Evidence of meeting #20 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was vehicles.
A recording is available from Parliament.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you, Mr. Chair.
Welcome, everyone.
I'm going to start with Mr. Kroll from Electra Meccanica.
You mentioned that you have reservations for about 20,500 single electric cars. You also mentioned that both the BDC and private banks rejected funding for you to be able to expand. Can you expand on the reason they rejected your request?
Chief Executive Officer, Electra Meccanica Vehicles
No reason was given. There's great interest in our vehicles. The BDC representatives here in British Columbia have test driven our prototypes, and they all love them. They all show up for photo opportunities, but nothing tangible actually comes forth. We have 20,500 written reservations for our vehicles throughout the United States, and actually Japan, believe it or not. While the Prime Minister was in Japan trying to get Japanese companies to move to Canada, we were actually taking orders to send Canadian cars to Japan to help them with their traffic congestion. But there has been absolutely no follow-up from BDC to my direct requests for assistance in building an assembly facility here in Canada, British Columbia and southern Ontario. There has been nothing, no follow-up at all.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Mr. Dias, I understand that the proportion of employees that are covered under your collective agreement has been reduced by about 270,000 members. Can you explain the reason for that?
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Okay, let me share with you what I have.
In 1997 it was 36.4%, and it has gone down to 26% in 2015. You started with 695,900 members in 1997, and you're at 426,000 in 2015.
National President, Unifor
Look, your numbers are way out. I don't know where you got them from.
We used to belong to the UAW. I'm going back almost 30 years, when we had 1.2 million members. We left 30 years ago and started a union with 80,000 members. Three years ago, we created Unifor when we merged with CEP, which brought in 100,000 members. Today we're at 315,000 members. We are at the largest number we've ever been in the history of our union. That 600,000 number would likely be CUPE.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Ms. Craig, you mentioned the closed market, and you mentioned specifically South Korea and Japan. What role do their governments play in ensuring that the market remains a closed market, and what role do the citizens play in making sure they buy the cars that they buy?
President and Chief Executive Officer, Ford Motor Company of Canada Limited
It's a great question. It's a bit of a difficult one, because ultimately the government has to play by the rules, and that is what has not happened. Even when you take the South Korea free trade agreement, for example—and Jerry cited the numbers—just to give you an idea, last year 137,000 South Korea exports came into Canada. Ford only exported 500 . There were only 3,200 that came from Canada. So it continues to be a closed market. I could give you the same data for Japan.
The frustration we've had, whether it be the South Korea free trade agreement that we've got experience with.... Even if you have tariffs that get reduced over time, there are the non-tariff barriers that are primarily currency manipulation, which are preventing our vehicles from getting in. That's one, but I'll give you another example with what happened in South Korea. Consumers had bought vehicles that were exported into South Korea. All of a sudden for some reason, they got audited. So in their equivalent of whatever their registration area is, all of a sudden, everybody who didn't buy a Hyundai or Kia was getting a phone call about their purchase.
Small things like that happen. There are parts issues where we can't get parts into South Korea, and where we can't get the vehicles fixed if we need a repair. There are what we call these non-tariff barriers, and it comes down to the government not playing by the rules. That's why, at least from our standpoint, we really at least wanted to make sure we had strong currency disciplines, so at least we knew that there were teeth in the IMF, so we could prevent that from happening.
Liberal
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Thanks very much, Chair.
Thank you to all our guests for being here this afternoon.
The discussion on currency manipulation that has just taken place, having these vehicles or the people who are purchasing them audited, reminds me a lot of the BSE situation that was spoken of before. It's something I think we have to recognize, that some of these things are done to discourage some of the exports we have.
Mr. Kroll, it seems a little interesting. In our discussion, as we talked about grant-based programs and so on, you were talking about loan guarantees, but you've had some difficulties with BDC and finding that sort of support.
Is a loan guarantee the approach we should be looking at, and should the large companies also be considering those as the way forward? How do you see that, because of course, you are competing against them in so many different ways?
Chief Executive Officer, Electra Meccanica Vehicles
Looking at what has been successful recently, over the past 10 years in the automotive industry, no car company has been more successful than the Tesla automotive company. That's been largely due to consumer demand. The fossil fuel vehicles are comparable to a fax machine, whereas the vehicles Tesla is producing are the equivalent of the Internet. That's where the demand is.
