Promise of more investment in auto industry but no specifics

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Industry Minister James Moore reminded CEOs of Ford, Honda and Toyota that Canada is a good place to build cars. This is the same message that was preached at Linamar earlier this week when two levels of government gave the Guelph auto parts maker $100 million. The money, half loan and half grant, goes with Linamar’s own commitment of $400 million, to be spent on research and development and expansion of its transmission-building capacity.

Moore was speaking at the North American International Auto Show in Detroit. Moore said that Canada was the most attractive country in the world for investment by auto makers because of its $2.3 billion Automotive Investment Fund (AIF) and because of Canada’s trade agreements with many countries, including the European Union, which will give Canadian businesses access to over half the world’s markets.

Moore said that he was confident more investment would be coming to Canada, in addition to the Linamar investment and several others already announced or expected, including $2 billion from Chrysler for its Windsor minivan assembly plant. He did not announce any specific new investment.

While the promise of more investment is good news, applauded by the auto workers union, Unifor still wants to see the federal government articulate a “comprehensive auto investment strategy,” rather than what it calls the current ad hoc approach. The Canadian auto industry has lost more than 50,000 jobs since its peak years, with jobs migrating south to Mexico and the southern states.

The industry in Canada is in good shape in terms of sales if not production. In the past year, car and truck sales set a new record, breaking the previous record set the year before. Among the big three Detroit automakers, Canadian sales reached more than 1.85 million in 2014, the majority of them trucks. Ford and Chrysler both had their best sales in years, followed by GM.

As many industry observers have said, the global auto industry is undergoing a number of important changes as cars become more and more sophisticated electronically and more fuel efficient. More research and development than ever is required, and more of it needs to happen in Canada.

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Honda’s FCV Concept car at the Detroit auto show this week. The hydrogen-fueled car will be introduced in 2016.

 

Trends that will drive auto development in coming years include the search for a fully autonomous, or driverless car. Google has one, and Nissan has one, but neither is ready yet for mass consumption. Nissan has declared that it will have a driverless car on the road by 2020. Some of the intelligent technology needed for driverless cars is already turning up, including self-parking and onboard radar that can warn a driver of a collision before it happens.

Another key trend to watch is the continuing development of greater connectivity, with a whole range of Internet and telecommunications services built into the dashboard. the kind of intelligent technology already appearing in cars to warn drivers of potential collisions.

The quest for greater fuel efficiency and new propulsion systems continues as well. Though oil prices may fall, government regulations on emissions do not. Honda revealed its new next-generation fuel-cell car in Detroit yesterday. Honda said the FCV Concept car, fueled by hydrogen, will have a driving range of 300 miles when it is introduced in 2016.

Government money to Ontario auto parts maker will ensure jobs

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Canada’s second-largest auto parts maker, Linamar, has agreed to maintain a minimum of 6,870 jobs at its Ontario facilities in exchange for an investment of just over $101 million by the provincial and federal governments. Combined with the Guelph company’s own commitment, the total investment by Linamar will be over $500 million. Linamar s expanding its operations to focus on producing new fuel-efficient auto transmission and power train parts. It is expected to add about 1,200 new jobs over the next decade.

The federal Transport Minister, Lisa Raitt said the federal loan of $50.7 million will help ensure that Linamar’s $506.8 million investment stays in Canada, “a great place to build cars.” The federal funding is provided through the Automotive Innovation Fund which has to date “leveraged” up to $2.3 billion for R&D and innovation in Canada. Besides that support, Canada offers auto makers “a stable economy, a low corporate income tax rate, a highly skilled and productive workforce, well-developed infrastructure and access to markets,” Raitt said.

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For her part, Linamar CEO Linda Hasenfratz said it was “wonderful” to see governments “stepping up and being competitive,” given that there are so many jurisdictions that are willing to offer “all kinds of incentives” to companies like hers. Linamar will use the government money to fund the purchase of new equipment as well as research and development of new products. Hasenfratz called the government money “absolutely key” to enabling that investment.

Ontario’s contribution of $50.25 million is from the province’s new Jobs and Prosperity Fund, according to the premier, Kathleen Wynne. She said that such business grants are contingent on the company meeting investment and job targets.

