When Maple Leaf Foods Inc. announced it would close five aging meat plants in Ontario and replace them with a single high-tech mega-plant in Hamilton, the move meant a loss of 1,550 jobs.
The new plant, with its highly automated processes, would be able to produce as many or more hot dogs and sliced meats at a much lower cost, making it more competitive with multinational rivals, the company said.
Welcome to the brave new world of manufacturing in Canada, where sales and exports are finally recovering from the recession but jobs on the plant floor continue to disappear.
Manufacturing sales have regained most of the ground lost during the recession, according to Statistics Canada.
But only a third of the lost manufacturing jobs have come back, according to Dina Cover, an economist with TD Economics.
Manufacturing now represents just 10 per cent of all employment in Canada down from a peak of 16 per cent in 2000, she noted.
That will improve as Canadian employers gain confidence in the U.S. recovering and replace overtime hours with new hires, she predicted.
But manufacturers will continue to face all the challenges that were in place before the recession – a higher dollar, higher energy prices and competition from countries with lower labour rates.
“There’s no way we can pop any champagne corks. Far from it. There’s some hopeful signs but also some tremendous challenges,” said Jim Stanford, economist with the Canadian Auto Workers, the country’s largest union.
The U.S. economy is finally recovering from the recession of 2008-09, which is good news for Canada’s exports, Stanford noted.
On the other hand, the higher Canadian dollar has become “a permanent and punishing penalty on our manufacturing sector,” Stanford said in an interview Monday.
Canada’s dollar soared from a low of 62 cents U.S. in 2002 to at or near parity with the U.S. dollar in 2007 and now threatens to remain there, held up by high oil prices.
The days of the high-paying, low-skilled “repetitive assembly line job” are numbered in Canada, said Mark Tomlinson, executive-director and chief executive officer of the Society of Manufacturing Engineers, in Dearborne, Mich., home of the U.S. auto industry.
Whether production moves to China, India or eventually Africa, North America will be unable to compete on labour costs for the foreseeable future, Tomlinson said.
Instead, Canada’s manufacturers will have to become more innovative, Tomlinson said.
But in the ultimate irony, one of the challenges manufacturers now face is the shortage of workers.
Despite a 7.4 per cent unemployment rate, Canada in fact lacks the kinds of skilled tradespeople industry needs to become more competitive.
And that shortage is expected to worsen as the Baby Boom generation begins to retire, taking with them many skills younger workers don’t have.
More plants opened than closed last year in Canada, says Martin Lavoie, policy director for the Canadian Manufacturers and Exporters. But the new ones relied much more on research and development and were far less labour intensive than the ones they replaced.
“Twenty years ago a typical manufacturing worker on the shop floor had a high school education. In 2012, in the new advanced manufacturing sector, it’s an aerospace engineer with two masters degrees and an MBA, maybe from India,” Lavoie said.
Not all the new manufacturing jobs require a four-year university degree, said Tomlinson.
Many require less than a year or two at community college or can be acquired through online training at sites like ToolingYou.com, he said.
But too few people seem to know this kind of work is in demand, he said.
Original Article
Source: Star
Author: Dana Flavelle
The new plant, with its highly automated processes, would be able to produce as many or more hot dogs and sliced meats at a much lower cost, making it more competitive with multinational rivals, the company said.
Welcome to the brave new world of manufacturing in Canada, where sales and exports are finally recovering from the recession but jobs on the plant floor continue to disappear.
Manufacturing sales have regained most of the ground lost during the recession, according to Statistics Canada.
But only a third of the lost manufacturing jobs have come back, according to Dina Cover, an economist with TD Economics.
Manufacturing now represents just 10 per cent of all employment in Canada down from a peak of 16 per cent in 2000, she noted.
That will improve as Canadian employers gain confidence in the U.S. recovering and replace overtime hours with new hires, she predicted.
But manufacturers will continue to face all the challenges that were in place before the recession – a higher dollar, higher energy prices and competition from countries with lower labour rates.
“There’s no way we can pop any champagne corks. Far from it. There’s some hopeful signs but also some tremendous challenges,” said Jim Stanford, economist with the Canadian Auto Workers, the country’s largest union.
The U.S. economy is finally recovering from the recession of 2008-09, which is good news for Canada’s exports, Stanford noted.
On the other hand, the higher Canadian dollar has become “a permanent and punishing penalty on our manufacturing sector,” Stanford said in an interview Monday.
Canada’s dollar soared from a low of 62 cents U.S. in 2002 to at or near parity with the U.S. dollar in 2007 and now threatens to remain there, held up by high oil prices.
The days of the high-paying, low-skilled “repetitive assembly line job” are numbered in Canada, said Mark Tomlinson, executive-director and chief executive officer of the Society of Manufacturing Engineers, in Dearborne, Mich., home of the U.S. auto industry.
Whether production moves to China, India or eventually Africa, North America will be unable to compete on labour costs for the foreseeable future, Tomlinson said.
Instead, Canada’s manufacturers will have to become more innovative, Tomlinson said.
But in the ultimate irony, one of the challenges manufacturers now face is the shortage of workers.
Despite a 7.4 per cent unemployment rate, Canada in fact lacks the kinds of skilled tradespeople industry needs to become more competitive.
And that shortage is expected to worsen as the Baby Boom generation begins to retire, taking with them many skills younger workers don’t have.
More plants opened than closed last year in Canada, says Martin Lavoie, policy director for the Canadian Manufacturers and Exporters. But the new ones relied much more on research and development and were far less labour intensive than the ones they replaced.
“Twenty years ago a typical manufacturing worker on the shop floor had a high school education. In 2012, in the new advanced manufacturing sector, it’s an aerospace engineer with two masters degrees and an MBA, maybe from India,” Lavoie said.
Not all the new manufacturing jobs require a four-year university degree, said Tomlinson.
Many require less than a year or two at community college or can be acquired through online training at sites like ToolingYou.com, he said.
But too few people seem to know this kind of work is in demand, he said.
Original Article
Source: Star
Author: Dana Flavelle
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