March 15, 2004

Employment in automotive parts sector is up, assembly sector jobs are down

Toronto, Ontario – Employment numbers for the automotive manufacturing sector reached all-time record levels in 2004, according to figures released by Statistics Canada. But according to Dennis Desrosiers of Desrosiers Automotive Consultants, all of the growth is in the automotive parts sector.

“Be careful though in that assembly sector employment fell for the fifth year in a row and sixth of the last seven years,” said Desrosiers. “All the growth in this sector is on the automotive parts sector side of the equation.”

Automotive Parts sector employment exceeded 100 thousand for the first time, finishing at 103,415 workers, an increase of 5.4 percent or 5,000 workers over 2003. Parts sector employment is up by about 40,000 workers over the last decade plus.

The strength of the parts sector belies the popular view that if Canada doesn’t get any new assembly capacity its auto sector will be in serious trouble, said Desrosiers. “Yes it would be better to get new assembly capacity but the automotive parts sector can ship just-in-time into the entire east coast of North America and even Mexico and the overall growth in assembly capacity in North America is just as important as the growth of capacity in Canada,” he claims.

Desrosiers suggests government policy needs to be tweaked to encourage more parts sector investment, research and development, and human resource development.

“I’m not against focusing our policy machine on the assembly sector but sometimes more useful gains can be made a dozen workers at a time in the automotive parts sector. Politicians are too often fixated with the 2 – 3,000 job announcements at the assembly plants and ignore the 500 plus automotive parts companies in Canada that only hire dozens at a time and are therefore not politically sexy.”

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