A third border crossing, competitive labour costs and a lower loonie are key to ensuring that Canada’s automotive sector grows, Don Walker, CEO of auto parts giant Magna International, said Wednesday.
“I hope we don’t lose assembly jobs here,” said Walker, a keynote speaker at the two-day Automotive Parts Manufacturers Association Conference at Caesars Windsor.
“We need to be competitive in all aspects. Unclogging the border is good for both the U.S. and Canada.
“There’s a lot of will on both sides to fix it.”
“It’s an unnecessary cost because if somebody is waiting to get across, you’re sitting on money and time. For the health of Windsor and Detroit it has to get fixed.”
The global auto industry is on an upswing, but a strong loonie could leave Canada out in the cold when it comes to attracting investment, he warned.
“We need to do whatever we can to keep it at as low a level as practical,” said Walker. “If we want to have people employed in manufacturing you have to make sure you try and keep it low. Many of our competitors in the automotive industry do exactly that to their currencies.”
To illustrate the point, Walker noted that Magna, a $28.7-billion global company, launched 18 new facilities last year and will build an additional 30 by 2014, with the bulk of those operations in low-cost countries.
He also urged the Canadian Auto Workers union, which will start Detroit Three bargaining this summer, to ensure wage rates are competitive with their American counterparts.
“They’re in a difficult situation,” he said. “But, the fact is the UAW gave concessions.”
Magna owns two plants in Windsor and Essex County – Integram Seating and Windsor Modules – and employs a total of 1,100 workers.
Walker said Magna has no plans to build additional Canadian plants, but “we want to support the employees we’ve got here. If there’s opportunity to win jobs we will continue to do that.”
He said the industry’s comeback has led to the creation of an additional 4,500 jobs at Magna operations in Canada.
The conference also heard from Ray Tanguay, senior managing officer of Toyota Motor Corp., who said that competitiveness constitutes more than just lowering labour costs. Canadian auto companies that seek ways of improving efficiency, innovation, quality and empowering employees will thrive in an increasingly global industry, he said. “Enabling your employees to help solve problems can save thousands of dollars,” said Tanguay. “The best way to motivate your workforce is to make them feel like they’ve made a difference.”
Tanguay said Toyota’s recovery from three difficult years marked by natural disasters and quality issues is in full swing and expects to produce 8.7 million vehicles globally this year – a 20 per cent increase over 2011.
In Canada, Toyota is “maximizing its footprint” with the introduction of the electric RAV-4 at its Woodstock plant. He said Toyota’s Ontario operations will crank out about 500,000 vehicles this year.
“Volumes of 500,000 any place in the world is major league manufacturing,” said Tanguay.
“I have a dream that there will be more.”