Automotive News Canada - October 2017 - 21

* OCTOBER 2017

out products including the Dodge
Monaco, Dodge Magnum and the
Chrysler New Yorker. It currently builds the Chrysler 300 and the
Dodge Charger and Challenger.
The plant has had a large economic impact on Brampton. The
Toronto suburb has boomed in the
three decades since it opened.
"FCA has been ahead of the
curve. I hope they see our employees as problem solvers and they
keep building products people want
to be built" Brampton Mayor Linda
Jeffrey said. "I hope we can continue
working with them for a long, long
time."
The question, though, is how
the plant can sustain itself in the
long term.

CHANGING MARKET
Perhaps the most immediate danger rests in the shift in consumer
demand toward utility vehicles.
The three vehicle models the
plant builds are relatively low-volume cars for FCA. Not utility vehicles. The automaker sold a combined 169,731 units of the Charger,
Challenger and Chrysler 300 in the
United States and Canada through
September, down 3.8 per cent from a
year earlier.
FCA declined
a request for comment by Automotive
News Canada.
Automotive
News reported in
2016 that FCA would
continue building
the three cars at the Brampton
plant until at least
Mayor Linda
2020.
Jeffrey says
Beginning with the city wants
the plant "for
the 2021 model
a long, long
year, FCA plans
time."
to move two
of the vehicles
onto its new flexible Giorgio platform. The third would be cancelled,
according to sources familiar with
FCA's plans.
What happens beyond that is an
open question, Dziczek said. She said
the Giorgio platform gives the automaker flexibility in deciding where
to build various models and when to
invest in plants.
That could be good news for the
plant's workers, as the Giorgio platform could allow a high-margin
Jeep, for instance, to be built there.
It also gives FCA the ability to more

ting down any plant is highly complicated. Any remaining production
would need to be shifted to other
plants and entire distribution networks would need to be overhauled.
But should FCA, or whoever controls the plant, ever considers shutting it down, the decision could be
made easier by the land value.

PRIME REAL ESTATE
Recent housing development near Fiat Chrysler's Brampton, Ont., plant
have made its real estate valuable. ( P H O T O : J O H N I R W I N )

easily move Brampton sedan production elsewhere.
"It's hard to tell anything at this
point," Dziczek said.
He added that the paint-shop
investment at minimum buys the
plant about five more years because
it cannot close the plant in the middle of a labour contract.

THE NAFTA FACTOR
The plant's long-term viability, like those of many others in
Canada and the United States,
could ride in large part on NAFTA
renegotiations, which began in
August.
One major roadblock in early
talks between Canada, Mexico and
the United States, centered around
U.S. automotive content requirements, according to a September
report by the Reuters news agency.
Citing a lobbyist familiar with
U.S. proposals, at least 35 per
cent of each vehicle would need
to be sourced within the United
States to enter that country tariff-free.
Any major shift in NAFTA's
parameters or a U.S. exit from the
treaty would bring more uncertainty to Brampton.
For Dias, whose union represents Brampton workers,
major changes are necessary for
Canadian and U.S. manufacturing
to become viable again. He said
Canada and U.S. autoworkers have
been "screwed over" by NAFTA
since its ratification in the early
1990s, as thousands of auto jobs
have shifted to lower-wage Mexico
in that timeframe.
"When Trump says he might
cancel NAFTA, I say good," Dias
said. "It's been a pile of garbage for
Canada. For Canada, it's worse off if
we stay in as it's written."

BRAMPTON
ASSEMBLY
* Built: 1986 (by American
Motors Corp.)
* Employees: 3,427, including
3,202 hourly workers
* Union: Unifor Local 1285
* Floor space: 2.95 million square
feet (274,063 square metres)
* Products: Chrysler 300, Dodge
Challenger, Dodge Charger
* Examples of previous products: Eagle Premier, Dodge
Monaco, Chrysler Concorde,
Dodge Intrepid, Dodge Magnum
The task of adjusting the company's Canadian manufacturing
footprint to any changes in NAFTA
could be further complicated by a
potential sale of FCA. Automotive
News reported in August that Chinabased automaker Great Wall is interested in acquiring FCA, though FCA
has said it has not been approached
with an offer. Such a deal would
have to clear several major U.S. regulatory hurdles, including a national-security review.
Still, a potential sale raises questions about the Brampton plant's
future, especially because any buyer
would likely only be interested
in the Jeep and Ram brands. For a
plant that builds only Chrysler and
Dodge models, that could spell longterm trouble.
One factor working in the plant's
favour, beyond its high efficiency
and skilled workforce, is that shut-

John Andrew, a professor at
the Schools of Urban and Regional
Planning and Business and
Environmental Studies at Queen's
University in Kingston, Ont., said
the plant sits on prime real estate.
Population of the suburb northwest
of Toronto has boomed by about
75 per cent since 2011 to more than
570,000 residents today.
New housing and retail developments have sprung up, including around the Brampton plant.
Just north of the plant, for instance,
are relatively new housing developments, while the land east of the
plant is awash in retail development.
More housing lies to the west.
"Normally when you see a large
housing development like that in
close proximity to an industrial
plant, it speaks in large part to a lack
of planning. When that plant went in
there, there probably wasn't a whole
lot around it," Andrew said.
"Because there's such strong
demand for housing there, people
just sort of said that we'll live with
it. But it's not ideal."
Andrew said the Brampton
plant's land could be sold for a high
price to developers.
"It's a tricky property because
closing it would mean moving a
great deal of equipment in there,"
Andrew said. "That's the difficult
part. It's not like you're just emptying a simple warehouse. But it's
a good-sized property and it's wellserved being by the highway. There
are a lot of potential uses there,
including retail or a large residential development."
Still, the best thing working
in the plant's favour might be the
North American political climate.
Simply put, closing a Canadian plant
at a time when public opinion in the
United States and Canada is shifting
dramatically could be bad optics for
FCA.
"I think we're in awfully good
shape here," Dias said. "This plant is
a gold mine." - ANC

Table of Contents for the Digital Edition of Automotive News Canada - October 2017