Canadian Car Plants Most Productive In North America

Canada's productivity gains doubled U.S. levels; productivity rising in Mexico from Ford investment.

TORONTO (CP) - Canadian vehicle assembly plants remain the most productive in North America and are widening their advantage over American factories, according to a Bank of Nova Scotia analysis.
The Ontario factories—the General Motors complex in Oshawa, Ford's in Oakville and St. Thomas, and Chrysler's in Brampton and Windsor—increased their output per worker by three percent last year, the report said.
This was half again as fast as the productivity gains in the rest of the economy and double the pace at U.S. car factories, the report said.
''The widening of Canada's productivity lead in auto assembly reflects a record $10 billion in machinery and equipment investment, mostly robotics and automation, over the past four years,'' Scotiabank economist Carlos Gomes said Friday.
''Given the more than 40 percent appreciation of the Canadian dollar, which has sharply eroded the competitive advantage of Canada's manufacturing sector, rising investment in machinery and equipment and ongoing productivity gains are crucial to ensure the competitiveness of Canada's manufacturing base.''
Gomes noted that productivity in Mexico is heating up, with a 17 percent surge in 2006. Most of this increase arose from US$1.2 billion in investment at Ford's plant in Hermosillo, which builds the Ford Fusion and Mercury Milan midsize sedans.
Hermosillo ''is now as productive as a typical U.S. facility and lags Canadian plants by only eight percent,'' Gomes said.
Productivity also improved at U.S. assembly plants last year, but the gain was only 1.5 per cent, the smallest since 2001, reflecting production cuts and the closure of three plants in an ongoing industry rationalization.
Gomes also said Friday that the federal government's rebate of up to $2,000 for fuel-efficient vehicles has accelerated Canadian car sales since it was introduced in March.
''We estimate that sales of vehicles benefiting from Ottawa's rebate have surged by nearly 80 per cent so far this year, single-handedly lifting industry volumes.''
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