Sheet Metal Stamping Simulation

In a recent analysis of the health of the Canadian auto manufacturing industry a year after the government bailout of General Motors and Chrysler, Dennis DesRosiers, Canada’s leading automotive industry analyst, made a number of insightful observations.He noted that GM and Chrysler appear to be making progress in their efforts to emerge from bankruptcy protection. Ford Motors is gaining market share and the three domestic manufacturers collectively appear to be competing more effectively against some imported brands.

After a painful period of downsizing, the Detroit Three have reduced their production costs and have not been hit by a supplier failure for several months.While there have been several positive developments in the auto sector over the past year, according to DesRosiers, there is one essential missing element: jobs.

Despite the billions spent by governments on both sides of the border keeping GM and Chrysler afloat and subsidizing Ford, based on Statistics Canada data, year-to-date employment in automotive manufacturing in Canada is down by 9,500.Moreover, this is the fifth consecutive year that employment in the auto sector has declined.

On a year-to-date basis, employment is down across all four major subsectors of automotive manufacturing, led by the parts sector (-5,813) and followed by the motor vehicle body and trailer sector (-1,771); the tool, die and mold sector (- 1,430); and the motor vehicle assembly sector (-524).Although the pattern of job losses across all sectors is a source of serious concern, according to DesRosiers, it is particularly troubling that employment in the highly skilled tool, die and mold sector has suffered so much over the past four years.

Compared to the other sub-sectors, employment in this one had been quite stable, and it appears that these skills are likely going to remain in Canada, unlike jobs in the lower skilled sub-sectors, such as vehicle assembly.The bottom line of DesRosier’s analysis is that Canadian politicians should be quite concerned about the steady shrinkage of the automotive sector in general, and the tool, die and mold sub-sector in particular.

Clearly throwing more money at the sector is not a particularly useful remedy for its problems.