Automotive & Advanced Manufacturing

Industry Size and Composition | Labor Force
Business Competitiveness | Innovation

Three major auto manufacturers – General Motors, Ford and DaimlerChrysler – collectively operate six assembly plants in the Greater Toronto Area (GTA). General Motors, Ford, Honda, KIA, Mazda, Suzuki, Nissan, Volkswagen, Toyota, Hyundai, Aston Martin, Jaguar, Land Rover, Subaru, Volvo, BMW, and Mitsubishi chose the GTA for their Canadian headquarters.

More than 700 parts manufacturers help make the GTA one of the most vital and diverse automotive clusters on the continent. In all, GTA automotive companies employ close to 50,000 workers, second only to Detroit, and produce more than 1.1 million cars, trucks and minivans per year.

The GTA is also home to dozens of plants producing diversified automotive parts. Much of this production is exported to the United States, making the automotive industry a key contributor to Canada's export trade.

Industry Size and Composition

The Greater Toronto Area is the second largest automotive cluster in North America:

The GTA is Ontario’s # 1 Automotive Cluster with 58% of Ontario’s total vehicle production, seven major auto assembly plants and more than 700 parts manufacturers.

The GTA is also home to more than half of Ontario’s advanced manufacturing firms.

Ontario is the most important vehicle-producing jurisdiction in North America, producing the highest vehicles than any other region or State. 2.4 million vehicles were manufactured in the Greater Toronto Area in 2006.

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Source: Ward's AutoInfoBank February 9, 2007.

Industry Leaders in Automotive Assembly and Parts Manufacturing

Investments

Substantial investment and growth in the GTA's automotive industries have created one of the most diverse and profitable automotive clusters in North America.

Examples of recent investments:

Taking advantage of the Ontario Automotive Investment Strategy (OAIS), in October 2004, Ford announced the investment of CDN $1 billion to retool its existing Oakville plant. It is Ford’s first flexible manufacturing plant in Canada, which will also include an R&D Centre focused on fuel-cell technology.

Early in March 2005, General Motors was the second automaker to benefit from OAIS. GM’s CDN $2.5-billion project will establish an automotive “Centre of Excellence” at the University of Ontario Institute of Technology, in Oshawa. It is designed to improve links between auto suppliers, universities, researchers and students in automotive engineering, design and innovation. Overall, the investment will create 500 jobs in the southern Ontario communities of Ingersoll, Oshawa and St. Catharines.

Late in November 2005 , Chrysler was the third automaker to benefit from OAIS. Chrysler announced investments in increased manufacturing flexibility and an environmentally advanced paint shop at the company's Windsor facility and skills training at the Brampton plant. Provincial support of $76.8 million for a total investment of $768 million.

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Labor Force

Best in North America for Productivity and Efficiency

Without question, the GTA’s high-volume vehicle assembly plants offer the highest productivity and efficiency in North America. For example, The General Motors’ GTA operations are rated as the most productive in North America, according to the 2007 Harbour Report. Four Ontario plants ranked among the top 10, several plants led their segments in efficiency and almost all Ontario facilities posted above-average performances when compared with other North American plants.  

Well-educated, highly skilled workers

Ontario autoworkers are the reason Ontario facilities are consistent winners of both the J.D Power and Associates Initial Quality Study and the Harbour Report plant productivity survey. Ontario’s 44 colleges and universities produce more than 25,000 graduates per year in math, engineering, and pure and applied sciences. The GTA is second only to Boston, Mass in the number of engineering and science graduates per year.

Ontario universities consistently rank in the top 10 of North American engineering programs. University of Toronto is ranked as Canada’s top engineering program, while McMaster University (Hamilton, Ontario) offers the top manufacturing engineering program in North America.

Annual enrolment in tool & die and machinist apprenticeship programs has tripled since 1993. The Ontario government spends close to & 90 million a year on apprenticeship programs to ensure there are 26,000 new registered apprentices yearly.

Source: Ontario Ministry of Education, The Gourman Report, 1999.

Educational institutions offering programs related to the automotive manufacturing industry

Targeted Skills Programs

More than CDN $16 million has been invested in strategic skills programs for the automotive industry in Ontario since 1998.

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Business Competitiveness

Labor Costs

Ontario offers one of the most competitive labor costs in North America.
Labor costs in the GTA are 32% lower than leading automotive clusters in the U.S.

Operating Costs

Toronto is a highly competitive location for auto parts manufacturing.

Source: KPMG, Competitive Alternatives, 2006
Note: CDN $1.17 = US $0.85, (Cost index: US=100.0). Index based on a 10-year average profit and loss statement that considers: initial investment, financing, location sensitive cost and location insensitive costs

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Innovation

Canada and Ontario Support Innovative Investments

In today’s global economy, innovation is crucial for success. Canada and Ontario are working hard to ensure the continued strength and growth of the Canadian automotive industry. In 2004, the Canadian Automotive Partnership Council (CAPC) released, “A Call for Action: A Canadian Auto Strategy,” while the Ontario Government launched the Ontario Automotive Investment Strategy (OAIS), a new five-year, $500 million program designed to strengthen the industry’s competitiveness. Leveraging after the success of this program, the government of Ontario launched the Advanced Manufacturing Investment Strategy (AMIS) in 2005 and Next Generation of Jobs Fund (NGOJF) in 2007.

Ontario Automotive Investment Strategy (OAIS)

Introduced in April 2004, is designed to support large-scale capital projects that contribute to the long-term competitiveness of the automotive industry. Under the program, automotive assemblers and the Tier One auto parts companies are eligible for government investment in strategic projects of at least CDN$300 million and/or 300 jobs and involving:

• corporate innovation

• advanced skills and training

• public infrastructure

• improved energy efficiencies

• new environmental technologies

The OIAS has already leveraged more than $7 billion in total new automotive investments and anchored thousands of jobs.

