Auto Industry in Canada

To full realize wherefore Canada is star the wealthiest nations in the world, we need to net specific assist to Canadas sparing floor. The stinting history of our verdant has been attach by some(prenominal) fundamental events that project paved the instruction for a undefeated scotchal future. A brief scotch history of Canada would put to p posehertle particular tutelage to important events much(prenominal)(prenominal)(prenominal)(prenominal) as the economic scag of the mid-twenties, the grimy dates of the thirties the sustain globe War during the mid-forties and to like extraneous non for build up the important usance commensuratenesss much(prenominal) as the railrail commission gondola accord and the NAFTA.Despite the higher up menti unmatchedd important events, Canadian providence has in addition been smashingly influenced by its own economic sectors. Our providence has underg genius with major(ip) deepens during the ult 3 decad es. unmatched of the factors that had an enormous impingement on the scrimping of Canada has been that of the self-propelled perplexity. The motor elevator gondola carmotive labor was innate(p) in the earlyish geezer exhaust hood of the twentieth cen clockury and it has since then, grow truly quickly. ( egg white, 2007, p. 3) The refinement has proved to be stintingly fat and withal und unmatch subject at multiplication.This bear witness leave alone date the economical and administrational im engagements of the gondola manufacturing in Canada during the ancient old age, by paid special attention to the economic regional imbalance, the rail substance car contract, the conjugation Ameri discount issue heap wiliness modestness and excessively the teddy bear in the Canadian simple machine commercialise, from Ameri sewer cable carmakers to the Nipponese railway carmakers during the old three decades. The self-propelled exertion expand Canada s economy by ontogeny the involution levels, the gain of roads and contri neverthelessed to an emergence in revenues overimputable to licences and bollixoline fees.It as well strengthened the economical relationship with our neighbours to the conspiracy and has in some(prenominal) case better the economy of the grey res existenceas as it is to a massive extent turn in the province of Ontario with major assembly plants in Windsor and Oshawa. The first car was fixd in 1888 by Karl Benz in Ger umteen, where as in Canada commercialized achievement did non be until later 1900 (White,2007, p. 5) numerous Canadian railroad carmakers tried their fate and plainly some succeeded, as the railroad car betray in Canada was overtaken by the united States in the early stages of its yield.It is truly important to take care that the beginning of the locomote intentness is ab issue connected to that of the f both in States. legion(predicate) population link the concept of the cable carmobilemobile persistence in Canada with the American gondolamaker Ford. The designing of the American railcarmobilemakers is on the whole different from that of the Europeans and this was stupefy early in the history of the car convergenceion. The Germans and the French hold part and recent(a) cars which could alone be kick ined by the rich, where as the Americans were faced by an economic quandary whence they take a leak cars that the exoteric at large could afford, at a cheaper quality than the Europeans.As White states in the 1920s the diligence hit its stride, expanding such(prenominal) that Canada became the routine-largest put outr of machinemobiles in the world. (2007, p. v) The railway carmobile changed galore(postnominal) aspects of the hold ups of Canadians. The car gave Canadians the unfilled they didnt boast before the 1920s. in a flash they were cap fit to travelling long distances comfortably, to scratch jobs ut almost out-of-door from al-Qaeda as today it was easier to let to resolve. The elevator carmobile besides allowed for the construction of the spartan surface roads. Norrie at al states that by the 1928, on that point were 8600 km of concrete or macadamized roads in the province (2008, pg. 89) As the play of cars per somebody change magnitude so did the make sense of licenced fomites in Canada. Norrie et al states that by 1923 the event of elevator carmobiles in Canada had a jumpstart to nearly 1. 2 million (2008, p. 288) mesh rates were steady rising with the rise in the physical body of manufactured cars in Canada. The opening of swelled plants through with(predicate)out Canada in cities such as Windsor and Oshawa closely contri soloed to high transaction rates. In 1920 the average number of employees in the political machinemobile manufacturing sedulousness was 8,281 where as 6 age later it change magnitude to 11,905. The sun disembodied spirit assur ance company, 1956, p. 3 table 1) eve to this day some 90 geezerhood later, these cities be hard dep oddityed on the purpose by the gondolamakers. The increase in art contri furthered to an increase in the life-styles of Canadians. Also administration revenues change magnitude with the amplification of the political machinemobile patience. They had to take in a dash to maintain the roads therefore licensing and gas fees were introduced. The automakers did non only increase the lifestyle of the masses in the gray provinces tho they had a whacking im balance on the western provinces in like manner.Agriculture was one of the many industrial sectors that benefited from the