Skip to main content
Sister Publication Links
  • Automotive News
  • Automotive News Europe
  • Automotive News China
  • Automobilwoche
Subscribe
  • Subscribe
  • login
  • HOME
  • News
    • News by Brand
    • Auto Shows
    • Canadians Abroad
    • Photo Galleries
    • Automakers
    • Suppliers
    • Retail
    • Dealer Best Practices
    • Government Relations
    • Trade and Tariffs
    • Technology
    • Labour
    • Aston Martin
    • BMW
      • Mini
      • Rolls Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Ferrari
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
    • Honda
      • Acura
    • Hyundai
      • Kia
    • Mazda
    • Mitsubishi
    • Nissan
      • Infiniti
    • Stellantis
      • Alfa Romeo
      • Chrysler
      • Dodge
      • Fiat Chrysler
      • Jeep
      • Fiat
      • Lancia
      • Maserati
      • Ram
    • Subaru
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
    • Volvo
    • VinFast
    • Toronto Auto Show
  • Opinion
    • Blogs
  • Video
  • Podcasts
  • EVENTS & AWARDS
    • 2022 Auto News Canada All-Stars
    • 2022 Canadians To Watch
    • 2022 Diversity Champions
    • Best Dealerships To Work For
    • Canada Congress
    • Retail Forum: Dealer Discussions
    • Leading Women Roundtables
    • Embracing Diversity Roundtable
    • EVs Decoded
  • Jobs & Classifieds
  • +MORE
    • IN THE DRIVER'S SEAT
    • NEWSLETTERS
    • SUBSCRIBE
    • CLASSIFIEDS
    • PEOPLE ON THE MOVE
    • COMPANIES ON THE MOVE
    • WEBINARS
    • ADVERTISE WITH US
    • CONTACT US
    • DIGITAL EDITION
    • PUBLISHING PARTNERS
MENU
Breadcrumb
  1. Home
  2. Automakers
July 27, 2020 12:01 AM

Is the threat to Ford's Oakville, Ont., assembly plant real?

Dana Flavelle
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Greg Layson

    At its peak, the Oakville operations, including a separate truck plant built in 1966, employed between 7,000 and 8,000 people.

    CLARIFICATION: A previous version of this story didn’t make clear that Ford Oakville was among the top 10, and sometimes top 5, largest manufacturers in Canada.

    The union local representing workers at Ford of Canada’s Oakville, Ont., assembly plant says this isn’t the first time it will go into contract negotiations fighting for a new product, and potentially the plant’s survival.

    “We’ve been here before,” said Mark Sciberras, president of Unifor Local 707, which represents nearly 4,200 hourly employees there.

    In late 2006, the Freestar minivan, a rebranded version of the popular Windstar, was coming to an end, but the plant would benefit from a $1 billion investment to produce the new Edge, Sciberras told Automotive News Canada.

    The Edge would go on to be a big seller in the growing market for crossover utility vehicles, securing the plant’s future for another 15 years.

    But this time it’s far from clear what might happen following reports that Ford Motor Co. is scrapping the next-generation Edge, leaving the Oakville plant with no new product mandate after 2023.

    Industry observers say Ford, which has declined to confirm or deny the forecast by AutoForecast Solutions, could be floating a trial balloon ahead of fall contract talks with Unifor. But it’s also possible the company might be paving the way to pull the plug on its last remaining vehicle assembly plant in Canada.

    “Ford has, historically speaking, had a strong presence in Canada, but so did General Motors,” said Dimitry Anastakis, a professor with the University of Toronto’s Rotman School of Management, referring to GM’s decision to close its largest Canadian assembly plant, in Oshawa, in 2019.

    “But we’re in a COVID crisis and crises tend to accelerate long-term trends. And the trend in Canada has been to reduce the [auto manufacturing] footprint.”

    The global auto industry is facing unprecedented challenges to produce automated, driverless, electrified vehicles while a global pandemic has thrown a massive wrench into sales and profits, said John Holmes, a professor emeritus at Queen’s University in Kingston, Ont.

    BURNING THROUGH CASH

    “The capital requirements for the EV, let alone the autonomous stuff, are horrendous. And given they’re all burning through a lot of cash during COVID, it’s not surprising [if] they’ve postponed or canceled some of the programs they were previously committed to,” Holmes said.

    Ford has a long history in Canada, starting in 1904 when Henry Ford signed a deal with Gordon McGregor of Walkerville Wagon Works, now in Windsor, Ont., to produce Ford-branded vehicles for the Canadian market and beyond, taking advantage of Canada’s favourable trade relations with the British Empire.

    The company would grow on the early success of the Model T car. Unlike other branch-plant automakers, Ford of Canada had its own shareholders and made its own decisions about which models to build.

    “Cars built by Canadians for Canadians,” the ad in the Toronto Daily Star proclaimed in May 1953 when Ford moved its assembly operations and head office to the eastern edge of Oakville to be closer to the growing Toronto market.

    Though it would never achieve the massive scale of GM's assembly plant in Oshawa, Ford Oakville was among the top 10, and sometimes top 5, largest manufacturers in Canada, said Brendan Sweeney, managing director of the Trillium Network for Advanced Manufacturing.

