A note sent from Dennis Desrosiers that I thought you might find of interest.
I am sure you read what he said in the Star today "the Linamar announcement Friday was not good news for the Windsor automotive region..."This further reinforces the move away from the traditional north-south axis from Windsor to Oshawa to the new automotive corridor starting in Sarnia and ending in Fort Erie...There will come a day when Windsor becomes a rump, unfortunately."
Honda To Build 6th North American Auto Plant For Y50bn
And the trend continues. I see on the wire last night that Honda is about to announce their 6'th assembly plant for North America. Watching CNN last night they had it going to Alabama which I don't know is right or wrong but if it was targeted to Canada we would probably have known it by now so I suspect Canada will not get this one. In some respects it doesn't matter since most of the jobs are on the parts side of the equation and there is huge upside opportunity for Canada to pick up more jobs on the components side than the assembly side. It would have been nice to get the assembly plant but all is not lost. Just watch the headlines over the next couple of years and there will be many more parts jobs (3 to 1) than assembly jobs and Canada will get its fair share. Well don't watch the "headlines" since most media don't understand that most of the action is on the parts side of the equation and relegate these growth stories to the inside pages. Add them all up though and there are more parts jobs created in Canada by the new domestics than assembly jobs. Assembly employment has remained relatively stable or down a little at about 45,000 in Canada, parts employment has grown from about 70,000 jobs to about 100,000 jobs in the same timeframe.
This will bring Honda's capacity in North America to about 1.8 million units and with all the other 'new domestics', total 'new domestic' capacity to almost 7 million light vehicles (see table). The trend continues, all the growth is on the 'new domestic' side of the equation and all the fall back is with GM, Ford and DCX (also see table attached). The algorithm is quite simple. The 'new domestics' have added three million units of capacity into North America since the year 2000 and GM, Ford and DCX have lost about 3 million units of capacity. All the new capacity is non-union, all the lost capacity is unionized. Only about 55 percent of the vehicles purchased last year were unionized (CAW/UAW) and by the end of the decade this will drop to well below 50 percent and possibly below 40 percent. Remember GM and Ford announced closing of 2 million units of unionized capacity in October and January.
Any manufacturing entity that touches GM, Ford and DCX has had a negative adjustment to make and any entity that plays to the 'new domestic' side of the industry is growing and in most case growing rapidly. This has meant serious restructuring issues for Windsor, Oshawa and any other jurisdiction that touches the declining side of the equation and boom times for dozens of other locations and especially those successful with the 'new domestics' like Cambridge, Alliston, Ingersol and Woodstock. Almost all the 100 plus suppliers that have followed the assemblers into Canada have also located into central Ontario providing significant opportunity for many smaller communities. And Windsor keeps its head in the sand denying that their union mentality is a problem!
I am sure you read what he said in the Star today "the Linamar announcement Friday was not good news for the Windsor automotive region..."This further reinforces the move away from the traditional north-south axis from Windsor to Oshawa to the new automotive corridor starting in Sarnia and ending in Fort Erie...There will come a day when Windsor becomes a rump, unfortunately."
Honda To Build 6th North American Auto Plant For Y50bn
And the trend continues. I see on the wire last night that Honda is about to announce their 6'th assembly plant for North America. Watching CNN last night they had it going to Alabama which I don't know is right or wrong but if it was targeted to Canada we would probably have known it by now so I suspect Canada will not get this one. In some respects it doesn't matter since most of the jobs are on the parts side of the equation and there is huge upside opportunity for Canada to pick up more jobs on the components side than the assembly side. It would have been nice to get the assembly plant but all is not lost. Just watch the headlines over the next couple of years and there will be many more parts jobs (3 to 1) than assembly jobs and Canada will get its fair share. Well don't watch the "headlines" since most media don't understand that most of the action is on the parts side of the equation and relegate these growth stories to the inside pages. Add them all up though and there are more parts jobs created in Canada by the new domestics than assembly jobs. Assembly employment has remained relatively stable or down a little at about 45,000 in Canada, parts employment has grown from about 70,000 jobs to about 100,000 jobs in the same timeframe.
