The upcoming negotiations between workers and Fiat Chrysler Automotive (FCA) on September 19th is a critical one. On the line are more than 3,000 jobs at the Brampton Assembly Plant, and as many as 10,000 local spin off jobs. The loss of this plant would be a serious blow and heavily impact the city’s already shaky labor market.
In 2014, Chrysler intended to upgrade the outdated paint line with a $1 Billion investment and requested a $700 Million incentive package from the Federal and Provincial governments. Chrysler walked away from the table when the conditions attached to the loan that both levels of government insisted on was too “restrictive.” Fiat Chrysler Automotive CEO, Sergio Marchionne had stated that there would be no announcements on plant improvements, specifically the outdated paint line at the plant, until negotiations were completed.
Since 1999, Canada has seen it’s ranking as an automotive manufacturer slip from 4th to 15th as car makers have invested elsewhere. Plants have been built in the southern U.S which has offered generous manufacturing subsides or Mexico which offers low labor rates. The Canadian Auto industry has seen increased challenges over the years specifically with the highest assembly labor costs of 12 countries.
Ontario has pledged to invest $15 Million to support research and development for small and medium auto parts manufacturers. However, with the rising cost of electricity, labor and Ontario Pension Plan, auto makers are weary about the future. The Federal government also announced that they are investing $19.6 Million in seven Canadian auto parts technology companies. Unfortunately, none of these companies are in Brampton. Both the provincial and federal investments are small compared to what other countries are doing to develop their Automotive sectors.
Despite industry calls for a National Automotive strategy, Federal and Provincial governments have dragged their feet and other countries have taken advantage to actively court automotive manufacturers away from Canada. The Canadian government has ignored all the warning signs and relied on the oil sector to drive the economy. Now that that the oil sector is depressed, the Automotive sector is starting to get more attention. Unfortunately, it might be too late to repair the damage done over the last 15 years. Once a plant moves, its gone forever along with the money spent to train workers. Many of the tool and die workers that Ontario once generated have already moved on to other professions.
Tier 2 & 3 auto suppliers need attention as well. If governments decide to provide incentives to the large manufacturers, restrictions should also be put in place that encourage smaller companies to bid for work. As well, these smaller companies need a more efficient process for claiming SR&ED tax credits, accessing IRAP funding, training incentives, and writing off capital costs more quickly.
These upcoming negotiations will be critical not just for the workers at the Chrysler Plant, but for many other industries that reside in Brampton. Lets hope that both the Federal and Provincial governments can work together and commit seriously to reviving an industry that has taken a beating over the past 15 years.