    “This is a very important part of Canada’s manufacturing ecosystem. And certainly, a very important part of Ontario’s economy and the [Greater Toronto Area],” Sweeney said.

    AUTO PACT BENEFICIARY

    Along with the rest of the Canadian auto manufacturing industry, Ford benefited from the signing in 1965 of the Auto Pact between Canada and the United States, which imposed local content requirements for vehicles to enjoy tariff-free status.

    At its peak, the Oakville operations, including a separate truck plant built in 1966, employed between 7,000 and 8,000 people. But that all changed after  Canada and the U.S. added low-cost producer Mexico to a broader North American Free Trade Agreement in 1994 and the Auto Pact was declared illegal by the World Trade Organization in 2001.

    The southern U.S. states and Mexico began competing for new automotive assembly plants, offering generous incentives, free land, tax breaks and lower labour costs.

    Global automakers began shifting production farther south.

    In 2004, Ford closed the Oakville truck plant, at a cost of 1,200 jobs.

    “That was a big blow for us,” Unifor’s Sciberras said.

    The Canadian and Ontario governments responded with incentives aimed at stemming the exodus. Ford was among the beneficiaries.

    Since 2005, Ford has invested almost $3.5 billion in its Canadian operations while the two levels of government contributed more than $639 million, according to the automaker.

    But incentives were never enough to prevent a wave of auto plant closures that swept through the province. In 2011, Ford announced it would close the Talbotville assembly plant, near St. Thomas, which made the Crown Victoria and Mercury Grand Marquis models.

    BAILOUT REBUFFED

    Ford avoided becoming part of the massive government bailout during the financial crisis of 2008-09 that saw the Canadian and Ontario governments invest $14 billion in GM and Chrysler to keep them from going out of business. The deal was tied to Canadian production commitments that expired in 2016.

    “So they don’t have an obligation with either the federal or provincial governments. But they do have a corporate citizen obligation. They’ve been in Canada more than a century. The Ford people are very sensitive about their history in Canada,” said the University of Toronto’s Anastakis.

    “If Oakville does close, that’s going to be really bad news for the Canadian auto industry,” Holmes said.

    RECOMMENDED FOR YOU
    Ford losing billions on EVs but sees profits on horizon
    Recommended for You
    FORD_E-MAIN_i.jpg
    Ford losing billions on EVs but sees profits on horizon
    MACHE-MAIN_0_0.jpg
    Ford expects to lose US$3 billion on EVs this year
    Remote Work
    How to find the perfect work balance in auto
    Andy Wadeson
    Sponsored Content: Expert Insights: The Implications of Rising Interest Rates
    Digital Edition
    March 2023 Cover
    View latest issue
    See our archive
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    THE BIG STORY: Catch up on the top news of the week with our video round up. We'll email you a summary of the video and a link to watch.
    Get Free Newsletters

    Sign up today for our Weekly Newsletter, Daily Newsletter and Breaking News Alerts. We'll deliver the news you need to know straight to your inbox.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Subscribe Now

    An Automotive News Canada subscription includes 12 monthly issues – delivered in print to your doorstep, and digitally to your inbox – plus unlimited, 24/7 access to our website.

    Subscribe Now
    Connect With Us
    • Facebook
    • Twitter
    • Instagram

    Our Mission

    The Automotive News Canada mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in Canada.

    Contact Us

    1155 Gratiot Ave
    Detroit MI 48207

    1-877-812-1257

    Email Us

    ISSN 2475-5001 (print)
    ISSN 2475-501X (online)

    Resources
    • About us
    • Contact Us
    • Digital Edition Archive
    • Advertise with Us
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Canada
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • News
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Ferrari
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
        • Honda
          • Acura
        • Hyundai
          • Kia
        • Mazda
        • Mitsubishi
        • Nissan
          • Infiniti
        • Stellantis
          • Alfa Romeo
          • Chrysler
          • Dodge
          • Fiat Chrysler
          • Jeep
          • Fiat
          • Lancia
          • Maserati
          • Ram
        • Subaru
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
        • Volvo
        • VinFast
      • Auto Shows
        • Toronto Auto Show
      • Canadians Abroad
      • Photo Galleries
      • Automakers
      • Suppliers
      • Retail
      • Dealer Best Practices
      • Government Relations
      • Trade and Tariffs
      • Technology
      • Labour
    • Opinion
      • Blogs
    • Video
    • Podcasts
    • EVENTS & AWARDS
      • 2022 Auto News Canada All-Stars
      • 2022 Canadians To Watch
      • 2022 Diversity Champions
      • Best Dealerships To Work For
      • Canada Congress
      • Retail Forum: Dealer Discussions
      • Leading Women Roundtables
      • Embracing Diversity Roundtable
      • EVs Decoded
    • Jobs & Classifieds
    • +MORE
      • IN THE DRIVER'S SEAT
      • NEWSLETTERS
      • SUBSCRIBE
      • CLASSIFIEDS
      • PEOPLE ON THE MOVE
      • COMPANIES ON THE MOVE
      • WEBINARS
      • ADVERTISE WITH US
      • CONTACT US
      • DIGITAL EDITION
      • PUBLISHING PARTNERS