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PRINT EDITION
A NAFTA legacy: Canadian auto jobs are booming, just not in the factories
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By GREG KEENAN
  
  

Email this article Print this article
Monday, February 5, 2018 – Page B1

Scott Jones, co-owner of West Coast Auto Group, figures his five car dealerships in Maple Ridge, B.C., employ 20 per cent more people today than they did a few years ago.

Mercedes-Benz Canada Inc. now owns 11 corporate stores compared with 14 in 2000, but the number of employees at those stores has soared to 1,400 from 575.

These are just two examples of how employment in the auto sector in Canada has been transformed since the North American free-trade agreement came into force: The number of jobs in manufacturing has declined, while the number of jobs in auto sales, repair and finance has soared.

The combination of a buoyant Canadian market that has posted five straight annual sales records and the closing of several assembly plants, which eliminated more than 10,000 jobs in vehicle manufacturing, has changed the landscape.

When NAFTA took effect in 1994, there were 163,000 Canadians working in vehicle assembly, parts manufacturing and tool, die and mould making, representing 27 per cent of all automotive employment. By last year, the number of jobs fell to 151,840, or 21 per cent of total employment.

Jobs not related to manufacturing grew by almost one-third since the inception of NAFTA - to more than 571,000 last year from 434,000 in 1994.

"Manufacturing has been hurt and you can measure that through the number of vehicles we're producing, the value of parts, the value of vehicles and employment, the one all the politicians focus on," said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. "Nobody ever talks about the non-manufacturing jobs."

As another signpost of how the relative importance of auto manufacturing has declined, the ratio of vehicle production to sales in Canada fell last year to a level seen only once since the mid-1960s, and that was during the Great Recession of 2009.

Auto makers built 106 vehicles for every 100 they sold in Canada last year. Since the CanadaU.S. Auto Pact took effect in 1965, the only lower ratio was in 2009 when the companies produced 101 vehicles for every 100 sold. At its peak in 1995, that ratio stood at 207:100.

The booming vehicle market in Canada is responsible for a massive increase in the number of vehicles on the road in Canada, which is one of the factors that is driving the increase in non-manufacturing jobs.

There were 27 million vehicles on the road in Canada last year, compared with about 15 million in the 1990s, Mr. DesRosiers says. That has spurred much of the job creation at dealerships and companies in what is known as the aftermarket - vehicle repairs and the making and distributing of the parts necessary for those repairs.

The boom has made it difficult to find employees in the Vancouver area, said Mr. Jones, a third-generation dealer.

"It's almost like Alberta was during their economic boom," he said. "Certified journeymen technicians are very difficult to come by. It seems the best way is to train and promote from within."

Aftermarket jobs such as those at Canadian Tire and independent garages and repair chains have risen every year since 1994 without a hiccup, even during the recession.

Those jobs grew 25 per cent between 1994 and last year.

"Yes, we would have been better off [keeping the manufacturing] jobs - but we've ended up net ahead by a significant number of workers," Mr. DesRosiers said.

The growth of Mercedes-Benz since 1994 shows how the industry has changed.

The company is building a flagship store in the west-end Toronto suburb of Etobicoke that will have 50 service bays.

"That will be the biggest Mercedes service facility we have in the country," Mercedes-Benz Canada president Brian Fulton said. "We need 50 service bays in Etobicoke. We've got eight right now."

That number of bays will also make the dealership's service area one of the largest of any auto brand.

Mercedes-Benz Canada sales have quadrupled since 2000.

Data compiled by Mr. DesRosiers show that 48 per cent of the vehicles the company has sold in the past 20 years - with the exception of its Smart microcar brand - are still on the road.

The auto maker's move to offer vehicles in virtually all segments of the market and the overall strength of the economy have contributed to the sales boom, Mr. Fulton said in an interview. That includes the announcement last week that the company will start selling its A-class cars in Canada beginning this fall.

People who thought they could never afford a Mercedes or any luxury vehicle "are saying, 'I can make that jump and it's affordable,' " Mr. Fulton said.

Service is crucial to maintaining customer loyalty, he added.

"Getting that customer in the door the first time is the hardest thing. If you've got them, you can't let them go."


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