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Is Ontario destined to become a relic of the auto industry?

Discussion in 'Canada' started by Ktowntslafan, Nov 3, 2015.

  1. Ktowntslafan

    Ktowntslafan Member

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  2. mknox

    mknox Well-Known Member

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    I am aware of two companies in Cambridge, Ontario who supply parts and services to Tesla Motors, directly related to the Model S. I don't want to call them out in case there are any confidentiality issues, but at least there is some activity here in the province.
     
  3. Ktowntslafan

    Ktowntslafan Member

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    That's a start...long way to go:


    • In 2014, the auto sector contributed over $16 billion to Ontario’s GDP.
     
  4. Ktowntslafan

    Ktowntslafan Member

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    #4 Ktowntslafan, Nov 3, 2015
    Last edited: Nov 3, 2015
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    More subsidies supporting Big Oil courtesy of Ontario/Canadian taxpayers. Can we not direct these funds specifically toward EV development in Ontario? If you believe EV's are the future, does anyone feel like we're backing the wrong horses at the moment?

    If the tipping point to EV is near, Ontario is in trouble. Time to change course...quickly!
     
  5. glenhurst

    glenhurst Member

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    I wonder when those "incentives" (tax breaks, really, I suspect) are expected to show their return. That is, at what point will the $2B given to FCA return more than $2B to the public coffers? If it's more than ten years from now, I'm not sure the money will ever be made back because in ten years I think the car landscape will look significantly different and I'm not convinced that FCA will adapt based on prior behavior.
     
  6. Ktowntslafan

    Ktowntslafan Member

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    Hey...new trajectory! Thanks Justin!

    Liberal Party of Canada

    It’s all about going green over in Justin Trudeau’s camp. While they haven’t yet unveiled a specific automotive or manufacturing policy, the Liberals have their own automotive caucus to focus on the issue and has earmarked “clean” technology as an area of focus for any future Liberal Government.
    “We understand that manufacturing is the number one investor in research and development. We will help manufacturers to modernize and reach new markets,” the Party said in a statement to autoTRADER.ca.
    “As a start, we believe Canada can be the world’s most competitive tax jurisdiction for investments in the research, development, and manufacturing of clean technology. We will consult on ways to enhance the scientific research and experimental development tax credit – in conjunction with other tax measures – to generate more clean technology investment.
    “Moreover, we will invest $100 million more per year in organizations that have been successful at supporting the emergence of clean technology firms in Canada and work in partnership with the private sector to enhance the availability of venture capital for new, clean technology.”
    These commitments are indicative of a Liberal Party focus that moves away from traditional manufacturing and moves towards the new style of automotive market. But, the Liberals have also committed $60 billion in infrastructure funding. They say the New Building Canada Fund will “prioritize investments in roads, bridges, transportation corridors, ports, and border gateways” – this spending on infrastructure is how the Liberals plan to attract more investment into Canada and by extension, the automotive sector.
    The commitment to assist research in clean technology aligns with the APRC’s recognition of current trends in the automotive sector and the ongoing push for cleaner technology and lower vehicle emissions.
    To sum it up, while not committing any funding to support existing manufacturing jobs, the Liberals aim to support manufacturing in the country by fostering the development of new tech.

    Automotive Policies of the Big Three Political Parties | autoTRADER.ca

     
  7. Ktowntslafan

    Ktowntslafan Member

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  8. Breezy

    Breezy Member

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    What support should we give to EVs, specifically? Makes sense to me to be supporting manufacturers with plants already here, which in turn support the many Ontario suppliers who can and do build parts for EVs just as easily as they can for ICEs.
     
  9. mknox

    mknox Well-Known Member

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    The Ontario government is concerned about the loss of all manufacturing jobs and the fact that Ontario is losing automotive jobs in particular to places like Mexico. As much as they may be interested in EVs and advanced technologies, I think they'd be happy to see even traditional ICE manufacturing stay here too. Toyota announced that they were moving Corolla production from Cambridge to Mexico which had a lot of folks worried, but they've recently announced that they will bring RAV4 production (including hybrid models) to the Cambridge plant.
     
  10. Ktowntslafan

    Ktowntslafan Member

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    If EV's are the future, and we all know they are, we should be supporting manufacturers who are investing in that space. What we are doing now is corporate welfare. We are buying jobs with tax dollars, which is ridiculous and unsustainable. So, let's sit down with the five manufacturers above, tell them that we are ready to invest heavily in the future, but no longer in the past. RAV4 hybrid is a good example. But we shouldn't stop there, we need to be talking to Tesla, Apple and all new entrants to the EV space.
     
