Automotive News Canada - January 2021- v2 - 11

OPINION

01.21

2021will test the
lessons of 2020
JEFF MELNYCHUK | EDITOR-IN-CHIEF

IF SOCIAL MEDIA IS ANY INDICATION, PEOPLE WERE RATHER
anxious to kick 2020 to the curb, perhaps thinking that there was a
magic reset on Jan. 1, 2021. It might be great if that were the case, but
of course, it's not.
One humorous New Year's Eve meme on Facebook proved the sentiment beautifully. In it, the countdown to 2021 is
on, but instead of the clock rolling over to 12:00
The industry's
a.m. from 11:59 p.m., it hits 11:60. For what
darkest days might seemed like a never-ending year, the meme
have been funnier if it wasn't true.
be ahead, but 2020 would
And the truth is January 2021 was instantly
made businesses
worse than January a year ago because back
then, we didn't have a pandemic with lockdowns
realize they could
and curfews, or economic chaos and uncertainty.
adapt and even
This January is just an extension of December
thrive in chaos.
2020, sort of the first episode of season 2 of the
2020 Canadian auto industry. There is no reset.
So the burning question is what's in store for season 2?
Here's what we know: COVID-19 will rage on for months until the bulk
of Canadians are vaccinated. Until that time - a moving target depending on vaccine availability and the ability for public health to get it into
people's arms - interprovincial borders that are currently closed will
remain closed.
The U.S. border will remain closed to nonessential travel, which
means, for another tourist season, Americans will not be allowed into
Canada en masse to spend their dollars. With less travel, there appears
to be no rebound in sight for airlines. The Globe and Mail reported Jan.
8 that Westjet is laying off another 1,000 employees. Pre-pandemic,
there were about 14,000. After the most recent cuts, there will be about
4,700.
Bigger picture, CTV News reported that Canada lost 63,000 jobs in
December, the " first decline since April ... amid tightened public health
restrictions in December, and economists warn the losses are likely to
continue as the number of new COVID-19 cases continue to rise. " The
signs point to a weakening economy that
will affect the purchase of big-ticket items.
Assuming most Canadians will be vaccinated by summer, COVID-19 restrictions of
some sort could be in place well into the
fall. So the question is perhaps not what
will 2021 bring, but can business take
another six to nine months of the panDealerships learned
demic?
to pivot to survive in
And this chaos is only what we know
2020. There will be more
is in store for us. Back in January 2020,
pivoting in 2021.
who knew all this was going to unfold?
P H O T O : G R E G L AY S O N
What happens if 2021 unloads its own
disaster(s) on top of 2020's disasters and their fallout disasters? And
what if, when COVID-19 is beaten, recovery is a yearslong road?
A story on Page 14 outlines some of the known issues the Canadian
auto industry faces in 2021, from trade and environmental policies of a
new U.S. administration to rapid advancement of electrification.
But anything to do with new-vehicle sales carries a big, fat asterisk
related to how much worse (or better) COVID-19 gets and the health
and economic responses from government.
So will the auto industry have what it takes? If 2020 had a positive
side, it was that businesses learned to be nimble so that quick pivots
could be made to implement new ideas. Because we now live in an age
that requires us to expect anything and everything at anytime.
Make no mistake, the lessons of 2020 will be needed to make it
through 2021. - ANC

EST. 1925

PUBLISHED WEEKLY BY CRAIN COMMUNICATIONS, INC.
KEITH E. CRAIN, EDITOR-IN-CHIEF
KC CRAIN, GROUP PUBLISHER
JASON STEIN, PUBLISHER

