Auto Service World
News   November 26, 2002   by Auto Service World

Parts Makers Seek Government Aid to Stop Automakers’ Drift to U.S.

Shifting North American car industry investment to the south eastern United States is putting Canada’s $C32-billion-a-year parts industry at risk, an association of 400 parts producers said, according to a National Post story reported by automotive website
“Of the last eight [assembly] plants that have come into North America, only one has come into Canada. We really need to look at why,” association president Gerry Fedchun told a Toronto news conference, according to the newspaper.
“Our goal is, out of the next three plants, we’ve got to win at least one of them,” Fedchun added.
The National Post said Canadian industry has been pressing the federal government for more financial help to lure plants to Canada.
But the newspaper said it was uncertain whether more money would make a difference. In the past, federal and provincial aid helped lure Japan’s Honda and Toyota to Ontario in the 1980s and helped the Big Three carmakers expand operations. But subsidies to Hyundai to build a plant near Montreal didn’t stop the South Korean car maker from shutting down the operation in the early 1990s when sales plunged.
The National Post said the parts association’s proposals to help the industry are similar to those from General Motors of Canada president Michael Grimaldi and the Canadian Auto Workers. The parts group calls for increased public spending and tax credits on worker training and research, plus infrastructure improvements along the border between Windsor, Ontario, and Detroit to speed up automotive trade between Canada and the United States.
According to the National Post, the group said such changes would help Canada compete against steep US state incentives that lured Mercedes Benz, BMW, Nissan, Hyundai and DaimlerChrysler in recent years.