Canadian Automotive Industry Research Articles

Leadership Strategies to Closing the Critical Skills Gap: A Review

Skill is defined as the knowledge, competencies, capabilities, education, and traits required to do a task or job allocated to a certain individual. It is common for a lack of needed information to prevent a firm or organization from achieving its goals. Assigned individuals cannot execute the work, resulting in a skill gap. In this context, identifying talent gaps in various areas is critical. Bridging skills gaps requires effective strategy, but most importantly, it depends on a leader who acquires the proper knowledge and skills to navigate change and lead their team in upskilling and reskilling in ways that suit the organization. The principle objective of this paper is to review the skills gaps in the Canadian automotive industry and successful strategies that automotive business leaders use to fill skills gaps in post-pandemic. The primary focus is reviewing the printed and documented material on skills gaps to find successful strategies. The study findings were derived from a comprehensive review of existing literature. The results indicate that there exists a deficit of skills in both the formal and informal sectors, thereby impeding individuals’ ability to secure employment. Results indicate that Canada, a developed nation with an advanced economy, ought to prioritize improving its human capital through professional development courses and programs. It is recommended that educational institutions conduct further research on the skills gaps to align their training curricula with formal and informal labor market requirements.

Automotive industry in Canada: current state, challenges and perspectives

This article contains analysis of the main problems and prospects of Canadian automotive industry development. Due to the disruption of global supply chains caused by the 2020 coronavirus crisis, as well as other macroeconomic and geo-economic shocks of the recent years, the Canadian automotive industry, competing with automakers from other countries in the global market, is experiencing serious difficulties, which led to significant decline in its economic results in recent years. This, in turn, negatively affects specific indicators, including the demand for labor resources in the sector, the volume of tax revenues of the government, the share of national products in the domestic automobile market of the country and so on. Nevertheless, the country has a significant potential for the development of the industry by using both of its own and macro-regional economic resources. In the following years Canada has all options needed to transform its own automotive industry to meet the modern and future needs of the international market.

Shifting patterns in the application of industrial policy

The practice of industrial policy in economically advanced jurisdictions is examined, focusing on the post 2000 period. Building from literature and cases from the Canadian automotive industry, the paper demonstrates how actors engaged in the application of industrial policy in economically advanced, high labour cost jurisdictions have responded to shifting pressures and opportunities. Explanation is provided for how those changes have caused objectives to broaden from a focus on manufacturing to industrial R&D. While vertical industrial policy tools endure, the transition has prompted increased emphasis on horizontal industrial policy instruments. The cases also demonstrate that a shift has occurred from externally-generated projects towards internal, organic forms of development, a change that has elevated the primacy of internal, corporate champions in firm level investment attraction.

Bumper to Bumper: Will the CUSMA Rules of Origin Make America’s Auto Industry Great Again?

