A Look At The Effects The Auto Industry Has On Durham

Durham, ON, Canada / channel12

In less than two months Unifor will head to the bargaining table with GM Canada.  Until then, many will continue to speculate on the future of the Canadian auto industry.  Joe Scarpelli has our top story.

Just one day after Unifor Local 222 held a press conference to push GM for new product, the Conference Board of Canada says Canada’s motor vehicle production is stuck in first gear.  It says that while Canadian vehicle manufacturers are benefiting from strong consumer demand, the future doesn’t look too bright.

Sabrina Bond, Economist, CBofC

“Well the key story in the industry is going to be to continue to focus on designing and manufacturing products in which Canada has a comparative advantage.  For us right now that comparative advantage is shaping out to be in light trucks, SUV’s, and CUV’s.  Those have been really strongly consumed in the last couple of years and in the first quarter of 2016 about 65% of new vehicle sales south of the border were actually light trucks, so that’s playing to our advantage and those vehicles also have higher profit margins in the smaller passenger car segment which is increasingly being off shored to Mexico.”

Bond says her area of concern is the pattern of under investment in the industry.

“Since the turn of the millennium we’ve seen about a 35% reduction in investment in motor vehicle manufacturing sector in non-residential and machinery and equipment investment and it has not come back to pre-recession levels, we don’t anticipate it will.”

In a community update Tuesday, GM Canada President Steve Carlisle said, “GM remains committed to doing a strong business in Canada, in terms of sales, assembly and now in new advanced engineer work.”

GM and Unifor are to head to the bargaining table in August and September.

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