The auto parts industry in Canada was worth about $24 billion last year. Linamar has more than 18,000 employees around the world, several thousand of them in Guelph. It reported a profit of $248.8 million on revenue of $3.2 billion in 2014. Profits and revenues were up sharply from the previous year.

In other auto news today, Chrysler president Sergio Marchionne said that the company’s new crossover vehicle will be assembled at the Windsor, Ontario plant if it goes ahead. Chrysler will invest $2 billion to develop the minivan and retool the plant to build it.

NASA and Nissan to build autonomous vehicles together

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Many common devices, especially medical ones, that we take for granted today were once thought highly innovative, even futuristic. The US space agency NASA has been responsible for quite a few of these, including some types of artificial limbs, infrared ear thermometers, the so-called space blanket and the use of LEDs in medical therapies. Quite naturally, NASA also has a history of innovating in the area of transportation: anti-icing systems for aircraft, the use of safety grooves in highway surfaces, and the development of super-strong radial tires, to name a few.

It is not out of character for the space agency, therefore, to team up with a car maker—Nissan in this case—to collaborate on developing “autonomous vehicles.” NASA uses them for exploring other worlds; Nissan wants to make them available to earthly drivers. Each can learn from the other as they tackle the “similar challenges” that face them.

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The first tests on autonomous vehicles will use a modified Nissan Leaf.

NASA and the North American arm of Nissan announced that they would work together on a five-year R&D project that will bring together NASA researchers from the Ames Research Centre in California and Nissan researchers from its Silicon Valley facility. The vehicles they develop could be used for planetary exploration and terrestrial road use. The first zero-emission test vehicle, a modified Nissan Leaf, is expected to be testing by the end of this year.

As reported in Wired magazine, the director of Nissan’s Silicon Valley research facility spent ten years as a “senior scientist” at NASA. The two research facilities are very close to each other, and, Nissan says, “the timing is right” because they are ready to start testing their autonomous vehicles on city streets. Nissan has said it will have driverless cars on the market by 2020. The automaker can learn a lot from NASA’s space rover vehicles, which operate remotely, but not very autonomously, in harsh conditions millions of miles from Earth. But it can also teach NASA what it has learned about navigating in terrain that is filled with variables and unpredictability, a city street. One environment is remote and hostile, but relatively predictable; the other is chaotic and dangerous.

The director of NASA’s Ames Research Centre told Wired that they needed to add to the autonomy of vehicles like the Mars rovers

Chrysler expanding Windsor assembly plant for “future vehicle”

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The president of Unifor local 444 in Windsor called it a great Christmas gift, though it wasn’t announced until Boxing Day, and there were few details. What is known is that Chrysler Canada is expanding its assembly plant in Windsor, getting it ready for “a future vehicle.” This was posted on a company Facebook page with no other details.

That hasn’t stopped some workers at the plant from speculating that the future vehicle will be an SUV. One said it could be the next Durango.

The national president of Unifor, Jerry Dias, was quoted on CBC news saying that Chrysler is spending $2 billion retooling the plant, which some see as evidence that the money is being spent to ready the plant for SUV production. Others have put the cost of the expansion at $1–$1.5 billion, but Chrysler itself has not said.

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2015 Dodge Durango. Some have speculated that it could be the “future vehicle” to be produced at the Windsor Assembly Plant, but Chrysler has not said.

The Windsor plant, which occupies 4.4 million square feet of floor space and employs 4,600 workers on three shifts, currently produces the Dodge Grand Caravan, Chrysler Town & Country, Ram Cargo Van and Lancia Grand Voyager. The company announced last May that it would stop producing the Dodge Grand Caravan at the end of this year.

According to Chrysler, now known as FCA US, the plant will be getting a new skillet line, a type of assembly line with adjustable height as vehicles move along it, allowing greater ergonomic flexibility for workers as well as better sight lines.