Advanced Manufacturing Investment Strategy (AMIS)

To help manufacturers become more innovative and competitive, the Ontario launched the Advanced Manufacturing Investment Strategy (AMIS) in December 2005. It’s a $500 million program to encourage companies to invest in leading-edge technologies and processes.

AMIS will provide 10% of the total eligible costs of a project – up to a maximum of $10 million – in the form of a repayable loan. AMIS loans are interest free and principal free for five years provided the firm meets agreed-upon job and investment targets. After that, the rate is the province’s cost of borrowing plus 1%. Projects must either create/retain 100 or more jobs or invest $25 million over 5 years.

The Next Generation of Jobs Fund (NGOJF)

Modeled after the success of OAIS, the Next Generation of Jobs Fund (NGOJF) was launched in 2007. It is a five-year, $1.15 billion strategy aimed at creating high-value jobs, reducing greenhouse gases and spurring significant new investment in high potential areas of Ontario's economy including clean automotive, environmental technologies, biotech, ICT and digital media. It aims to help innovative companies grow and create well-paying sustainable jobs for today's workforce and for the next generation of Ontario's highly skilled workers.

Ontario’s Next Generation of Jobs Fund will fund companies that make everything from car parts to advanced health products to Academy Award-winning special effects technologies.

To receive funding, companies and industry-led partnerships must meet several of the following requirements:

• secure good jobs for Ontarians

• use or develop innovative technologies, processes and/or materials

• help establish Ontario as a global leader in an emerging market

• build on their existing Ontario-based or create new expertise in research and commercialization

• reduce greenhouse gas emissions in target sectors

• create synergies among researchers, business people and entrepreneurs.

GTMA Helps Taiwanese Firm Choose the GTA

“All of them!”

Those are the GTMA services that Mobiletron Electronics says it needed to set up its operations in the Greater Toronto Area.

“We had no idea how to get our foot in the door and set up a business in Canada,” said Mobiletron Electronics Canada Director Karin Kessler, leader of the company’s new Canadian operation. “The GTMA was able to advise us and link us with the expertise and resources we needed to get going quickly and efficiently.”

Mobiletron Electronics is a division of the More Group, a Taiwanese manufacturer of quality automotive electronics and power tools, more than 1,500 products in all. The company employs 1,800 people in factories in Taiwan and China, sales and distribution offices in the U.K., U.S.A. and Canada, and its head office in Taichung Ta-Ya, Taiwan.

Established in 1982, Mobiletron places heavy emphasis on product design, engineering and manufacturing quality. The company operates its own stamping, mould-making, moulding and machining operations, and maintains certified quality assurance witness testing departments.

Mobiletron’s contact with the GTMA began in April 2006 through the Canadian Trade Office in Taipei. The manufacturer had been working for 5 years with a major Canadian national retailer, and was looking for a location in Canada that would enable it to service the account. The company also has its eye on expanding its sales in the Canadian marketplace. It asked for information about locating in the GTA.

“The GTMA made a great presentation,” Kessler said. “They outlined the business advantages of the southern Ontario area, and convinced our directors to locate here.”

Once the decision was made, the GTMA connected Mobiletron to a panoply of resources. GTMA’s network of partners helped the company to find a location (J.J. Barnicke), navigate immigration issues (Green & Spiegel), handle the legal aspects of setting up a business (Gardiner Roberts) and build an accounting system (BDO Dunwoody). “The GTMA was able to prescreen partners and put us in contact with the appropriate resources,” Kessler said. “We could not have found such excellent professional resources so quickly without the GTMA’s help.”

GTMA Helps Uline Establish Canadian Presence

When it came to choosing a location for its Canadian sales and distribution centre, there was really only one choice for shipping supplies leader Uline: the GTA.

“Our GTA location puts us within a day’s drive of a very large potential market,” said Uline Finance Manager Scott Engel. “We see Canada as an untapped market with large potential for us. We can do our best job of serving that market from a Toronto area location.”

While choosing the GTA was a logical choice, the decision was undertaken with Uline’s typically thorough, painstaking study. “Uline is a very deliberate company,” Engel said. “We believe in doing things right, and we spent three years conducting exhaustive research and development before we made our final decision.”

Since the company, based near Chicago in Waukegan, Illinois, had limited international experience, doing things right began in 2004 by contacting the Greater Toronto Marketing Alliance. “The GTMA set up meetings for us with lawyers, tax experts, real estate people and benefits experts,” Engel said. “It was a whirlwind two-day tour, followed up by ongoing advice and assistance. If we need anything, we call the GTMA and they put us in contact with the resources we need to get the job done.”

 The job the company needed to get done is the establishment of a Canadian presence for a business that has carved out a unique market niche. Uline sells a turn-key range of packing and shipping supplies through printed and online catalogues. Its customers include companies in a wide range of business sectors that appreciate the ability to satisfy all of their shipping supplies from a single source. “If you make something, we can help you ship it,” Engel noted.

Although Uline has never targeted customers north of the border, a marketing spill-over effect has enabled it to build significant sales in Canada.

To bolster these sales, Uline set up a sales office in Mississauga in 2006. This office, which is currently supported by the company’s Chicago warehouse, will soon be moving to a newly constructed 100,000 square foot building in Brampton, which will include a warehouse and call centre.

The warehouse will stock a full range of products, with additional space available for expansion as sales grow. “Our goal is to fill and deliver orders faster than anybody else,” Engel explained. “We need that much space to ensure that we have enough of every product in our catalogue to maintain a high level of service.” The company also has room for a 50,000 square foot expansion to accommodate business growth.

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