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How Canada is quietly retooling its auto industry

ROB BOSTELAAR, Automotive News Canada
December 20, 2019

Factory closures and job cuts get the headlines, but technology is driving an evolution of Canada’s auto sector as employers compete for highly skilled workers to support expanding research-and-development efforts into the car of the future.

“We are interviewing every day,” said Sara LeBlanc, director of General Motors’ three Canadian tech centres, which routinely have 30-plus open positions.

General Motors needs specialists in active-safety and driver-assist technology. Ford is looking for software developers for its “rapidly growing” vehicle-analytics framework.

Apple, not a company associated with the auto industry, seeks software engineers with “strong problem-solving and debugging skills” for its secretive work on self-driving systems.

The Detroit Three are the most visible players in the tech shift, even if their r&d hiring pales next to production-line layoffs as vehicle output in Canada continues to fall.

GM Canada has hired about 700 of a planned 1,000 tech specialists, mainly for its new Markham Technical Centre near Toronto that develops infotainment and autonomous-driving systems. Fifty kilometres east, Oshawa Assembly, once a 22,000-worker, multiline complex, will employ just 300 when it becomes a parts plant in 2020.

While Ford has announced it will cut 450 workers at its Oakville, Ont., assembly plant, 40 kilometres southwest of Toronto, its Connectivity and Innovation Centre in Ottawa has 500 tech employees, with more hiring expected. Fiat Chrysler Automobiles which plans to end the third shift at its Windsor, Ont., minivan plant — affecting 1,500 workers — employs 180 at its Automotive Research and Development Centre in the city.

Smaller tech firms that have entered the transportation space are also playing key roles in the auto sector’s only growth area.

Like Canada’s tech-heavy universities, these companies and the public and private networks that support them have caught the attention of automakers seeking talent and ideas.

“In Toronto, there’s an amazing ecosystem where you have a lot of start-ups and incubators and accelerators. They also work with us to bring a lot of the advancements that we’re developing,” LeBlanc told Automotive News Canada.

NEW PLAYERS

The Ontario government counts more than 200 companies in the province working on connected and self-driving vehicle technologies. How many jobs this represents, however, is harder to pin down.

Apple, for example, won’t comment on the size of its Kanata, Ont., office around the corner from automtive software powerhouse BlackBerry QNX, which also doesn’t disclose its employee count.

The growing high-tech automotive sector is generating new players in the supply chain, said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association (APMA).

“New technology providers are waking up to automotive and joining the space. Over the last five years we started to see some real interest from pure technology players, curious about automotive joining the APMA.”

Currently, out of about 300 APMA members, 60 are high-tech players “who are in or interested in the automotive space,” Volpe said.

That number is expected to grow along with the content level of high-tech components in vehicles, he said.

“Now with our expanded Stratford [autonomous-vehicle] demonstration zone [and] our forays into things like cybersecurity, we’re getting players you would think had nothing to do with vehicles but have everything to do with mobility and smart cities.” Stratford is 150 kilometres west of Toronto.

For instance, the leadership role of the TorontoWaterloo corridor, which includes Kitchener, in artificial intelligence brought ride-hailing company Uber to Ontario to work with the University of Toronto’s Raquel Urtasun on self-driving cars.

HIGH-TECH CLUSTER

Add a rich university and research community as well as the emergence of one of the largest IT clusters outside California’s Silicon Valley, and Canada is able to punch above its weight.

Another factor is technology itself, in the form of improved communications that loosened the head office/laboratory bonds. For FCA, the key was a fibre-optic cable across the Detroit River.

“Through that use of advanced technology,” said industry analyst Dennis DesRosiers, “they can touch and feel what’s going on in the Chrysler r&d centre in Windsor and other spots around the world.”

In September, FCA showed off the centre’s new nine-direction driving simulator that will play a central role in developing advanced driver-assistance systems. The $10-million lab is the most highly developed system of its kind in North America, officials said.

GM’s 20,000-employee engineering centre in Warren, Mich., dwarfs Markham and its staff of hundreds, but it’s the automaker’s largest research hub outside the United States.

At Markham, engineers and software writers finetune infotainment and safety systems and controls for the self-driving cars, the technology upon which GM and its rivals stake their future.

Ford entrusted its Ottawa office, a former BlackBerry r&d centre, with the automaker’s first in-house update of its Sync communications and entertainment system.

Zoltan Racz, the chief engineer, said the national capital’s “critical mass” in communications technology provides a deep pool of candidates for the centre.

Even if the tech shift is difficult to measure, DesRosiers said the transition is crucial. “We will not have an auto industry if we don’t continue to move up the intellectual curve.”

MANUFACTURING CRITICAL

But a February study published by the Canadian Centre for Policy Alternatives warned that proximity to traditional manufacturing is key to the growth of r&d.

GM’s LeBlanc, however, said there are more steps between lab and assembly line as the industry becomes more complex.

She pointed to the autonomous test circuit slated for Oshawa where made-in-Canada software can be quickly validated on pre-production vehicles.

“In my mind that’s a bigger enabler [than proximity to plants] to development,” she said.

At Ford Canada, CEO Dean Stoneley said the automaker is looking to expand its r&d footprint while maintaining its manufacturing centres.

“The two aren’t related in the sense one grows and the other shrinks,” he said. “They’re different, but equally important parts of our business.

“What they [r&d centres] are doing is setting up this connected-car ecosystem … and we’re looking to grow that.”

KEY CANADIAN RESEARCH AREAS:

Artificial intelligence and cybersecurity are key areas of automotive-related research at schools and companies along the 100-kilometre corridor between Toronto to Waterloo, Ont. Cybersecurity is a mainstay for Ottawa-based BlackBerry QNX as well as the Canadian Institute for Cybersecurity at the University of New Brunswick.

But Canada’s auto-technology innovations go beyond AI and protection from hackers:

FUEL CELLS: With the opening of Canada’s first public hydrogen refueling station in Vancouver, and the arrival of the Toyota Mirai for fleet sales, progress for fuel cell vehicles is slow but noteworthy. Decades of research by Ballard Power Systems, supported by British Columbia universities, have put Vancouver in the forefront of fuel cell development. Mississauga, Ont.-based Hydrogenics, recently acquired by Cummins Inc., is another industry leader.

LIGHTWEIGHTING: The National Research Council and McMaster University in Hamilton, Ont., led what has been called a significant Canadian contribution in the search for new materials and manufacturing processes to reduce weight in ever-more-complex vehicles.

BATTERIES: Many of today’s lithium-ion batteries rely on technology developed by Hydro-Quebec, which invests licensing fees from its 800 patents into the development of cheaper, more environmentally friendly batteries. Also at work on safer, more efficient li-ion cells is a team at Dalhousie University in Halifax headed by Jeff Dahn, a world leader in battery research. In 2016, Tesla Motors began a five-year partnership with Dahn that it hopes will lead to longer-lasting batteries and an acceleration of its goal of building cheaper, mass-market electric cars.

LIDAR: Light detection and ranging technology is a valuable adjunct to radar and cameras in self-driving cars. Two Quebec City rivals, LeddarTech and Phantom Intelligence, are high-profile players in an industry racing to supply automakers with affordable lidar sensors.

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