January 27, 2020

General Motors’ announcement Monday that it will invest US$3 billion to create its first all-electric production plant in Hamtramck, Mich., has Canadian automotive analysts and officials calling Southwestern Ontario the “sweet spot” for a piece of the industry’s future.

The automaker will spend US$2.2 billion over 18 months refurbishing its Hamtramck plant and another US$800 million for supplier retooling and other projects related to electric trucks.

“The significant thing is GM is betting their electric future on their home turf,” said Flavio Volpe, president of the Automotive Parts Manufacturers Association.

“The vehicles will be assembled there. A lot of the engineering and research will be done in Oshawa and Markham and the future for GM of this type of vehicle technology will between Toronto and Detroit.

“Everybody in between will get a chance to fight to supply them. The only thing better would’ve been if it was in Ontario.”

Volpe said if GM meets the volume expectations of the vehicles in the Hamtramck re-launch, Southwestern Ontario suppliers may pull in up to 30 per cent of the content opportunities that will arise.

GM said the factory, which is located seven kilometres from its headquarters in downtown Detroit, would produce pick up trucks and the Origin autonomous vehicle. Production is expected to begin in late 2021.

“It’s uniqueness is in its targeting the most popular segments of the market — pick up trucks and SUVs,” said Dennis DesRosiers, founder of DesRosiers Automotive Consultants.

“There’s very little electric available in that segment right now. There are no electric pick ups.

“That’s the heart of the market.”

DesRosiers is keen to see if this might be the tipping point for North American consumers who have been reluctant to embrace the electrification movement.

“It’s a positive announcement for climate change for sure,” DesRosiers said.

“It’s a great public relations move even if consumers don’t buy in huge volumes initially.”

DesRosiers said electric vehicles have less content than internal combustion engine cars, but he added Southwestern Ontario’s strength isn’t heavily weighted in power trains.

“The strength of the Canadian industry are moulds, tool and die and bashing metal and there will be opportunity there,” DesRosiers said. “That aspect of the car isn’t going to change because it’s electric.”

Automate Canada chair Shelley Fellows sees significant opportunities for the nation’s automation and advance manufacturers to service both the plant and the supply chain.

“What really excites me is GM calling this its most advance plant technologically,” Fellows said. “They’re building the factory of the future. That’s Industry 4.0 and that’s what our members do.”

Fellows said automation companies account for about $7-billion in the Canadian economy. Forty nine per cent of all Canada’s automation firms are located in Ontario.

“I think this has the potential to be very exciting,” Fellows said.

“Michigan companies are already sourcing our supply chain in southwestern Ontario for what they don’t have as well as the tier ones and OEMs. It’s a big market for us and our colleagues in Automate Canada.”

Fellows said her membership is well positioned to meet GM’s and its supply chain’s needs.

In many cases, the automation, robotics, artificial intelligence and machine learning local firms are producing and using is superior to what’s in OEM plants.

“We have a lot of experience locally supporting and supplying sophisticated electronic vehicles and working around those components,” Fellows said. “We’ve already learned how to design automation for clean assembly operations.”

Laval Tool president Jonathan Azzopardi, who is also a member of the board of directors for the Canadian Association of Mold Makers, said the local supply chain has to embrace technology and prepare to do things differently to take advantage of the opportunities.

“We have to assume more responsibility for producing more completed components to send to OEMs rather than a bunch of parts they assembly,” Azzopardi said.

“GM, Ford, FCA are changing the relationship they want with us. There’s an opportunity to add value in that for us.”

Azzopardi said CAMM has already been talking with the Ontario government on how they can support industry in making the transformation to that new relationship.

“We have a little catching up to do,” Azzopardi said. “We’re not quite at that (Industry 4.0) point yet.”

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