CANADA: Motor parts industry calls for government help to attract investment - report

By just-auto.com editorial team | 11 December 2003

The Canadian motor industry will face plant closures and lost business over the next few years unless the government and industry work together to attract investment, a spokesman for country's automotive parts industry warned on Wednesday, according to a news agency report.

"If we don't make changes, it will be in trouble. We have about a year or two to act, but if we don't act, we will be in trouble," Automotive Parts Manufacturers' Association president Gerald Fedchun told Reuters.

Fedchun reportedly said car and parts manufacturers, as well as unions, governments and academia, must come together to improve the outlook of an automotive parts industry that has seen sales slip from a high of $27 billion in 2000 to $26 billion in 2002.

Reuters said that a 21-page policy paper unveiled by the association on Wednesday called for investment in research programmes in the automotive sector as well as upgraded infrastructure such as improved border crossings into the United States, where most of the parts flow.

Fedchun reportedly warned that without the added investment, the country will see further job losses and plants closings as companies are lured away by rich incentives offered in regions such as the southern United States or Mexico.

"The industry has generated an awful lot of revenue and prosperity in Ontario, and Canada in general, but there are structural changes going on in the industry that we cannot cope with by ourselves," Fedchun told Reuters.

By working together with the unions, with governments and with academia we can change the structures that are needed to keep the industry prosperous," he reportedly added.

According to Reuters, Ontario, the centre of the country's motor sector, has lost out to locations further south that offered cash incentives or tax breaks to attract investments.

Of 17 new North American vehicle plants built since 1990, just one was in Canada - six were in Mexico, the rest were in the United States, with seven of those in the South, Reuters noted.

The report said Canada faces the prospect of losing some large assembly plants, although it is also vying for new business including new plants being considered by Mitsubishi Motors and Toyota.

Announced closures in the past year included DaimlerChrysler's Pillette Road plant in Windsor, Ontario, and Ford's truck plant in Oakville, Ontario, Reuters added.