In the negotiations for a new NAFTA, the Trump administration targeted the North American auto industry for major change. The Trump administration objected to the NAFTA rules of origin – with which a good must conform to be eligible for NAFTA duty-free treatment – as permitting too much non-NAFTA content in North American automobiles, and was fixated on the US’s significant balance-of-trade deficit with Mexico, most of which is accounted for by trade in automotive goods. For Canada’s auto industry, there is much at stake. In 2017, Canada exported automotive goods to the United States valued at close to $62 billion, and the US market is overwhelmingly the destination for vehicles produced in Canada. Therefore, it is important that the rules of origin with which the Canadian automotive industry must work be transparent and administratively workable. Under the new deal, the Canada-United States-Mexico- Agreement (CUSMA), the rules of origin that will apply to motor vehicles and their parts are considerably more stringent than their NAFTA counterparts. This Commentary analyzes the CUSMA rules of origin for automotive goods, identifies ambiguities and areas of uncertainty, and makes suggestions for clarifications through the adoption of the Uniform Regulations – for which CUSMA fortunately provides – that will provide greater certainty to both businesses and administrators in how to apply the rules. Adapting to the CUSMA rules will require major adjustments in supply chains. This is particularly the case with the substantially higher Regional Value Content (RVC) thresholds required for most automotive goods. While some relief is possible through limited alternative staging alternatives, the staging to the higher RVC thresholds under CUSMA is only three years for passenger vehicles and light trucks, as compared with eight years under NAFTA. Further, the CUSMA rules of origin are needlessly complex. There are multiple categories of parts for different categories of vehicles with varying RVC requirements that depend on the end use of the part. Complexity increases compliance costs, which are burdensome for all producers, but particularly for smaller producers that are less able to afford investment in expensive compliance systems. While the CUSMA rules mostly eliminate NAFTA tracing requirements, the CUSMA text inexplicably retains a form of tracing for several narrow categories of vehicles. The CUSMA rules of origin regime contains two requirements that are unprecedented in such regimes; namely a steel and aluminum purchase requirement and a labour value content requirement. These are performance requirements that are consistent with a managed trade regime (where rules are designed to achieve certain economic outcomes) and not with a free trade regime (which seeks to remove barriers to trade so that economic results are dictated by market forces). Two reports cast doubt on the benefits of the deal for the US. A US International Trade Commission report found, overall, the new rules should lead to a modest increase in employment in the US automotive sector, but the costs of vehicles produced in the United States will increase and production of vehicles there will decline. An International Monetary Fund working paper states quite bluntly that the tighter auto rules of origin will not achieve their desired outcomes by reason of higher costs, increased consumer prices and reduced demand.

Policy Entrepreneurs and FDI Attraction: Canada’s Auto Industry

New perspective is provided on a critical period in the development of the Canadian automotive industry. In the 1980s, five foreign manufacturers built new vehicle assembly operations in Canada, effectively transforming that country’s automotive industry. Drawing from a combination of interviews with key actors and a review of archives, this case study makes several contributions. First, gaps are closed in the economic history of one of Canada’s most important industries. Second, the case demonstrates the capacity of using historical perspective to extend an existing theory to a new area of inquiry. In this case, Multiple Streams Theory is employed to explain the process of inward FDI attraction. This includes a description of the role of policy entrepreneurs and their capacity to create and exploit opportunities. Third, the case demonstrates the continuing relevance of integrating historical perspective to contemporary issues in business, management, and public policy.

What Does the Trans-Pacific Partnership Agreement Portend for the Canadian Automotive Industry?

If ratified, the Trans Pacific Partnership (TPP) agreement will likely have a significant impact on the global production strategies of automotive firms. The rules of origin and required levels of regional content-value for products to receive preferential tariff treatment under the TPP will significantly influence what, where, and how automotive components are produced both within and outside the TPP region. This article assesses the TPP's potential impact on automotive production in Canada. Although there may well be both winners and losers among Canadian automotive suppliers, the overall impact on automotive production and employment in Canada is likely to be negative.

The Restructuring of Canada's Automotive Industry, 2005–2014

The Canadian automotive industry underwent substantial restructuring between 2005 and 2014. This article draws on establishment-level data to examine these changes as they relate to both automotive assembly and automotive parts manufacturing. It also elucidates the limitations of using official government statistics to study the automotive industry. In addition to analyzing changes to the structure and composition of the industry, our data demonstrate that the industry employs far more people than are reported in official government statistics. We conclude that improvements to data collection methods are important for policy-makers to develop effective supports for the automotive industry.

Accounting and Trust in Labour-Management Negotiations: Crisis in the Canadian Automotive Industry

This paper investigates the role of accounting information in the automotive industry restructuring of 2008 and 2009 in Canada. I also consider the impact that trust has on the use of accounting information in the labour-management negotiations both preceding and embedded in the restructuring. In 2008, the crisis in the automotive industry led to government-funded restructurings for two of the top manufacturers in North America, effectively adding the government as a third party to the negotiations. Following a series of negotiations that occurred between AutoCo and UnionA, I document a qualitative study that examines the individual actors’ views and perspectives on the negotiations process, as well as explore the dynamic interaction between accounting inscriptions and trust at the negotiation table. The use of actor network theory highlights the individual actors, their actor-networks, accounting inscriptions and the continuous translation process inherent in negotiations. Accounting inscriptions are shown to play a central role in labour-management negotiations, particularly as a forum for bringing the actor-networks together, and as a mode of persuasion. Furthermore, I explicate the notion of tactical trust, as it emphasizes the assessment, monitoring, adjustment inherent in decisions to trust within dynamic business contexts.

