HomeMy WebLinkAboutCAO-07-027 - Labour Council's Request for Support of Manufacturing Sector~4
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REPORT
Report To: Council
Date of Meeting: May 14, 2007
Submitted By: Rod Regier, Executive Director, Economic Development
Prepared By: Valerie Bradford, Business Development Officer
Ward(s~ Involved: All
Date of Report: May 10, 2007
Report No.: CAO-07-027
Subject: Labour Council's Request for Support of Manufacturing Sector
RECOMMENDATION:
Whereas 2.1 million Canadians work in manufacturing jobs in Canada, which includes 1 in 4
jobs in the Waterloo Region;
And Whereas manufacturing in Waterloo Region provides employment to 62,000 workers
(2005} or 25% of the Region of Waterloo workforce;
And Whereas the Region of Waterloo has lost approximately 7000 jobs in the manufacturing
sector since the year 2000;
And Whereas this loss has had a ripple effect, negatively impacting on the service industry,
retail sales, and tax revenues at all levels;
And Whereas this loss of tax dollars hurts locally-delivered social services, at a time when the
need is greater due to the job losses;
Now Therefore Be It Resolved that the Council of the City of Kitchener acknowledges the
positive contribution of the manufacturing sector to our local economy;
And that, the Council of the City of Kitchener supports the Waterloo Region Labour Council in
their efforts to assist local business in preserving existing employment opportunities in the
manufacturing sector, and to bring the challenges facing this sector to the attention of the
provincial and federal governments;
And that the Council of the City of Kitchener continues to work with and support its partners to
stimulate the creation of employment growth in all sectors of the local economy, including the
attraction of high quality manufacturing jobs;
And that with its partner agencies, the Council of the City of Kitchener will continue to
encourage the provincial and federal government to strengthen investment initiatives in the
Waterloo Region.
BACKGROUND:
Michael Devine, representing the Waterloo Region Labour Council, appeared before
Development and Technical Services Committee on Monday, May 7th, to request support for a
resolution drafted by the Labour Council regarding the multiple effects of the loss of
manufacturing jobs to this Region and the Country as a whole. Committee deferred
consideration of the resolution to the May 14th meeting of Council, and directed staff to prepare
a report on the current situation with respect to manufacturing jobs in the City of Kitchener, and
amend the wording of the resolution accordingly.
REPORT:
Over the past several years, the Manufacturing Sector has undergone a period of structural
adjustment, due to ongoing systemic challenges, such as ever-increasing global competition,
rising energy prices, currency fluctuations, and issues facing the competitiveness of the North
American automotive industry. The manufacturing sector continues to be a major economic
driver in Kitchener's economy, with 24% of the workforce being employed in manufacturing,
second only to the city of Windsor in this regard. It generates $7.2 billion in added value and
$3.3 billion in personal income annually (2003 figures}.
Total regional manufacturing employment declined rapidly after reaching a peak of 68,000 in the
year 2000 (Figures 1 & 2). Any further decline in total manufacturing employment would clearly
have a detrimental affect on not only those directly affected, but also on the city as a whole.
Total Employment in Manufacturing
80,000 1,120,000
'~ 1,100,000
70,000
I
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~e~,~ j 1,080,000
60,000
~,,.--' ~ 1,060,000
~ 50,000
1,040,000
V ', 0
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L
~
40,000 L
1,020,000
s ! 0
~ ~ Kitchener CMA ~
1,000,000
30,000
~-~ Ontario
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980,000
20,000 ~
960,000
10,000
! 940,000
- ~ 920,000
1998 1999 2000 2001 2002 2003 2004 2005 2006
Sao
250
Employment - Kitchener CMA
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N
O
°0 2ao
T
~..i
~ 150
~ + Manufacturing
E
W Total Employed
L
~ 1 ao
z
50
0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Manufacturing remains the largest individual sector, followed by trade, (service producing
sector) and while it is true that some manufacturers have downsized or ceased operations in
recent months, others continue to adapt to the changing environment and grow, prosper, and
increase employment. Many companies, taking advantage of the high value of the Canadian
dollar, have invested substantially in capital improvements in order to remain competitive with
offshore competition, which not only have lower labour costs, but operate under considerably
less stringent safety and environmental regulations.
One of the secrets to the ongoing sustainability of the manufacturing sector locally, is the
region's ability to innovate and not only adapt to new technology, but to embrace it. Thus, while
the number of manufacturing jobs may decrease, the total Value Added increases as the
complexity of the products produced increases. This increasingly complex production is also
less vulnerable to offshore competition.
While the Region of Waterloo and the City of Kitchener have suffered a number of notable plant
closures and layoffs, we continue to attract new manufacturing operations and jobs, a testament
to the ongoing competitiveness of the local environment and the expertise and ingenuity of the
local workforce. There is no question however, that these new manufacturing jobs require a
higher degree of skill than required previously, with most requiring post secondary education, or
retraining of the current workforce.
