Trudeau lifts spirits of Brampton’s beleaguered auto sector workers
Ontario's auto sector directly employs over 125,000 workers, with an annual payroll in the $8-billion range, making it one of the bedrocks of our weakening manufacturing sector.
In Brampton, the giant Fiat Chrysler Automobiles (FCA) plant on Williams Parkway has over 3,500 workers and is one of the city’s biggest employers.
Ontario hosts the Canadian headquarters and biggest manufacturing plants for each of the “Big Three” as well as many Japanese and European car makers. The province is also the sum of its considerable auto parts industry.
Those tentacles reach deep into communities like Brampton. According to the latest stats from the Auto Parts Manufacturers' Association (APMA) there are nearly 900 such firms across Canada, and 64 percent are located in Ontario. They include ABC Technologies’ group product development plant on Orenda Road, which employs hundreds.
Prime Minister Justin Trudeau talks to workers on the factory floor at Brampton's ABC Technologies on Thursday
If you have ever owned a car, ABC might have made the light-weight plastics used for air-induction systems, the containers under the hood that hold all the fluids and the interior and exterior moldings and panels that shaped your vehicle.
At the company’s Brampton plant on Thursday afternoon Prime Minister Justin Trudeau put out his best sales face and made his final pitch on the new NAFTA agreement, known as the United States-Mexico-Canada Agreement (USMCA).
He didn’t frame it as another life-line to the industry, but there’s little doubt the deal will bring much needed stability to a tumultuous sector and ease the anxiety of workers, much like the ones who gathered this week to clap and shout “Trudeau-Trudeau-Trudeau” as the PM greeted them on his tour.
After talking to the ABC employees, he fielded a number of questions from the national media about the government’s response to the coronavirus, in the face of widespread hysteria driven by the same media, and then returned to the reason he was there: NAFTA 2.0, or more correctly, the USMCA.
Before Trudeau talked to the press, he wanted to identify and sing the praises of his wingman during the visit, Brampton Centre MP Ramesh Sangha. Before he rode the Trudeau wave to victory in 2015, and won re-election last year, he was a practicing lawyer. More tellingly, after he first moved to Canada from India 25 years ago and moved on to the University of Windsor to upgrade his law skills and join the Canadian bar, he worked on the line at ABC.
Trudeau with Brampton Centre MP Ramesh Sangha talks with ABC Technologies' staff in the cafeteria Thursday
Trudeau said Sangha is the story of Canada – “people working hard, people coming and building a better community and making a better future.”
The PM said ratification of the USMCA will mean better and more secure jobs – not just here but right across the country, whether in the auto parts sector or manufacturing in general. “Access to the North American market has been secured for generations to come,” he said. “We know that it was a time of stress for many families. We were able to secure that future by working together [with our partners].”
U.S. President Donald Trump had used threats and actions in 2018 to hold the NAFTA hostage, imposing crippling tariffs on Canadian steel (25 percent) and aluminum (10 percent), which left the industry here (which is responsible for 16 percent of all steel used in America) bewildered.
He also announced sweeping moves to curtail auto imports, including tariffs, that if implemented would have wrought widespread damage within the industry here.
Workers inside Brampton’s Fiat-Chrysler plant were already on edge after factory closings across the U.S. and Canada where outdated, gas guzzling cars were being made. New plants in Mexico can make the vehicles of the future at a lower cost using cheaper labour.
But while the new deal has allayed much of the concern, for now, Brampton workers at the huge facility where Fiat-Chrysler makes two muscle cars in the sedan class, the Dodge Charger and Challenger, might still be concerned about the future. The trend of closing factories where these types of poor-selling vehicles are made, will likely continue. Car sales overall in North America are slumping. Last year in Canada, 1.92 million cars and light trucks were sold, a six percent decline from 2017 when 2.04 million were sold.
Sales of the Challenger and Charger have been much worse. Last year 60,997 Challengers were sold in the U.S., the major market for muscle cars, compared to 66,716 in 2018, a nine percent drop. The Charger has seen recent gains, but compared to the peak years, sales are still way off. Last year, 96,935 Chargers were sold in the U.S. compared to 119, 289 in 2007, a 19 percent decline in a little more than a decade.
So even with the new USMCA coming into effect, with strict protections for the auto industry across Canada, Brampton’s sector, which employs tens of thousands of workers directly and indirectly, faces a clear reality: innovate or die.
The deal still needs ratification in parliament, and Trudeau wants to see it quickly become law, so his government can give workers “the peace of mind they need.”
As of the 2016 census, 91,205 Brampton workers out of a total of 310,435 (the number of employed residents living in the city) had jobs in manufacturing or industries tied to manufacturing.
According to Brampton Board of Trade figures from 2018, more than 400 local companies exported to the U.S. with 23,433 workers employed by those businesses and a total annual payroll of more than $1 billion.
ABC Technologies covers every facet of the plastics processing technologies, systems and components for the global automotive industry, fluid management, HVAC distribution systems, flexible products, interior and exterior systems and air induction systems. It provides comprehensive support and services, from advanced research and development to overall project management. The plant was dressed up and temporarily shut down during Trudeau’s afternoon visit, and hundreds of employees, sporting grey tops with ABC emblazoned on their chest, were seated in the cafeteria while others stood in a semi-circle at the centre of the shop floor as they greeted the PM.
