Canada’s automotive future doesn’t exist in luring new vehicle assembly plants but in the supply chain’s ability to adapt to a self-driving and electric technologies, says Ray Tanguay, the former Toyota executive and federal and provincial auto adviser.
It’s unlikely that Canada will attract new auto plants primarily because North America already has more than enough, Tanguay told Automotive News Canada. That leaves the focus on the supply chain.
“I think to get major investment in new plants anywhere is going to be a major challenge. That’s why in Ontario it’s important to maintain a certain footprint in your assembly plants because that’s how you can maintain a cluster of suppliers. And without the clusters, eventually you will disappear
“We have to build the cluster of the future technology in Ontario if we want to remain relevant.”
Few people are better qualified to address Canada’s automotive future. Before becoming the “car czar” in 2015, Tanguay was president of Toyota Motor Manufacturing Canada (TMMC). During his rise through the ranks at Toyota, which he joined in 1991, the TMMC assembly plant in Cambridge, Ont., expanded many times over and garnered multiple J.D. Power quality awards.
After retiring from TMMC, Tanguay spent the next three years as the federal and Ontario governments’ adviser on attracting automotive investment. Tanguay said his contributions came to fruition during the recent Detroit Three-Unifor contract talks, which netted almost $6 billion in new investments in Canada.
One key element: his recommendation that governments support investment with grants, not loans.
Since delivering his report, “Drive to Win,” in 2018, the 71-year-old has not slowed down. Tanguay sits on three boards and three advisory councils and remains involved with the University of Waterloo in Ontario.
Tanguay now divides his time between Kitchener and Wasaga Beach, Ont. He drives a Lexus RC F coupe that has seen occasional track time and an RX 450h crossover. He sold his snowmobile a few years ago but still rides a couple of Harley-Davidson motorcycles in the warmer months.
Tanguay commented on a range of issues:
HIS LEGACY AS AUTO ADVISER
I’m very, very pleased with the outcome. I spent a tremendous amount of time to have a better understanding of the issues [and] engage all the stakeholders. When it came time for the report, there was not a lot of pushback because everybody — federal and provincial government, [automakers], Tier Ones and labour — gave their stamp of approval that this report reflected what they thought was important.
As a result, the federal government took my report, and it became part of their strategic plan. The provincial government [made it] their auto strategy directly.
WHAT ABOUT “CORPORATE WELFARE”?
You always have to compete for investment. You can be a purist, but that’s not the way you win the game.
The incentive was one of the major things I pushed ... to change the federal incentive from interest-free loans to a grant form.
People may say, “Who are you to give money to rich companies?” Well, do you want the jobs or not? And the payback on those investments is easy to calculate. In less than a year and a half, you can pay back that money in the revenue that you generate.”