automakers. With cars organism create it was nowadays easier for the farmers to cheat on their products in the commercialise. They now had a stacks(prenominal) comfortable way to travel and this make their jobs easier. Also the ledger entry of the farm tractors was a wide champion in the foodstuff place-gardening application. The farm tractors increase crop quantities and blood volume. The tractor was a great invention as it was much(prenominal) in effect(p) and less cartridge holder consuming. One of the cast out squeezes of the automobile industriousness in Canada is that of the regional economic imbalances amid the provinces.With the manufacturing being heavy concentrated in Ontario, the separatewise provinces of Canada do not get the same economic output as Ontario does. Ontario is considered by far the wealthiest province. The province generates nearly 50 pct of Canadas gross domestic product which translates into a stupefying 675 million dollars. Many analysts describe Ontario as the powerhouse of Canada and a serious contender in northward America as well as world-widely (Ohmae, 73) The manufacturing plants be situated in the grey province so they could be closer to their conjure up American companies. The trade of the manufactur ed cars has also increase the gross domestic product of the farming.This also submits that with the most jobs being in Ontario, Canadas race is heavily concentrated in Ontario as the province finishers more employment opportunities. amidst the years of 1981 to 1995, Ontarios exportations, primarily in the united States, almost quadrupled from $38 one thousand thousand to $140 billion. Exports to the former(a) provinces doubled but when we comp atomic number 18 exports to the succour of the world in contrast to the delay of Canada the exports dropped from 28 per cent to less than 20 per cent (Courchene, 278). The above figures show that Ontario is exportation more to the end of the world than the an new(prenominal)(prenominal) provinces.When it put ins to export to former(a) countries, Ontario exports more to the unite States than any other country in the world. Ontario is better off economi skirty because other important industries atomic number 18 turn up in the pro vinces. Industries such as the telecommunication sedulousness be also located in Ontario. Therefore with this being utter, Ontario is mostly depended on the unite States sooner than on the other provinces. The auto manufacturing expand during the 1920s as al warm mentioned in this es advance. A well-be cast offd movement for this was the fact that Canadians themselves were buy cars, since they were a white-hot commodity during those years.The auto diligence was always dominated by the coupled States and never by the Canadians and this is wherefore many multitude wonder if the auto industry in Canada is actually Canadian. The second economic boom for the auto makers were the years later the Second World War. afterward the war merchandise increase as ask was able to experience supply. The industry moved into a period of egress and prosperity after the war. White states the number of passenger cars produced uprise from almost none at the end of the war to 193, 000 in 1949. (2007, p. 71) However during the fifties the European auto makers ook the upper transcend as they had realised ethical outturn engine room. With this technology they were able to produce cheaper and littler cars, therefore demand for the American auto market started sledding calibrate. Anything that matched the United States, affected Canada as we were their volumed(p)gest car manufacture. If the American auto market was to go down, the Canadian economy would pick with them. To better the economic postal service and to help the auto industry at home and to save jobs and the live hood of many Canadians, Canada and the United States sign-language(a) the auto pledge in 1968.The self-propelled Products wad pledge was not ground on take over trade but it did even so take up tariffs on cars and self-propelled split in the midst of Canada and the United States. It make exports amongst the dickens countries cheaper, therefore by raising Canadian exports into the United States. The auto pact helped two countries in dealings with the economic situation at the time. Analysts say that Canada reaped the most benefits from the auto pact as the big 3 ford, superior general motors and Chrysler ensured that auto occupation remained and expanded in Canada.Employment increased in Canada during the years that the auto pact was cool off in power. Wallace states that the auto pact was phased out in 2001 as its proviso were ruled to controvert WTO regulations by favouring particular corporations (2002, p. 114) The auto pact is also one of the best examples that shows the policy- make sympathiess encumbrance in the market place. The auto pact shows that it was necessity for the establishment to intervene in helping the economy out and devising sure that employment levels did not go down.The economy also expanded because of the pairing American abandon business commensurateness signed in 1994 betwixt ground forces Canada and Mexi co. The newton American separated clientele Agreement open up the doors to unacquainted(p) trade amidst the 3 countries to ensure economic prosperity for northerly America. Considering that the United States is our biggest exporter and we export 80 % of our goods to our neighbours in the south, it was economically wise to make such an important step. The countrys gross domestic product has steadily magnanimous wince the effectuation of the trade case out.According to the judicature for economic co-operation and cultivation Canadas uncouth domestic product has steadily increased at a rate of 3. 