It was the first-ever visit to the plant by Canada’s head of state, said a Trudeau assistant.
The visit was flawlessly choreographed, moving the PM from cafeteria to the shop floor to a short stint with the media and a late-afternoon sit-down with executives from the Automotive Parts Manufacturers’ Association, including its president, Flavio Volpe.
Prime Minister Justin Trudeau talks with Flavio Volpe, sitting opposite, in Brampton Thursday
Before the Trudeau visit with the industry group, he told the media that the USMCA means more work and more security for its member firms and their employees. “We could not have got a better deal,” he said.
The new trilateral trade agreement has re-established order after the initial NAFTA plan was adopted 26 years ago. It had fallen into free-market irrelevancy, once Donald Trump and his America-First team took the levers of power, threatening tariffs and other isolating measures meant to curtail cross-border business, unless it favoured the U.S..
His distaste for NAFTA (“worst trade deal ever”) led to an endless stream of tweets criticizing the deal, and promising a new one for his zealous followers.
The delicate dance between three countries and industry stakeholders was made more difficult by the great disruptor. Trump was at his bellicose best when he promised “the ruination” of his neighbour to the north by imposing tariffs on Canadian-made cars. The fate of a new NAFTA looked very much in the balance, and the media dubbed the trade negotiations “Carmageddon”.
The new deal features modernized rules governing the auto sector, and guarantees that “every car made in the North American region is going to have 25 percent more content in it (made) locally,” Volpe said.
This means billions more in incremental purchases will come from Canadian-based auto parts supply shops.
Volpe said it is “the biggest single boost to the fortunes of the Canadian auto supply sector in our history.” That’s great news to the 100,000 people working in this automotive sub-sector, including those in the Brampton plant.
Volpe admitted the agreement won’t prevent the elimination of the third shift at the Fiat Chrysler minivan factory in Windsor, and he offered no insight into future prospects for the FCA plant in Brampton, where cars that don’t align with modern trends are still being produced.
There’s a high level of anxiety in car manufacturing cities like Windsor, Brampton and Oshawa, where the GM plant closed in December, leaving thousands of local families reeling, still wondering about their future.
The plant on Williams Parkway barely withstood the economic meltdown in 2008. The U.S. government bailouts were assisted by taxpayer funds from the Canadian and Ontario governments, which contributed $13.7-billion (Canadian) to financing that helped the two auto makers go through a quick Chapter 11 bankruptcy protection in the United States. The Canadian contributions saved tens of thousands of jobs in Ontario, including the Chrysler plants in Windsor and Brampton, and GM operations in Oshawa and Ingersoll.
Global car sales were expected to slide by 3.1 million last year, in the steepest drop since the Great Recession – a larger unit drop than in 2008, according to Fitch Ratings, an industry commentator.
Fiat Chrysler Automobiles has already killed the Dodge Dart and Chrysler 200 to focus on more profitable Jeep SUVs and Ram pickups – except in Brampton which, in terms of producing sedans, is very much an outlier.
Ford, the number two U.S. automaker said it now plans to cut $25.5 billion in costs by 2022, up from $14 billion in cuts it announced last fall. It has rid itself of sedans, including the midsize Fusion and full-size Taurus. In October of 2019, it announced it would eliminate 450 jobs at its plant in Oakville by February of this year. Layoff notices were issued in late November as the company ends production of the Ford Flex and Lincoln MKT. Ontario Economic Development Minister Vic Fedeli said the government is “very disappointed” in Ford Motor Company’s decision and the fact more good-paying auto manufacturing jobs will slip away from Ontario.
Factories that aren't making the cars of the future, like the Icona Nucleus, are at risk of being shuttered
Oshawa is still reeling from last year’s news that the historic GM plant was shutting down there, eliminating 2,500 jobs. The plant defined the city, and its presence lasted over 100 years. The “Oshawa factor” is very much in play in all cities featuring auto plants. The Brampton plant is home to second and third-generation workers. It suffered through a bankruptcy-bailout (’08-09), layoffs, and lost shifts (2001, ‘05, ’08), and a production shut down took place in 2018 when one of its suppliers (Lear) went on strike.
NAFTA 2.0, the USMCA, will help ease some stress, but won’t eliminate fears for the future. The effects from plummeting auto sales will ripple right through to the auto parts sector as well.
The USMCA negotiations started, stopped, then started again, and the concern on the shop floor was palpable, said Jaspal Brar, president of Local 1285 at the Brampton FCA plant when he was interviewed by The Pointer last year.
But those worries were replaced by smiles all around at the Brampton parts plant on Thursday. Mexico ratified USMCA in June and the U.S. Congress did the same on January 16. The passage on Parliament Hill has been complicated by the Liberal government’s mere minority win in last fall’s election. Volpe said critics of the new deal had three full years to voice their opposition to it and he is hopeful of a quick passage. He warned: “If you have changes, adjustments, improvements you want to make to the deal, you do not have that luxury.”
After Trudeau responded to numerous questions about the coronavirus, he sprinkled gold dust on the new USMCA plan, and ended his presser with hopes that ratification of the deal will go quickly in the House of Commons.
We want to give workers “the peace of mind they need,” he said, striding away as the plant filled with one last round of applause.
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