In Gear - Today's Trucking

providers to tiremakers—have reacted by announcing everything
from production slowdowns to bankruptcies.
Some transport and logistics firms contracted to the Big Three
and their suppliers are looking to diversify in order to avoid sinking
further along with their customers. Others, however, see less
reason to start panicking, preferring to wait for the automakers’
cuts to have their desired effect at helping the companies make
a comeback.
Richmond Hill, Ont.-based automotive market guru Dennis
DesRosiers of DesRosiers Automotive Consultants doesn’t think
the sky is falling on the auto-rich Ontario sector. “Ontario has
been the number-one auto producer in North America for the
past two years and absolutely that’s going to continue over the
next five years,” he says. “We’re picking up plants, while Michigan
is closing plants.
“As for the GM cutbacks, it was ‘Canada-lite,’ you might say.
There were some job cuts and plants closed, but much less than
what you would have anticipated. Twenty percent of GM is in
Canada and you would have expected 5,000 to 6,000 job cuts, but
it’s actually more in the 3,000 range.”
Besides, says DesRosiers, the general influence the Big Three
have on the total market is softening. “GM, Ford and
We do have some
issues in Ontario, but
the growth in the
new domestics
[Toyota, Honda] far
outweigh any
declines in GM,
Ford,DaimlerChrysler.
[DaimlerChrysler’s] share of
the North American auto sector
has declined for eight consecutive
years and will continue
declining for at least
another three to five years,” he
continues. “So they’re quickly
getting a smaller piece of the
pie. However, the pie itself
is growing.”
And it’s the Japanese with
the appetite to swallow the
extra slices of market share. In fact, DesRosiers predicts whatever
is spilled by the U.S. vehicle manufacturers is quickly offset by
expanding Japanese firms like Toyota and Honda, which are
nestling themselves further on the Toronto-Windsor, Ont. Hwy. 401
corridor. Toyota is ramping up production and is slated to open a
new Woodstock, Ont. assembly plant in 2008. Honda is rumored to
be considering a third facility to complement its two Alliston, Ont.
plants. And Japanese medium-duty truck manufacturer Hino
Motors is also seriously scouting plant locations in the region.
“We do have some issues in Ontario,” says DesRosiers, “but the
growth in the new domestics [Toyota, Honda] far outweigh any
declines in GM, Ford, DaimlerChrysler.”
Gerry Fedchun, president of the Automotive Parts
Manufacturing Association, agrees that things look better than
what’s being reported in the media. Although he was slightly less
bullish than DesRosiers in committing to a five-year success forecast,
he did reiterate that the core sector is remaining upright on
the back of Japanese companies.
“Certainly for the next couple of years at least, the total
volumes in Ontario are relatively stable,” he says. “But who’s making
what is changing relatively dramatically, and so there will be
dramatic realignment where deliveries are going and to who.”
The Big Three
AMBASSADOR STILL KING
CONGESTION RELIEF UNLIKELY FOR NOW
About one-third of the traffic that crosses the
Ambassador Bridge at the Windsor, Ont.-Detroit border
is said to be directly related to the auto sector. So, with
the Big Three U.S. automakers scaling back production and
some of their suppliers taking a beating, will there be some
relief in congestion at the world’s busiest trade gateway?
A little, says Dan Stamper, president of the bridge’s parent
company Detroit International Bridge Co. Stamper told local
media last month that recent Ford and GM cuts and related
slowdowns in component and raw-material movement could
translate to at least a five-percent drop in bridge traffic.
So, does that mean all the fuss being made to expand crossing
capacity at the beleaguered border is overstated? In fact, if
the Big Three continue to lose market share, is a second bridge
which has been promised for so long even needed?
Absolutely, says automotive sector expert Dennis
DesRosiers. Although Ontario’s automotive market is evolving
to focus more on east-west traffic, and even if the closures
related to the Big Three are quietly providing a natural solution
to Windsor’s border woes, DesRosiers thinks those problems
won’t iron themselves out for at least another decade or two.
“It’s just an impossible situation down there right now.”
Automotive Parts Manufacturing Association President
Gerry Fedchun thinks the Ambassador will regain that volume,
and then some, as Japanese automakers situated north of the
border continue growing. While it’s true the Japanese companies
have slightly more suppliers positioned closer to home
base, the majority of all parts manufacturers still sit on the
Michigan-Indiana-Kentucky corridor and will continue to look
for more capacity at Michigan crossings, says Fedchun.
“Toyota’s biggest plant is in Kentucky, which is four hours
south of Windsor down I-75. There’s still going to be a whole
cluster of suppliers around that plant,” he says.“In some cases,
for economies of manufacturing, you’d take that production
and ship it to Ontario and vice-versa.”
MARCH 2006 53