The new Toyota assembly plant to be located in nearby Woodstock, will no doubt be supplied
by their current supply chain, many of whom are located within the Region of Waterloo, and this
was one of the determining factors in locating the facility there. It is anticipated that many of the
workers at the Woodstock plant will come from Toyota's current workforce at the Cambridge
facility, which will create new, high quality manufacturing jobs at the Cambridge plant. In
addition, 22% of the total applicants for jobs at the Woodstock facility have come from residents
of the Waterloo region.
These positive developments on the horizon however, in noway minimize the plight of
manufacturing workers who, through circumstances beyond their control, find themselves
currently displaced, often after decades of service. In many cases, retraining or upgrading of
skills will be required in order for these valued workers to be considered for the new
manufacturing jobs that utilize state-of-the-art technology.
Kitchener has long recognized the importance of the manufacturing sector, and is committed to
providing ongoing support however possible. The City of Kitchener initiatives in this area can be
summarized as follows:
- Continue to engage in discussions with manufacturers about the competitive challenges
facing the industry
- Support the work of industry associations (such as Automotive Parts Manufacturers
Association, Excellence in Manufacturing Consortium, High Performance Manufacturing
Consortium, Canadian Manufacturers and Exporters, Communitech, etc.}, as well as the
Waterloo Regional Labour Council and Chambers of Commerce.
- Work with Canada's Technology Triangle to attract manufacturing investment
- Exploring ways of attracting higher levels of R & D in the Region's manufacturing sector
- Continue to provide competitive and effective municipal services
- Encourage development and full utilization of employment lands
- Support improved transportation infrastructure to facilitate the movement of raw
materials, finished product, and employees throughout the region
- Work with Kitchener-Wilmot Hydro and the Ontario Power Authority to ensure adequate
capacity, quality and reliability of power supply
- Support ongoing labour force development by working with the Waterloo Region
Immigrant Employment Network, the Waterloo Wellington Training and Adjustment
Board, and the region's post secondary institutions and training facilities
Attached as Appendix A to this report is a comprehensive list of the proactive initiatives being
undertaken by Canada's Technology Triangle Inc. together with other community partners,
focussing on the automotive and other manufacturing sectors.
FINANCIAL IMPLICATIONS:
None
COMMUNICATIONS:
N/A
Rod Regier, Executive Director
Economic Development
Valerie Bradford
Business Development Officer
Appendix A
Proactive Initiatives by Canada's Technology Triangle Inc and other Community
Partners Focused on the Automotive and Manufacturing Sectors. (Source CTT}
2005
Feb. 2005 National Manufacturin Summit Ottawa, ON
Mar. 2005 Great Lakes Manufacturing Forum Detroit, MI
May. 2005 Automotive Parts and Manufacturers Association
Conference and Exhibition Hamilton, ON
Aug. 2005 Automotive Community Program Traverse City,
MI
Sept. 2005 Automotive Community Program Meeting Marysville,
ON
Oct/Nov.
2005 CME Annual Conference Toronto, ON
2006
Jan. 2006 Automotive Communities Program Meeting and
Prospecting Calls Detroit, MI
Jan. 2006 Japanese Automotive Mission Waterloo
Region
Jan. 2006 Canada-l1SA Automotive Dinner and Prospecting
Calls Troy, MI
Feb. 2006 Emergence of Cross-Border Regions -The Great
Lakes - hosted b C IG I Waterloo, ON
April, 2006 Society of Automotive Engineers World Congress Detroit, MI
May, 2006 Automotive Parts Manufacturers Association
Conference and Exhibition Hamilton, ON
June, 2006 Southwestern Ontario Industrial Show Kitchener, ON
June, 2006 Canadian Regional Lean Manufacturing
Conference Kitchener, ON
June, 2006 Italian Advanced Manufacturing Technology Event Toronto, ON
June, 2006 JETRO/MEDT Auto Mission to Ontario Waterloo, ON
June, 2006 International Conference on Advanced
Manufacturin Technolo ies London, ON
June, 2006 Canadian Manufacturers Exporters -Ontario
Manufacturing 20/20 Summit Kitchener, ON
June, 2006 Consultation on Manufacturing by Karen Redman,
MP, Kitchener Kitchener, ON
June, 2006 Automotive Community Program Meeting Toledo, ON
Aug. 2006 Automotive Management Briefing Seminars Traverse City,
MI
Sept. 2006 Visit from Austrian Automation and Advanced
Manufacturing -Canadian Embassy Waterloo
Region
2007
Jan. 2007 Automotive Communities Program Detroit, MI
Mar. 2007 Great Lakes Manufacturin Forum Toronto, ON
A ril, 2007 Automotive Communit Pro ram Meetin AnnArbor, MI
April, 2007 Society of Automotive Engineers World Congress Detroit, MI
May, 2007 Automotive Parts Manufacturers Association
Annual Conference and Exhibit Hamilton, ON
May, 2007 AUTO21 Scientific Conference Hamilton, ON