WINDSOR, Ont. — Despite building nearly four million vehicles in 2017, Mexico still needs Canada’s automotive expertise — badly — says the trade and investment commissioner of ProMexico.
Rodrigo Contreras says parts makers are willing to partner with and invest in Canadian companies, particularly those in southwestern Ontario, to help them grow.
“We lack [tool and die] in Mexico,” Contreras told a room full of Canadian moldmakers and parts producers in Windsor, Ont., in late February. “Those aren’t built overnight. It’s almost artistic. You can’t take that back to Mexico.”
Contreras said it would take Mexico years to build the tool-and-die and moldmaking infrastructure that anchors Ontario cities such as Windsor.
“We need more companies from Mexico connected [in Canada]. We need a foot on the ground and risk put into Canada,” he said.
Rene Friesen of Mexico-based parts supplier IZA D&M also sees a dearth of tool-and-die knowhow in Mexico.
“To say there is some tool-and-die experience in Mexico is an overstatement,” he said.
Contreras said when it comes to automotive investment, Mexico companies spent $51.5 billion in the United States between 2003 and 2013. By contrast, they spent just $3.8 billion in Canada.
He wants that number to increase through either strategic partnerships or mergers and acquisitions of Canadian companies.
“Our companies are open to any scenario,” he said. “We need to get the word out about Canada, about potential partnerships.”
Contreras said one Mexico company per month last year received a business permit in Canada. He wants that frequency to increase, but said his country hasn’t set a target.
Just last year, Goss Global, a small Mexican auto supplier said it’s moving its global headquarters to London, Ont., and opening a $5-million manufacturing and research-and-development facility there to better serve the U.S. market.
It’s so rare for a Mexican auto company to expand into Canada that Automotive Parts Manufacturers’ Association President Flavio Volpe said he had “never heard of such a thing” when Goss Global announced the move.
PROJECT IN WATERLOO
Without revealing too many details, Contreras also said a Mexico-based military contractor is opening a facility near Waterloo, Ont., because the city is such a hotbed for autonomous vehicle research and development.
“Windsor is also a great community, with a great deal of assets, that we need to promote more,” Contreras said. “Canada is a safe location for more Mexican business to come compared to the current perception of Mexico in the U.S.”
Last week, U.S. President Donald Trump ordered the U.S. National Guard to patrol the country’s southern border. And U.S. Immigration and Customs Enforcement has been ferreting out illegal immigrants. Trump has also spent nearly two years saying Mexico will pay for a wall to built between the United States and Mexico.
“Canada also has good relationships with other parts of the world, and you have great talent here,” Contreras said.
Volpe thinks it’s a good idea for Canadian companies to work with and accept support from Mexico.
“The milk will be in the coconut if we go past anecdotal to 20 per cent of our investment capital coming from Mexico,” Volpe said. “The Chinese have been offering all kinds of capital, but I think it will be a more prudent option locally [for Canadian companies] to stay within the continent.”
For example, a Chinese consortium in Shanghai in late 2016 bought the Windsor-based Valiant Group, a global supplier of tooling and equipment for the vehicle manufacturing process.
There is some concern from Mexico companies that Canada is too costly, but Friesen doesn’t see it that way.
“I wouldn’t look at Canada as a high-cost country, but rather [that] there is a wealth of knowledge and experience here you won’t find anywhere else,” he said “If you can combine the ambition of Mexico with expertise of Canadian industry, imagine what you can do.”