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Auto investment targeted by Ontario’s new site selection challenge

Greg Layson, Automotive News
November 28, 2019

The Ontario government is launching a U.S.-style initiative designed to attract new auto and parts assembly to the province.

A trio of high-profile cabinet ministers unveiled the Job Site Challenge on Thursday in Woodstock at the Toyota plant, the province’s newest auto factory, which opened in 2008.

The Job Site Challenge, which the provincial government calls a Canadian first, invites municipalities, economic development agencies and industrial property owners to propose mega sites for new investment. The province is looking for large tracts of land between 500 to 1,500 acres that are already zoned, or could be zoned, for heavy industrial use. The sites should be serviced or serviceable by utilities, transportation networks and other support infrastructure.

“The Job Site Challenge is modelled on mega site programs that have helped several U.S. jurisdictions, like New York, Tennessee, Alabama and other states, to attract large-scale investments to build auto or other advanced-manufacturing plants,” the province said in a statement.

Flavio Volpe, president of the Automotive Parts Manufacturers Association, said any competing jurisdiction in the United States and Mexico already comes forward with a mega site when automakers and suppliers are looking to build.

“The challenge is that site selectors who don’t come from Ontario or have no loyalty to the province will say ‘you have an incomplete proposal,’” Volpe said. “And not having one in your proposal means you aren’t in the second round of talks.”

That means manufacturers ultimately choose the United States or Mexico for their plants, he said.

Volpe said automakers and suppliers “aren’t looking for free land.” They are looking for solid proposals, which, he said, should include sound site options.

“Now, we’re doing the homework for the site selector. We’re the real estate agent,” he said of government officials. “This costs no taxpayer money, other than administrative costs to get the program running.”

Municipalities and developers will be the ones offering up the insight and location suggestions.

Potential mega sites will be evaluated based on 13 criteria. An internationally recognized site selector will endorse and validate sites for inclusion in the inventory of certified mega sites. Ontario and the site selector will then lead a marketing campaign to showcase these selected sites to international and domestic investors. The first shovel-ready sites are expected to be made available to investors in fall 2020.

But will it work?

“I’ll answer that with a question,” Volpe said. “Is there any way it will work without it?”

Volpe said there are several auto investments afoot.

“But I’m not sure of the stage of maturity of those plans,” he said.

There are several brownfield sites across the province, which has been shedding auto manufacturing jobs for a decade. But Volpe said the new United States-Mexico-Canada Agreement should level the playing field and make Ontario more attractive.

“With the dynamics of the USMCA, Ontario and the U.S. are looking more attractive than Mexico. Investments have been stalled or cancelled in Mexico,” he said.

Volpe said Ontario has several qualified sites between Windsor and Toronto, including Chatham and St. Thomas.

“If you’re a community between Windsor and Toronto, and you land an auto plant, you’re landing an MLB franchise,” he said. “It’s a $2-billion local investment and $10 billion in supplier purchases every year.

“Everyone has a chance here.”

Canadian Vehicle Manufacturers’ Association President Mark Nantais, whose association represents the Detroit Three in Canada, wasn’t immediately available for comment. Neither was David Adams, who heads the Global Automakers of Canada, which represents the interests of most of the other automakers in Canada.

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