Windsor Star 2015 – Windsor could get piece of Linamar’s $500M expansion plans

As published in The Windsor Star, based in part on presentation by Entrada’s John Paul McDaris at APMA Windsor regional meeting

Windsor may be a beneficiary of Linamar Corporation’s plan to invest $500 million and create 1,200 new jobs at its Ontario operations, a senior company official said Thursday.

“It’s always something under consideration as we’re looking at the expansion that we’ve announced for southwestern Ontario,” said Ken McDougall, group president of machining and assembly operations in Canada and Mexico.

>>> How did Mexico fare in our recent survey report on competitive manufacturing locations?

“Windsor is a potential spot where we would add some of that development and growth here in the city.”

The Guelph auto parts maker currently runs one Windsor facility, employing about 200 people.

It’s the company’s sole standalone plant, said McDougall, noting that in other jurisdictions, Linamar has clusters of plants.

One factor in Windsor’s favour is its relatively higher unemployment rate compared to such cities as Cambridge and Guelph, said McDougall. “When we talk about a 5.1 per cent rate in Guelph versus a rate of over nine per cent in Windsor, there’s untapped potential here.”

Like other manufacturers, Linamar is having a tough time finding skilled trades workers, and the challenge is far more pronounced in areas with high employment rates, he said.

McDougall was among a roster of speakers at a one-day conference, organized by the Automotive Parts Manufacturers’ Association, that focused on Mexico’s growing auto industry.

Lower costs remain a “big factor” in Mexico’s favour when it comes to automotive investment, McDougall said.

“It’s not the only reason, but labour is a big consideration,” he said.

In Mexico, the average manufacturing labour rate is about $6.50 an hour compared to $27.35 in Ontario, said McDougall.

“You see more and more migration of auto plants, whether it’s powertrain or assembly plants in Mexico, and they’re looking for local content,” said McDougall.

Linamar has four plants in Mexico, employing about 3,900 workers. In Ontario, Linamar has 23 plants, employing about 8,800 workers.

“We’re growing everywhere,” he said, adding that the company plans to invest more in Mexico as well.

“They’re going to build a crap load of vehicles and they want us to supply them from Mexico.”

Between 2000 and 2014, Mexico attracted between US$31 billion and $34 billion in automotive investment, according to John Paul McDaris, project manager at Entrada Group, a U.S.-based firm which helps manufacturers interested in establishing operations in Mexico.

Those figure don’t include recent investment announcements by Kia and Toyota, said McDaris.

Mexico also surpassed Ontario last year in vehicle assembly production and is expected to continue increasing its auto manufacturing footprint.

Canada’s share of North American production of cars and light trucks fell to 14.1 per cent in 2014 from more than 17 per cent in 2009, according to figures compiled by auto industry analyst Dennis DesRosiers.

Mexico, with 18.9 per cent of production, cranked out 3.2 million light vehicles last year compared to Canada’s total of  2.382 million units, according to auto analyst Dennis DesRosiers.

Source: The Windsor Star

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