The Windsor Star reported that despite the significant size of the investment in the plant, the union does not feel secure about its long-term future. Jerry Dias said that since talks about government support broke down between Chrysler and the government last March, the union has not had the “long-term comfort” that such government support would have provided. With government support, Dias said, “we were going to get much more (from Chrysler)” but as it is now, the only certainty for Windsor is the next generation minivan. Dias said that he will push in 2015 for a national automotive strategy in Canada to help protect the “half a million jobs” in Ontario that are tied to the auto industry.

Additional work on the plant is planned to begin in February.

Nissan sales surpass 100,000 for first time in Canada

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Nissan Canada said today that for the first time it has sold more than 100,000 vehicles in a single calendar year. Last year the car maker sold 82,604 units, a record at the time. The car that hit the milestone was a 2015 Nissan Pathfinder Platintum, sold in Thornhill, Ontario.

The president of Nissan Canada, Christian Meunier, credits a mix of hard work by the company’s dealers and good planning for the brand’s growing success. The planning has to do with “bringing the right cars to Canadians.”

Nissan Brand Surpasses Sales of 100,000 Vehicles in Canada

Mike Colleran, Vice President Sales of Nissan Canada and Mark Falkenberg, Dealer Principal Willowdale Nissan hand over the keys for a 2015 Nissan Pathfinder Platinum to the Solitario family. With this sale, the company reached a new milestone of 100,000 vehicles sold in one calendar year in Canada.

This year, Nissan launched two new models, the Rogue and the Micra, both of which have been “very successful” in Canada. The Micra, unusually for Nissan, was introduced in Canada but not offered in the United States. The Micra is an entry-level car, competing with Nissan’s Versa Note, but appealing to different customers, said Meunier. Since the Micra went on sale at dealerships in April, with a MSRP of $9,998, sales have exceeded 7,000 units, he said. The Versa Note has sold 12,000 units to date this calendar year. Nissan’s share of the entry-level market is 22 per cent as of the end of November. Next year the company will launch the Micra Cup, “Canada’s most affordable racing series featuring Canada’s most affordable car.”

Nissan also dominates in the all-electric segment with the LEAF. It has sold 1,020 units for 2014, an increase of more than 130 per cent over last year.

In the compact crossover segment, the Nissan Rogue is a top seller, with 26,729 units sold at the end of November. That’s an increase of 78 per cent over last year. The new 2015 Murano, now in dealerships, is expected to continue to do well.

Coming soon is the redesigned Nissan Titan, its full-size pickup truck. It will be shown for the first time at the Detroit Auto Show in January, according to The Car Guide. The Titan has not sold well to date, and Nissan is not top of mind with the public when it comes to trucks, but the redesign is meant to give it a more rugged, all-American look that will convince buyers to take a look. The Titan is powered by a Cummins 1500 diesel engine, the only truck on the market with that engine.

Windsor auto industry growing, needs skilled workers: report

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A new report from Workforce WindsorEssex gives a much more optimistic assessment of the auto industry in Windsor than is often seen in the media. The study says that the auto industry is a “viable career” and that demand for workers is on the increase. The report, titled Driving the Automotive Industry into the Future, comes after a year-long research effort that looked at the industry and the impact emerging technologies are having on it. The overall conclusion is that stakeholders in the auto sector, including employers, industry associations and educators, are optimistic about growth prospects, though concerned about perceptions of the industry and the lack of skilled workers.

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The report issues a plea for industry stakeholders—young people in schools, educators and industry employers—to work together to train skilled workers and connect them with the companies that need them. As it is now, available positions have become harder to fill, it says. Job openings that are available immediately include engineers, technicians/technologists, general labour, semi-skilled and skilled trades.

The auto industry in Windsor had been shrinking very significantly. In the decade from 2000 to 2010, the Windsor area auto manufacturing workforce shrank from 49,400 to 29,600, a downsizing of about 40 per cent. But in 2011, the report says, mold, tool, die and machining employers supplying the auto industry started to “show signs of growth.” From 2012 to 2014, local employers have been having trouble finding the skilled workers they need. It can take more than sixty days for some companies to find the skilled workers they need, and much longer than that in some cases.

The introduction of many more new product lines per year by the car makers, as well as new fuel efficiency standards, are driving the need for innovation, which requires a skilled and innovative workforce. Citing a report by auto industry analyst Dennis DesRosiers, the WindsorEssex report says that the next five to eight years could be the industry’s best ever.