'The flea on the tail of the dog': power in global production networks and the restructuring of Canadian automotive clusters

Recently, studies of industrial clusters and global production networks (GPNs) between large transnational corporations (TNCs) and smaller firms have focused on how power differentials shape, and sometimes undermine cluster innovation and governance. Such studies raise issues of how to conceptualize TNCs power within GPNs and some economic geographers have adopted approaches that seek to integrate the post-structural insights of actor network theory (ANT) with heterodox and Marxian value theory. Based on a case study of the Canadian automotive industry, we engage in a sympathetic critique of this perspective via a realist position that distinguishes between structural and actual power. We argue that differences in structural position derived from financial size matter, although do not necessarily determine actor network relations. Yet, TNC Original Equipment Manufacturers (OEMs) have a tendential actual or ‘power over’ smaller automotive suppliers due to superior financial resources, their strategic position within GPNs and especially their relationship with state accumulation projects designed to capture those segments of GPNs, which offer the greatest potential for the creation and enhancement of value. We show that such projects were critical to the development of the Canadian automotive industry and the Kitchener and Windsor, Ontario automotive clusters. Although large firms were generally favoured by such policies, suppliers and SMEs were able to partially offset power asymmetries through innovation, often by accessing informal local networks in clusters. More recently, however, smaller component firms and the coherence of these clusters are being threatened by neo-liberal Schumpterian Competition State policies that privilege OEMs and larger firms and by the restructuring of automotive GPNs in response to overcapacity and falling profits.

A driving force: an analysis of strategic planning in the Canadian automotive industry

This paper investigated the impact of components and contextual elements of strategic planning on the effectiveness of the strategic planning process. Specifically, the characteristics of planning and the overall effectiveness of planning processes in the automotive industry were studied. A large‐scale survey revealed that certain aspects of these firms’ planning processes were vital for their continued effectiveness. Functional coverage was identified as one of the most important component of strategic planning and provision of sufficient planning resources and the most important contextual element. The practical implications of this research for firms in the automotive industry are discussed.

Power steering the Canadian automotive industry: The 1965 Canada-USA auto pact and political exchange

In the 1965 Canada—USA auto pact the automotive companies were required to maintain specified levels of assembly activity in Canada. This restriction and subsequent events such as the correlation of a shift in employment to Canada and the widening of pay disparities between American and Canadian workers, the concentration of research in the United States despite Canadian fiscal incentives, and the differences in the ‘rescue’ packages offered to Chrysler by the two governments, cannot be explained by conventional economic theory. The paper demonstrates that they can be explained as mutually advantageous accommodations to different evaluations of political outputs reflecting endowments and domestic economic interests.

The Canadian Automotive Industry and Offshore Imports: Can the Auto Pact Help?

The Canadian Automotive Industry and Offshore Imports: Can the Auto Pact Help?

Industrial Reorganization, Capital Restructuring and Locational Change: An Analysis of the Canadian Automobile Industry in the 1960s

There were significant changes in the locational structure of the Canadian automotive industry in the 1960s. It is clear that these changes cannot be fully understood and explained by reference only to changes in the geographical distribution of location factors. The changes were instigated by the reorganization and rationalization of production which occurred in the wake of a major crisis of accumulation which developed in the industry in the late 1950s. The paper outlines a general analytical framework for the analysis of locational change associated with industrial reorganization and restructuring. This framework is then used to understand the changes which occurred in organization and locational structure. The specific forms which these changes took were shaped by the interaction between the new conditions of accumulation brought about through the rationalization and reorganization of production and the existing geographical configuration of factors and conditions of production. In turn, the new spati...

The Bladen Plan for Increased Protection of the Canadian Automotive Industry

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