More Bad News for Windsor From DesRosiers

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!