  11. beeeerock

    beeeerock Active Member

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    And this is essentially because government works on the trailing edge of the curve. If they want to be sustainable, they need to be on the leading edge, investing in what the soothsayers see coming in the future, instead of wondering who turned out the lights. And the fortune tellers don't even have to be that good... anyone can make the leap in thinking to EV's and a necessary move away from a carbon-based economy.

    They should be talking to Tesla and Nissan and anyone with EV aspirations about doing a Nevada-style Giga-factory deal. Heck, even a Mega-factory or Kilo-factory would be a step in the right direction... :wink: With supply next door, re-tooling to build EV's would be more feasible, especially if the labour force is skilled (more skilled than the 2nd and 3rd world at least).
     
  12. Ktowntslafan

    Ktowntslafan Member

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    Amen

    - - - Updated - - -

    I am a big supporter of this idea...ironically, I cannot find anyone in government that agrees with me :confused::

    Why Entrepreneurs Should Go Work for Government - HBS Working Knowledge - Harvard Business School


    - - - Updated - - -

    And something I recently learned about:

    What is a Social Entrepreneur? | Ashoka - Innovators for the Public

    Not a bad thing in government, IMO...quite the opposite.
     
  13. Breezy

    Breezy Member

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    Okay, I can see what you're saying. Investing in the future is obviously what we want to do. But it's a tricky business, because all jurisdictions want auto manufacturing jobs and are willing to make concessions to get them. Giving OEMs an ultimatum like that is unlikely to go well for Ontario. They'll happily move production to Mexico.

    Ontario plants produced 2.4 million vehicles in 2014. Then there is the network of suppliers. Without them the province won't have much revenue to invest in the future.
     
  14. Ktowntslafan

    Ktowntslafan Member

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    Tough love. If OEM's value cheap labour over innovation and Mexico wants to subsidize declining ICE manufacturing, I say let them go. Progressive manufacturers will see value in Ontario's brain power and will invest here and thrive.
     
  15. mknox

    mknox Well-Known Member

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    I can tell you that in some informal conversations I've had with Ministry staffers, this "ultimatum" is not likely to happen. While encouraging the "green economy" is something they definitely want to do, they are not going to throw the baby out with the bath water and take actions that will harm general auto manufacturing (and associated jobs) in Ontario. Yes, Ontario could be an innovation center, but so could a lot of other jurisdictions... many with lower labor, tax and energy costs than we have here in Ontario. (an artifact of cleaning Ontario's electricity systems is that we now have some of the highest rates in North America). There is competition for this kind of thing all over the place.
     
  16. beeeerock

    beeeerock Active Member

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    The problem boils down to not really knowing what the future green world order will look like... where new jobs will exist is unclear. What IS clear, is that many of the jobs we know today will disappear or be reduced substantially in number.

    So the question for government should be: Are we better off dragging our feet or getting out ahead of the changes?

    Watching the news last night, there was an item about energy production and consumption in Canada. Obviously, non-green energy production is a BIG piece of our economy. It won't be there forever though, whether we want to accept that or not. So the first step in the process is admitting we have a problem... :cool: Alberta is certainly about to come to terms with that realization now that the oil sands are not overly profitable.

    There needs to be a well-considered economic PLAN to follow as we transition away from fossil fuels and on to green sources. If our strategy is simply to REACT to changes, or follow others, we're really screwed. Both PLANning and REACTing represent significant economic upheaval - I'm not burying my head in the sand on that. But having a real plan in place is going to make the ride smoother. Not smooth... just smooth-ER.
     
  17. mknox

    mknox Well-Known Member

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    While I don't disagree with the sentiment, that comes with HUGE risk. What if you bet on the wrong horse? What if it turns out some other jurisdiction is better suited or more competitive? Governments need revenues to run all of the programs they run for us, and if a policy decision ends up chasing out a big piece of the province's economy, jobs will be lost and gov't revenues will fall. Not sure what the answer is, but until it becomes clear, I thing we have to keep diversified.
     
  18. Ktowntslafan

    Ktowntslafan Member

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    We are not diversified at present...that's the whole point of the article.

    So lets create policy that GETS us diversified.

    - - - Updated - - -

    Here's a great interview on the subject:

    Ontarios Auto Industry: End of An Era? - YouTube
     
  19. mknox

    mknox Well-Known Member

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    Fair enough. I was thinking of your earlier "tough love" comment about letting manufacturers who don't want to play ball go. An "all or nothing" approach may leave us with them all gone and potentially no industry to fill the void.
     

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