The Restructuring of Canada's Automotive Industry, 2005–2014

Abstract

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.

A review of global automotive industry’s competitive strategies

“…According to study by Hertenstein and Williamson (2018), it can be observed that China has overtaken the USA to become the largest automotive market in the world since 2013, and in India, as per Loganathan (2013), multinational companies are setting their foot to leverage the growth in the automobile sector. Most efforts are initiated by governments in their policies such as in South Africa (Lamprecht and Tolmay, 2017), China (Lee and Mah, 2017), Canada (Sweeney and Mordue, 2017) and in Japan (Buigues, 2017). Besides policies, there are numerous efforts by governments, such as China has import quota system (Chen, 2017), Koreans push for export markets (Bartnik et al, 2018), Turkey promotes flexible firm structures (Senlier and Salihoglu, 2017) and Thailand supports to develop mold and die industry quickly (Tiengtavaj et al, 2017).…”

Challenges Confronting the Canadian Automotive Parts Industry: What Role for Public Policy?

“…In this article, we focus on findings related to the influence of public policies in shaping plant-level competitive strategies. 3 Others have estimated employment in the automotive parts industry to be as high as 95,000 (see Sweeney and Mordue 2017)…”

“…The US and Canadian federal governments and the Ontario provincial government were each heavily involved in the 2009 bankruptcy restructuring of GM and Chrysler (Stanford 2010). The restructuring reduced the manufacturing footprints of both GM and Chrysler and had far-reaching impacts on suppliers, including numerous plant closings and a consolidation of the supply base (see Sweeney and Mordue 2017).…”

The commoditisation of automotive assembly: Canada as a cautionary tale

“…In the three years following the WTO verdict and Canada's decision not to appeal, GM, Ford, and Chrysler each closed assembly plants in Canada. Dozens of large automotive parts plants closed as well, a disproportionate amount of which were owned by major US suppliers that originally located production in Canada to support the value-added requirements of the Auto Pact (Anastakis, 2005(Anastakis, , 2013; see also Sweeney and Mordue, 2017). How the governments of Canada and Ontario responded to those events frames the second outcome: the shift in the approach to incentives.…”

“…Following peak levels of production in the late 1990s, production declined steadily between 2000 and 2007, collapsed during the financial crisis of [2008][2009], and recovered modestly after 2010. Moreover, no OEM has announced a new assembly plant in Canada since 2005, several OEM assembly and powertrain plants have closed, as have hundreds of independent parts plants (Sweeney and Mordue, 2017). Perhaps more concerning for policy-makers is that OEMs have made substantial Greenfield investments in the southern US and Mexico at the same time that Canadian vehicle production has declined.…”