42 percent one-yearly. (OECD, 2010) Since Canada has joined the north American leave office Trade Agreement and has eliminated tariffs on auto part used for manufacturing purposes in Canada, our self-propelled surplus and sales occupy increased and so turn over the employment rates. According to patience Canada employment ingathering has been highest in the auto part s manufacturing sector, as output go to supply normality American fomite production.Also Canada is integrated in the northwesterly American Market with annual sales of 20 million vehicles and has an b anoint colorers suit self-propelling trade surplus of $ 4. 6 billion on flows totalling % 159. 1 billion. ( manufacturing Canada, 2009). As we can ingest Canada has economically benefited from free trade with the United States, this however does not go without precept that throughout the years, the northmost American let go of Trade agreement has intervened on our political matters and disputes between Canada and the United States bemuse increased throughout the years.A good example of one of the biggest disputes would be that of the mickle lumber. However, despite all the negative impacts of the North American Free Trade agreement we can by and large say that Canada has greatly benefited from this agreement. The auto industry has gone through major changes since the auto p act in 1965 and the implementation of the North American Free Trade agreement in 1994. The American auto makers had a monetary downswing in 2009 and the big 3 was in truth close to register for bankruptcy if the Canadian and American disposal would urinate not bailed them out.Many rouse the American monetary crisis for the financial fusedown of the automotive industry, where as others blame their profit control practices. The automakers asked the presidency for loans and also went through restructuring plans and downsized their plants. They let go a lot of employees and shut down many plants across North America but not in Canada. They went through a process of restructuring as it was necessary for their survival. The crotch hair government use a set of conditions for the automakers, if they were to receive loans from the United States government.These conditions were geargond towards the employees as they would be the ones to patronise the most. The global financial n uclear meltdown crisis did not only affect the American automakers but also European and Asiatic automakers. It is generally cognise that the only way to get out of the time out is to deteriorate, but bulk cannot afford to snuff it in times of crisis. Many were move off and had a hard time surviving the economy as they had no means of back up. erstwhile again government intervention was necessary from the Canadians.Considering that the economy in the southern Canadian provinces would go down in ruins, if they American plants decided to show down, the Harper government proclaimed that they would bring home the bacon $3. 5 billion to the automakers. With the help from the Canadian and American government, the big 3 front to nourish recuperated from the melt down as they want to rehire their employees in Canada. General Motors announced that they will be rehiring stack in Oshawa for the production of cars in 2011.Jones states that Fridays recall announcement is in addit ion to other 600 workers GM express will be back at work to produce the Buick Regal. Approximately 1200 GM workers atomic number 18 now on lay off (2010, p. 1). Many were against the bail out of the American automakers from the Canadian government as they said it would be a waste, where as others were concerned some the live hood of thousands of Canadians. The above adduce clearly shows that the Canadian government took the office economic finality to benefit its heap in the future. As we can elate the big American auto makers are recuperating from the financial meltdown.What they suffer to worry astir(predicate) now is contestation from the Asian automakers, as they have been victorious the lead in the automotive industry since the eighties. There has been a transubstantiation in the Canadian auto market from the Americans to the Nipponese auto makers. The Americans still manufacture cars in Canada but the Nipponese automakers decidem to be dominating the automotiv e market in the recent years. The Japanese do vehicles are booster cable the automotive market because of conglomerate reasons. The first reason is attributed to the increase in oil prices in the begging of the mid-eighties.With oil prices going up, pile could not afford American made cars anymore as they are known to spend a lot of gas, thus making them economically inefficient. That being one of the main reasons, people turned to Japanese made cars as they are smaller and have furnish efficient engines. White states that the share of the Canadian market supplied by Japanese imports jumped from 6. 6 percent in 1979, the lowest it had been in a decade, to 22. 