming down, which is important with so many exports," Lewenza