The manufacturing industry in Windsor-Essex is in transition. The occurrence of ‘lean thinking’, which is to identify and implement efficiencies and a push to innovate will continue to impact the landscape of automotive manufacturers. In addition, organizations are looking to other sectors, like Aerospace to inspire their innovation and to benchmark new ways to explore better technology and processes. The manufacturing industry has many opportunities and you could be part of an exciting future where today’s dreams and ideas are being developed into the products of the future.

Driving the Automotive Industry into the Future

 

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Source: Driving the Automotive Industry into the Future

One of the main challenges facing the industry in Windsor is an aging workforce and a “skills mismatch.” Whereas auto production workers in the past needed just a basic education and a willingness to work long hours at a repetitive job (though for very good pay), the “current landscape” is much different. Modern manufacturing is a “global enterprise, competing in innovation, creativity and smart thinking.”

Perceptions of poor working conditions and demanding, repetitive work “plague” the industry, making it hard to recruit workers, even in an area where unemployment remains around 9 per cent. The report urges students to “get involved” and take advantage of the fact that they are in “the perfect place” to explore an exciting career in the auto industry.

Occupations in the auto sector where aging is likely to have an impact include senior managers, electrical and electronic engineering technologists and technicians, assembly line supervisors and metalworking and forging machine operators. Almost 20 per cent of workers in these areas are 55 years or older.

 

New GO buses will be assembled in GTA

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GO Transit will be receiving 253 new low-floor, high-capacity double-deck buses from Scottish bus maker Alexander Dennis Limited (ADL). Under the terms of the agreement between Metrolinx and ADL, a bus chassis assembly plant will be built in the GTA. This is expected to create up to thirty full-time jobs. Construction on the plant will begin in 2015. The first buses, which will be fully accessible, will be delivered the following year. Metrolinx has an option to purchase up to 150 additional buses over the five-year contract.

The lower height of the new buses is intended to improve service on GO Transit’s bus routes. Older double-decker buses currently in service cannot access all of the existing GO Transit terminals. As the new buses come on line, that problem of restricted accessibility will be eliminated. The lower floor and a longer, more gradual entrance ramp will also improve boarding and exiting for passengers. The buses will also have a wider area to accommodate wheel chairs, Metrolinx says. As well, there will be 120V charging outlets available for motorized wheelchairs.

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The Enviro500 double-deck bus is the flagship of Alexander Dennis Limited, the Scotland-based bus maker that will supply 253 new buses to GO Transit over the next five years. The Enviro500 was introduced two years ago with lower height, greater fuel efficiency and greater passenger capacity.

ADL is a leading bus manufacturer in the UK, with facilities in the UK, in Asia, and in North America. There are already 125 ADL buses in service in the Toronto area GO Transit service.

Metrolinx President and CEO Bruce McCuaig said, “These buses represent the future of our bus fleet and set a new standard for the service we provide. Their lower floors will allow customers with limited mobility to board with ease, and their lower height will allow us to bring double-decker service to all of our routes.”

Ontario’s minister of transportation, Steven Del Luca, noted that the new bus agreement would bring jobs to Ontario as well as improving service for bus passengers.

ADL buses are in use in several cities throughout North America.

Honda expansion a win for Ontario’s auto sector

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With a conditional grant of up to $85.7 million from the government of Ontario, Honda Canada is set to invest $857 million in its Alliston plant to make it the lead production facility worldwide for the next generation Honda Civic. The Alliston plant will be the first to launch the new Civic, and it will develop the processes and tooling that will be followed by other Honda plants around the world. It is the first time that a Honda plant outside Japan has been designated a global lead plant, the president of Honda Canada said.

The government’s 10 per cent portion of the investment, to be given over five years, will be used for “leading edge technologies” for vehicle assembly and engine manufacturing. It will also fund research and development in universities and colleges. It does not mean any additional jobs, however. There are currently about 4,000 workers in Honda’s three Alliston plants. As well, the approximately 1,500 suppliers who provide parts and services to the auto sector will benefit from the continued production. That business is reportedly worth about $2.1 billion annually.

