As if the federal and Ontario governments didn’t have enough on their plates in the middle of a pandemic, they now must pay close attention to the auto sector.
That much was clear after AutoForecast Solutions — a trusted observer of the automotive industry that, back in 2014, predicted the demise of General Motors’ Oshawa, Ont., plant — said in mid-June that Ford was canceling production of the next-generation Edge crossover at its factory in Oakville, Ont. That would leave the Oakville plant without any production beginning in 2023, putting the future of the factory and the jobs of 4,200 workers in question.
This will be a critical issue this year in negotiations between Ford and Unifor as their four-year labour contract expires in September. Union leaders will look for a vehicle to replace the Edge and keep the factory, Ford’s only assembly plant in Canada, afloat beyond 2023. And they can threaten a strike to get there, should it get to that point.
But the timing could not be worse for the union and the plant’s workers, with negotiations taking place during a pandemic that has strained Ford’s finances and reduced new-vehicle demand in Canada and the United States.
And that’s not to mention that negotiations would follow the efforts of the United Auto Workers, which negotiated product commitments from the companies in 2019, or take place during a U.S. presidential election that could pressure the companies to not invest outside of that country.
That’s where Canada’s federal and provincial governments need to step in. They must be proactive in attempting to keep manufacturing jobs alive in Oakville and to help sustain auto manufacturing as a whole in Canada, which has seen the number of plants in the country dwindle since the turn of the century. They must work with both the automaker and with the union to see what needs to be done to keep auto production rolling and jobs secured.
What any form of government support would look like is unclear. Prime Minister Justin Trudeau’s Liberals have allocated hundreds of millions of dollars to the retooling of other plants, and it would be no surprise to see them dangle financial incentives for retooling to support the production of green vehicles in Oakville.
Ontario Premier Doug Ford has said cutting red tape is one of his major priorities and he could work with the automaker on ways to continue doing that.
But to be clear, Ford Motor Co. does not have to take up any such offer. It was under pressure to consolidate its operations even before the pandemic hit, and that pressure won’t be going away anytime soon. For Oakville — which remains a bit of an outlier in Ford’s North American footprint, away from its core of Midwestern U.S. factories — that could be a bad thing.
Much remains to be seen, but this is certain: The federal and provincial governments must work to convince automakers that Canada remains a viable place to assemble vehicles. Considering all of the plant closures of the past several years, most recently the end of vehicle assembly at GM Oshawa in 2019, it’s not clear that the Detroit automakers are convinced they need to stay in Ontario in the long term.
If the Canadian and Ontario governments want to change that, they need to make a forceful case to stay — and they need to do it now.