Guide to Economic Development in the Global Auto Industry - S34

Is Ontario poised to get its
groove back?

Engine production at Toyota in Huntsville,
Ala., and the site for the Toyota-Mazda
joint venture.

by stephanie hernandez mcgavin

ong viewed as a close partner of the U.S.
auto industry, delivering tooling services,
components and finished vehicles in step
with factories in the United States, Canada's
Ontario province has struggled over the past
decade. Now it is battling back - determined
to rekindle local manufacturing.
Canadian economic leaders viewed the
situation as dire, since Ontario is the center of the country's automotive sector. Since
2006, 16 new vehicle assembly plants have
opened in North America - not one of them
in Canada.
Officials now believe they can regain Canada's competitive edge and win new auto investment by partnering with companies on
their investments.
"During the global
recession, our government made the investments necessary to keep
our auto sector strong
during that turbulent
time," Steven Del Duca,
former
Minister
of
Economic Development
Steven Del Duca
and Growth, said in an
interview prior to a June 7 election, during
which he lost his seat. "Ten years later, thanks
to these actions, Ontario has a thriving auto
sector - but there remain important opportunities that call for continued government support and investment."
In May, the Canadian and Ontario governments said they will invest a combined $169
million to support Toyota Motor Corp., which
has announced projects there valued at $1
billion. Toyota said it will upgrade its two Ontario assembly plants to build the next-generation RAV4, as well as incorporate R&D
operations.
Last year, Ford Motor Co. said it will invest
$376 million to establish a connected vehicle
engineering research center in Ottawa.
At the beginning of this year, Linamar
Corp. also said it will invest $385 million in
Ontario. The Canadian government commit-

ted $38 million to the project and Ontario
said it will provide a conditional grant of up
to $39 million. Linamar will use the money
to advance next-generation technology for
electric and connected vehicles, creating
an innovation center dedicated to machine
learning and robotics with 1,500 jobs.
While the U.S. auto industry made a furious comeback in the years following the industry crisis of 2008-2009, some remnants
of it lingered on in Canada. Canada, and
Ontario in particular, lost out on critical automotive investment in 2010 as North American vehicle sales and production began to
rebound, industry veteran Ray Tanguay, now
an automotive advisor to the government
of Canada and Ontario, reported in his 2018
"Drive to Win" report about the outlook for
Canada's auto industry.
"In order for Canada to win investments we
cannot just be competitive," Tanguay wrote
in his report. "We need to be better than other jurisdictions south of the border."
The Linamar investment is a significant
one because it represents a solution for an
emerging opportunity - the industry's need
for more engineering firepower. Linamar
operates 20 plants around Guelph, Ontario.
Del Duca said the supplier is considered a
"true, homegrown success story and a vital
pillar of the local economy in the Guelph region."
Linamar CEO Linda
Hasenfratz said the decision to make a major
investment in Ontario was an important
move for the supplier.
"We have very deep
capabilities and deep
Linda Hasenfratz
bench strength here in
terms of manufacturing and technology,"
Hasenfratz said. "We absolutely want to take
advantage of the fantastic workforce and
people we have here to launch business.
We're dedicated, and always have been, to
manufacturing in Ontario."

E C O N O M I C D E V E L O P M E N T G U I D E / J U LY 2 0 1 8

ALABAMA

Alabama shows the
prep work required
to make it look easy

labama has been making it look easy to
attract the auto industry for the past 20
years. In addition to bringing in major automotive projects from Mercedes-Benz, Honda,
Hyundai and Toyota, the state saw Mercedes
announce last September it will spend $1 billion more at its Vance assembly plant to build
electric vehicles there. And in January of this
year, the city of Huntsville won the bid for a
$1.6 billion joint-venture assembly plant between Toyota and Mazda that will employ
4,000 people.
But the backstory of the Toyota-Mazda
project reveals just how much work has been
going into laying the groundwork to bring the
auto industry to Huntsville.
State and local government agencies, aided
by the seven-state power provider, the Tennessee Valley Authority, have been working for
a decade - since 2008 - to gather and prepare
the raw acreage outside Huntsville that will
now become the Toyota-Mazda auto plant,
expected to open in 2021.
In 2008, Huntsville commissioned land-use
consultants to create a master plan for thousands of acres there. The city began investing in
roads, sewer and utilities soon after, including
paying to widen the major road that leads to it

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