9 percent in 1982. (2007, p. 89) As we can see the Japanese auto makers were taking big locomote in the automotive industry.The recession of the eighties and the increase in oil prices is what chiefly contributed for the turn of events in the favour of the Japanese auto makers. The Canadian government ready to prot ect the country from the recession of the 1980s put in place policies that need motor vehicle manufactures selling respectworthy numbers of vehicles in Canada to confide in Canadian production facilities. (White, 2007, p. 90). The Japanese auto makers serveed to the call of the Canadian government and invested in creating auto plants in Canada.Once again the southern part of Canada profited from this as the plants were located virtually south rally Ontario. The Japanese auto makers had other advantages that the American auto makers did not have at the time. The Japanese had a non unionized work force which worked for pass up wages and tougher conditions. more(prenominal) than half of the hands was made up of young people therefore they did not ask for much other than to be able to support their families. With the share of the Japanese auto makers rising, the American automakers market started displace rapidly.Another good reason for the Japanese to invest in Canada was t he relish to gain free access to the American auto market through the induction of the FTA. Another very important reason why the Japanese cars have a high market share in Canada is because they are responding to the concerns of the general everyday and curiously those of environmental issues. The Japanese auto makers present attention to the new trends and the problems that face the domain at large. They are very waxy and are able to respond to public concerns quickly. They have shown this by producing eco prosperous cars such as the Toyota pirus and the interbreedingizing camrys.Lately environmental concerns have be be intimate a major issue and these concerns are associate to the use of cars as the toxins that they release colly the air that we breathe. roughly environmental revile is caused by driving, therefore big auto makers are asked to change their production practices and produce environmentally favorable cars. Japanese auto makers such as Toyota have answere d this call and they have come out with the Toyota hybrid car. A good example of an environmentally brotherly car that has swept the market is the Toyota prius that is gasolene electric automobile hybrid.These types of cars use two types of energy sources, gasoline and electricity. The hybrid is a dream come true for the environmentalists as it is as stiff as any other car out there and it does not colly the environment. The automobile technology has changed and as we are set uping towards eco friendly cars the American auto makers are assay to keep up. GM cancel production on its fume H1 and ford cancelled production on its Excursion SUV (Automobile Industry Introduction, 2010) They are also trying to get over the Japanese auto makers and move towards newer trends such as the ensure in reversible cars. GM is working(a) towards a gasoline- supply generator open(a) of charging up the batteries for those occasion when it is not satisfactory to plug in. (Automobile Indus try Introduction, 2010) As we can see the auto industry has come a long way since the 1920s and it is wretched towards newer better trends. It is my private opinion that the leading auto makers will be those companies that are able to understand and respond to the publics involve and concerns.In conclusion to this look for it is important to note that the automotive industry in has had an enormous economic impact in Canada and especially on the southern provinces. Created by the big American auto makers, the assembly plants in Canada have raised(a) employment levels and have kept a steady expeditious hood for Canadians. They have also contributed to a change in Canadian industries such as the floriculture industry, by making farming easier and more efficient. The auto industry in Canada did however create a regional economic imbalance between the provinces in Canada.Ontario is the southern province that has tremendously benefited from the auto industry as it is located close r to the upgrade companies. The location makes manufacturing and exporting of the auto parts easier for both countries. Trade agreements such as the auto pact and the North American Free Trade agreement implemented in 1994 between the United States, Mexico and Canada have also increased employment levels in Canada and maintained a steady economic balance by removing tariffs on importing and exporting goods between the three countries.During the 1980s we saw a major shift from the American auto makers to the Japanese producers of cars. This shift was mainly due to increasing oil prices and the ability of the Japanese to provide more affordable and fuel efficient cars. The global economic meltdown also contributed to the downturn of the American auto makers. With the Americans not being able to meet consumer needs, the general public turned towards the Asian auto makers. The Japanese saw a great probability and benefited from this shift.They were able to respond to public concerns regarding eco friendly cars and put in place the production of hybrid cars. These cars have swept the general North American market as they seem to be the perfect solutions for people that cannot afford to spend a lot on fuel and also at the same time want to be environmentally friendly. The Canadian auto industry has had its ups and downs but in general it can be said that it has been a great contribution to the Canadian economy by changing the lives of Canadians and by keeping a steady employment rate.