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Challenges plague auto sector
I TEND TO WORRY. IT'S NOT A TRAIT I'M PROUD OF,
" You can't be cost efficient if you keep the entire
but it is what it is.
scale of both companies, " Karl Brauer, executive
And despite the celebratory headlines generated
analyst for the iSeeCars.com auto website, told
by Unifor's $4.9-billion-investment win in Detroit
the Associated Press.
Three bargaining, I still worry about
Greig Mordue, ArcelorMittal
the future of Canada's auto manDofasco chair in advanced manuufacturing footprint.
facturing policy at McMaster
MANAGING EDITOR
With the exception of General
University in Hamilton, Ont.,
Motors' pledge to build pickups at
argues that the Detroit Three
GRACE
its plant in Oshawa, Ont., as early
investments do not mark a rebirth
MACALUSO
as January 2022, the promises for
in Canadian auto manufacturing.
Ford Oakville and FCA Windsor are
" Fundamental competitive
too far off into the future to offer
challenges persist for a country
COMMENT
any peace of mind.
that lacks homegrown automakers, " he says.
The Windsor minivan plant is
Since 2000, multiple auto-assembly plants have
down to two shifts from three as consumers
closed in Canada, he says. During the same period,
increasingly opt for pickups and utility vehicles. Not
lower-cost Mexico has almost doubled annual
to worry, say FCA and Unifor. The third shift will
return with a $1.3-billion plant upgrade to crank out light-vehicle production to about four million units,
says Mordue.
yet-to-be named electric vehicles and plug-in
In 2019, Canada made fewer vehicles than
hybrids by 2025. We don't know
Canadians purchased, the first time that has hapwhether conditional government
Detroit Three funding has been secured for
pened since 1964, he says, and this year,
investments the minivan plant's retooling.
Canadians will make about half as many vehicles as
they did in 2000.
Ford's
$1.8-billion
plan
to
do not mean assemble EVs at the Oakville
Canada also
Canada's
is lagging further
plant by 2026 seems more cerbehind " core
industry has tain since Ottawa and the
Ontario government are kicking
automotive comturned the
in $590 million.
petitors " such as
corner.
As we await the fruition of
the United States The FCA-PSA merger raises
these promises, new questions
in research and new questions about the
hover over the fate of FCA's Brampton and Windsor
development.
future of FCA's Brampton and
plants under Stellantis, which is the company born
" Even
Windsor plants. F I L E P H O T O
of the merger between the Detroit automaker and
Canadian-based
France's PSA Group.
suppliers do the bulk of R&D in the U.S. "
Some industry analysts warn that the struggling
The Detroit Three investments, Mordue says,
Chrysler brand and niche Dodge muscle cars, which " are helpful ... but let's not kid ourselves that
are produced in Canada, could face the axe as the
Canada's auto industry has turned a corner. "
new company seeks cost savings.
- ANC

Riding the 2020 roller coaster
WHEN I WAS A KID, I
absolutely loved roller coasters.
My family would take an annual
trip to Cedar Point in Ohio, and I
couldn't get enough of the
Magnum or Gemini or Blue
Streak.
Trust me when I say that
2020 had more ups and downs
than that trio of coasters combined.
There's the long-term-care
debacle, in which hundreds of
elderly Canadians tragically died
in the grips of COVID-19. The
mental health crisis that the
pandemic brought along with it,
isolating seniors and keeping
kids from their friends. And the
hundreds
of thouSome of the
sands left
auto industry's unemployed
greatest
achievements because
of lockcame during the downs,
lack of
darkest days
travel and
of COVID-19.
a halt in
dining out.
Those were just some of the
downs we all suffered through.
But thankfully, my job covering Canada's auto industry provided a number of ups. And
there were some truly fantastic
views from the peaks of the roller coaster that was.
Canada's supply chain
answered the call to donate one
million masks to the brave men
and women on the front lines of
this stubborn pandemic.

DIGITAL AND
MOBILE EDITOR

GREG
LAYSON

COMMENT
Companies such as Cavalier Tool
& Manufacturing, Valiant TMS
and Linamar turned on a dime
and began churning out medical
parts and supplies as the need
for everything from hand-sanitizer stations and face shields to
ventilators ramped up.
And Project Arrow hit its
mark. The all-Canadian,
zero-emission vehicle project of
the Automotive Parts
Manufacturers' Association
came to life - leaping from the
design pages to 3D modeling
before our very eyes, conjuring
images and a sense of pride
perhaps not seen in Canadian
engineering since the days of
the Avro Arrow fighter jet.
And then, Unifor President
Jerry Dias and his bargaining

The Project Arrow story
stirred national pride in 2020.
FILE PHOTO

committee pulled off the impossible by landing nearly $5 billion
worth of Detroit Three auto
investment in Canada. Most of it
committed to an electric future,
all of it committed to preserving
- and perhaps creating -
thousands of jobs in auto
assembly and the supply chain
that feeds it.
Sure, when I look back on
2020, I vividly remember - and
cringe - over the never-ending
March break I had to endure
with the kids, who were home
from March 13 through Sept. 8.
And I remain saddened by how
long-term-care homes were ravaged - twice - by COVID-19.
And I'm still appalled by politicians who soaked up some sun
while the majority of us sucked
it up and stayed home over the
holidays.
But I also look back and
smile when I think of all those
great things the industry accomplished for the greater good of
everyone - from nurses to
patients, suppliers to dealers,
automakers to unions and everyone in between.
Sure, lockdowns and curfews
will continue to come and go.
But a vaccine is rolling out.
Economic growth will be slow,
however, sales forecasts are
bright. Hurdles undoubtedly
remain. So there might very well
be as many ups as there will be
downs.
But life has always been a
roller coaster. You just have to
learn to ride it. - ANC

http://www.iSeeCars.com

Automotive News Canada - January 2021- v2

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