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Premier Kathleen Wynne announcing the investment of $857 million to be made at Honda Canada’s Alliston plant.

Premier Kathleen Wynne called the Honda decision a “vote of confidence” in Ontario’s “highly skilled” workers and their capacity for innovation and leadership, and a vote of confidence in the auto sector in the province, which she called “one of the strongest and most diverse in the world.” Both the economic development minister, Brad Duguid, and Honda president Jerry Chenkin acknowledged that winning major investments like this is a struggle. The recent loss of a Ford engine plant to Mexico illustrates how difficult it can be. In that case, according to reports, government investment was not forthcoming to Ford because the company  did not provide sufficient job guarantees to satisfy the government.

Honda’s Ontario plants now produce 390,000 Civics and CR-Vs annually, of which approximately 100,000 are sold in Canada.

Toyota celebrating 50 years in Canada with Special Edition Corolla S

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From “humble beginnings” in a distributorship agreement fifty years to its current status as one of Canada’s most important auto makers, Toyota has come a long way. Now celebrating fifty years in Canada, the company has sold more than 4.6 million vehicles in this country. It has been making cars here since 1988, and now builds “Canadian favourites” Toyota Corolla and RAV4, as well as the Lexus RX350 and RX450 at its Cambridge and Woodstock plants in Ontario.

According to Toyota, the Corolla is its most popular car in Canada. No surprise, then, that Toyota chose it to help commemorate the fiftieth anniversary. For a limited time, the 2015 Toyota Corolla S will be available in two additional trim packages, being sold as the 50th Anniversary Special Edition. They will be available only in Canada, and built at Toyota’s north assembly plant in Cambridge.

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The 2015 Toyota Corolla S fiftieth anniversary special edition in Absolute Red finish. The limited-time offer is available to commemorate the auto maker’s fifty years operating in Canada.

The special anniversary edition being offered has 17-inch aluminum alloy wheels with black gloss finish, “unique” red interior stitching, wheel locks, and rear disc brakes. An alternate version has power sunroof and automatic climate control. These add-ons, minus the red stitching, are also offered to regular purchasers of the Corolla S as upgrades. Both are offered in an “exclusive” Absolute Red paint finish, and buyers can choose six-speed manual or CVTi-S automatic transmission.

Toyota recently marked another milestone in Canada, selling 100,000 of its Prius and Lexus hybrids. The Prius was first introduced in 2000.

The company employs a total of “about” 11,000, including its financial services. With dealerships included, the number of Toyota employees in Canada rises to 24,000.

Autos and parts drag down manufacturing sales in August

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After many consecutive months of improvement, manufacturing sales in Canada fell steeply in August, to $52.1 billion. The 3.3 per cent decline in factory sales was the first decline this year, but the biggest in five years. About half of the decrease was the result of lower auto and auto parts sales, Statistics Canada reports. However, sixteen of the twenty-one industries tracked reported declines.

The transportation equipment industry was hit hard, with sales falling 12.8 per cent to $8.9 billion. This was largely because of lower motor vehicle sales; these fell 12 per cent, after a particularly strong July, in which sales were up 13.7 per cent. Sales of motor vehicle parts dropped 10.8 per cent, to $2 billion. One analyst at TD Securities advised that the weak manufacturing performance in August should be seen as a “one-off” given the prominent role played by the auto sector.

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The main decline in August manufacturing sales was in transpiration equipment, including cars and car parts, according to Statistics Canada.

Other transportation equipment sales were down even more, dropping 40.6 per cent to $274 million. This followed a huge gain of 43.6 per cent in July. As Statistics Canada points out, sales in this industry are “volatile.”

Sales of petroleum and coal products also fell 3.4 per cent to $7.3 billion.

In Ontario, the August decline was 4.6 per cent, reversing the 4.8 per cent gain made the month before. Again, the main cause of the decline in Ontario was in lower auto sales. Aerospace product sales were also down 28.5 per cent.

Unfilled orders declined minimally, dropping 0.1 per cent, to $89.2 billion. Unfilled orders have remained stable over the past six months. New orders, however, were down 3.8 per cent, with half of that decline also attributable to the transportation equipment industry.