For generations, automotive manufacturing has made an outsized contribution to the Canadian economy. The industry's growth was supported by active industrial policy, including an evolving combination of incentives: low-cost, high-quality labour, access to the largest market in the world, and investment inducements; and deterrents: market access and trade-related levers and threats. In recent years, many of the advantages Canada made for itself have eroded. The rise of new competitors, shifting philosophies surrounding trade, cost pressures, and a new paradigm with respect to investment incentives have challenged policy-makers. Several attributes previously considered the preserve of advanced countries like Canada are now evident in lesser developed jurisdictions, a phenomenon that this paper terms the commoditisation of automotive assembly. It is the result of standardised production processes and the automotive industry's ability to recruit top tier talent, particularly in less developed countries. This phenomenon is evident in the convergence of quality results and capital intensity across geographic boundaries and economic strata, expanding production in lesser developed countries, the emergence of luxury vehicle production in those countries, and stagnation of final assembly production in developed countries.
L'industrie automobile canadienne a fait l'objet d'une importante restructuration entre 2005 et 2014. Dans cet article, à partir de données recueillies au niveau des usines, nous examinons ces changements, liés à la fois à l'assemblage et à la fabrication des pièces. Nous montrons également les limites que pose l'utilisation des statistiques gouvernementales officielles pour étudier l'industrie automobile. En plus d'analyser les transformations dans la structure et la composition du secteur, nous démontrons, à partir de nos données, que celui-ci emploie beaucoup plus de gens que ne le rapportent les statistiques gouvernementales officielles. Nous en concluons qu'il est important d'améliorer les méthodes de collecte des données pour que les décideurs politiques puissent soutenir efficacement l'industrie automobile. Mots clés : industrie automobile, restructuration, codes du Système de classification des industries de l'Amérique du Nord (SCIAN) The Canadian automotive industry underwent substantial restructuring between 2005 and 2014. This article draws on establishment-level data to examine these changes as they relate to both automotive assembly and automotive parts manufacturing. It also elucidates the limitations of using official government statistics to study the automotive industry. In addition to analyzing changes to the structure and composition of the industry, our data demonstrate that the industry employs far more people than are reported in official government statistics. We conclude that improvements to data collection methods are important for policy-makers to develop effective supports for the automotive industry.
Au cours des années 1980, le paysage de l'industrie automobile canadienne s'est transformé, alors que cinq nouveaux manufacturiers venant de l'extérieur de l'Amérique du Nord ont fait des investissements importants au pays. Le secteur, jusqu'alors dominé par des intérêts américains, s'est ainsi beaucoup diversifié sur le plan de la propriété des entreprises. Comme le Canada a alors réussi à attirer des investissements étrangers, on pourrait penser que ceux qui ont participé à ce processus avaient un plan cohérent, et que les réussites se sont succédé ; la réalité, toutefois, est qu'il y a également eu des lacunes et des échecs. Grâce à des archives et à des sources secondaires, cet article présente le développement économique de l'industrie automobile canadienne durant cette période. Les décideurs politiques peuvent en tirer d'importantes leçons : il faut s'assurer de bien arrimer les objectifs et les politiques ; des personnes ayant beaucoup de pouvoir peuvent agir sans tenir compte des mécanismes de gouvernance, même dans de grandes entreprises ; et des facteurs exogènes peuvent entraver la réalisation des plans même les mieux conçus. Mots clés : industrie automobile, Canada, échec, promotion de l'investissement, investissement étranger direct During the 1980s, Canada's automotive manufacturing assembly landscape changed when five new manufacturers from outside of North America made large-scale investments. The industry shifted from one focused on US-owned corporations to one with a much more international orientation. Because of the success Canada enjoyed in attracting foreign automotive investment, one might conclude that those engaged in the process did so with a coherent plan and that the period was marked by one success after another. The reality, however, is that several misses also occurred. Layering archival sources and interviews with secondary sources, this article contributes to the history of the economic development of Canada's automotive industry. Through this, important lessons for policy-makers are offered: The process of goal and policy congruence is demonstrated; one sees how dominant personalities can override governance mechanisms, even in large corporations; and one observes the capacity of exogenous factors to affect the best-laid plans.
In the 1980s, the Canadian automotive manufacturing industry grew from three significant players to eight, growth that was facilitated by public policy schemes that were bold, calculating, and provocative. The decision to introduce direct incentives was pivotal, generating anxiety at both the federal and provincial levels. However, the evolution of a series of additional policy tools, each holding tangible value, proved just as important. These included waiving Auto Pact liabilities, the introduction of targeted duty remission plans, adjustments to Voluntary Export Restraints, and manipulations of the Foreign Investment Review Agency. These elements were under the management of Canada's federal government, making it a far more active participant in automotive foreign direct investment (FDI) attraction than its US equivalent. While some observers believe that the approach that public policy-makers brought to automotive FDI attraction during the period this article explores might hold lessons for present day practitioners, the reality is that the evolution of global governance structures precludes access to many of the tools that were deployed with such effect in the 1980s. Despite the subsequent changes, the relevance of coherent, well-timed industrial policy endures.
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