Canadian Auto Rebound Lags Behind US as Loonie Continues to Rise
While the United States’ auto industry continues to do a stellar job rebounding, the rise of Canada’s dollar has automakers turning their backs on the plants in Canada.
Reports are coming in that investment in Canada’s auto plants may fall to just $1.2 billion this year, the lowest since the mid-1980s. It’s also 62-percent lower than the past decade’s average according to Bank of Nova Scotia, which means Canada will continue to lag behind. To compare, Ford is planning to invest $13.3 billion in US plants over the next four years, leaving very little funding left for Canada’s plants. In fact, Ford this year closed their St. Thomas Assembly Plant in Ontario that had made their Crown Victoria and Lincoln Town Car.
This is a vast change of events compared to 2003, when Ontario, Canada was the largest North American producer of vehicles – taking the spot from the state of Michigan. But now their surging currency and companies in the US cutting labor costs has shifted investment back to the States.
Another factor impacting the spending is the fact that the US has a new labor agreement with the United Auto Workers (UAW), helping level the labor costs compared to foreign rivals. The Canadian Auto Workers (CAW) however are working with the automakers for a new contract for 2012. Unfortunately though, the CAW has fought many of the cost cuts the UAW has accepted.
[Source: Automotive News]
Jason Siu began his career in automotive journalism in 2003 with Modified Magazine, a property previously held by VerticalScope. As the West Coast Editor, he played a pivotal role while also extending his expertise to Modified Luxury & Exotics and Modified Mustangs. Beyond his editorial work, Jason authored two notable Cartech books. His tenure at AutoGuide.com saw him immersed in the daily news cycle, yet his passion for hands-on evaluation led him to focus on testing and product reviews, offering well-rounded recommendations to AutoGuide readers. Currently, as the Content Director for VerticalScope, Jason spearheads the content strategy for an array of online publications, a role that has him at the helm of ensuring quality and consistency across the board.
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