This will bring Honda's capacity in North America to about 1.8 million units and with all the other 'new domestics', total 'new domestic' capacity to almost 7 million light vehicles (see table). The trend continues, all the growth is on the 'new domestic' side of the equation and all the fall back is with GM, Ford and DCX (also see table attached). The algorithm is quite simple. The 'new domestics' have added three million units of capacity into North America since the year 2000 and GM, Ford and DCX have lost about 3 million units of capacity. All the new capacity is non-union, all the lost capacity is unionized. Only about 55 percent of the vehicles purchased last year were unionized (CAW/UAW) and by the end of the decade this will drop to well below 50 percent and possibly below 40 percent. Remember GM and Ford announced closing of 2 million units of unionized capacity in October and January.
Any manufacturing entity that touches GM, Ford and DCX has had a negative adjustment to make and any entity that plays to the 'new domestic' side of the industry is growing and in most case growing rapidly. This has meant serious restructuring issues for Windsor, Oshawa and any other jurisdiction that touches the declining side of the equation and boom times for dozens of other locations and especially those successful with the 'new domestics' like Cambridge, Alliston, Ingersol and Woodstock. Almost all the 100 plus suppliers that have followed the assemblers into Canada have also located into central Ontario providing significant opportunity for many smaller communities. And Windsor keeps its head in the sand denying that their union mentality is a problem!
1 comment:
A reader writes
I wanted to comment on your posting from Dennis DesRosiers...I see that your chum Chris VanderDoelen put out a similar blurb.
I enjoy reading about what Dennis has to say. He does take liberties and puts in some inaccurate statements (or shots) but for the most part he is spot on from a big picture point of view. That Linamar announcement was very, very big in that there was a reason Ms. Hasenfrantz invested in her hometown (funny too how these auto entrepreneurs have blonde daughters that grow up to take over the family firm....where have I seen that before...all she needs to do is learn to speak French and she can run for office)
That reason being that in the surrounding area, not only is there an infrastructure in place to go east-west to the U.S. border but that when you take in that London, K-W, Cambridge and Guelph corridor the unions are not as militant and they all have diverse economies and first rate universities.....and I cannot emphasize the education and mixed economy aspect enough....notice how Toyota is putting a lot of money in that area?
So why is that a big deal......its something I observed last week. I had an early morning meeting to go to last Tuesday and rather than cross the border for the heck of it I decided to stay in Ann Arbor. Now I go to Ann Arbor in the fall, a lot for football games and I know a bit about the town but after the games we seldom venture right into the city...
So a week ago on a Monday evening I drove there from work, got a hotel room and decided to go thru the city and into the downtown. Now all we have heard or read about Ed, is that SE Michigan and Southern Ontario (ie: Windsor) are doing poorly and things are depressed...........so I trundled up Main St...got to the top of the hill where the downtown starts.............and my jaw dropped. The streets were jammed..........cafes, bars, stores....lineups to the theatre....and it was a Monday...............I turned over to a side street.............a martini and jazz bar...a construction crane, more lineups ...one to a restaurant...........it was 7pm....and again, it was a Monday night! I had lived in Toronto for 3 years and I lived right on Yonge Street south of Eglinton for one of those 3 years...........so I know if something is vibrant or not...........and you know what...what I saw there I never even saw in Toronto. The streets were jam packed. "Gee...I said to myself.....this is SE Michigan.....35 minutes away from metro Detroit...the pimple in the American economy". How come I never read this in the paper.....
Yes, yes ..I know that Ann Arbor has a great university, an educated populace, a prime medical center.........and if they could get their university football team to throw more on first downs things would be even better there. But was this not an example of a diverse, mixed but balanced local economy that was thriving in the midst of doom and gloom. How enlightening. So getting back to Ms. Hasenfrantz and Linamar and Guelph etc..................she sits right in a town of similar size and structure....near to many highways and also to a larger populated region............. and oh by the way, Toyota (remember them) is building a large tech center outside of Ann Arbor.............as has Hyundai. Hmmmmmm......interesting.
So if our Mayor ever needs inspiration or an idea or even a plain kick in the ass...........he can trundle over to a depressed area in SE Michigan and see that good things can happen.
now about that brewed de-caf.....go easy
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