Whether in Canada, the United States, Norway, or Japan, anything that the government can do to help the automotive industry innovate toward a cleaner environment and a cleaner industry, in both the manufacturing and post-consumer delivery of the vehicle, should be encouraged.
That's really where the money is going to be. Whether it's Ford, GM, or us, delivering vehicles that are good for people, planet, and profit is where tomorrow's economy is going to be.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Thank you very much.
Of course, that speaks to innovation. Where I come from in central Alberta, I'm more likely to have a Ford F-350 than I am to have an electric vehicle because that is simply the reality of where we live, and I do have a Ford F-350.
Again, there is discussion about the sourcing of different sorts of products, and one of those things that is so important to us is animal products for leather. This is something that has been critical. As we see when people have a different philosophy as far as advancements are concerned, there are concerns that exist there. It's a tightrope that I think people have to look at, because you do have people who want to make sure we protect everything. They don't necessarily recognize some of the issues that occur in other sectors.
What I would like to talk to Ms. Craig about is the $7.8-million investment for cold-weather testing that has just taken place. In it, Ford talks about Canada's clear capacity for innovation, the proven talent we have in the workforce, as well as a strong network of great universities, start-ups, and innovative suppliers.
This is something we're looking at in Kapuskasing, Ontario. For someone who lives where cold weather is part of reality, I wonder if you could perhaps give us a bit of an idea of what you see is going to take place there.
President and Chief Executive Officer, Ford Motor Company of Canada Limited
There are a couple of things. Obviously cold-weather testing is pretty important to Ford, especially when we get into electrified vehicles and when we think about our future.
I certainly want to talk a bit about electric vehicles, because 2% of the vehicles sold in Canada today are electric vehicles or plug-in hybrids, so there is not the demand that we need.
Ford Motor Company made an announcement in December for $4.5 billion in electrified vehicles over the next five years, to have 40% of our nameplates as an electrified or a plug-in.
It's really important that we create the demand. It's not there right now, but part of that is how we test for cold-weather climates, especially when it comes to electrification.
I don't know if either of you have anything else to add on that.
Vice-President, Human Resources, Ford Motor Company of Canada Limited
If I could make just one point, sir, I think the facility that was mentioned in Kapuskasing is actually a General Motors facility, not a Ford facility.
Vice-President, Government Relations, Ford Motor Company of Canada Limited
About Ford, we do have two leading-edge R and D centres in Canada. We have the Powertrain Engineering and Research Development Centre in Essex. We have spent almost $100 million on R and D projects there to do the full range of power train. It can test, develop, and do R and D work on an electrified product, a diesel engine, a gas engine, as well as on the full range of alternative fuels.
Separate and distinct from that, our Oakville assembly complex includes a fumes to fuel research project. We're working on 43 different R and D projects in Canada with Canadian universities and suppliers in the areas of light-weighting, advanced material forming, and biomaterial.
Liberal
The Chair Liberal Dan Ruimy
Thank you very much.
We're going to move to Mr. Baylis. You have five minutes.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
I'll ask all three of you the same question, and I'll be timing you because I want to make sure I get my questions in.
It's a simple question. With the other people we've had, we've been looking at productivity. Here, I'm hearing from all three of you that it's not even productivity. It's about keeping what we have and helping us grow.
I'd like to hear from each one of you what would be the top two things you'd like the government to do to help you stay here, and in your case, not to go to Mexico.
I'll start with you, Mr. Kroll.
Chief Executive Officer, Electra Meccanica Vehicles
We're [Technical difficulty—Editor] but we have already explored China—I was in China—for manufacturing the vehicles, and we have, through the Government of B.C., a contact to India: 100,000 vehicles in either place without really too much effort.
A template similar to what was so successful in developing Tesla in the United States is exactly what needs to be followed. Just look at the way the milestones were put together: we hired our 100th employee; we hired our 1,000th employee; we delivered our 1,000th car; we exported our 2,000th car. That's where $5-million increments come together to build up a business—as a loan, with interest and principal repaid. That has to happen.
There's no reason that we can't have a North American assembly facility for tomorrow's technology of clean energy, small-footprint vehicles built in southern Ontario and British Columbia for all of North America. There's no reason we can't do that. The template is there. The benefit for employees, for taxes, and for the environment has already been proven. We just need to reflect that.
President and Chief Executive Officer, Ford Motor Company of Canada Limited
[Technical difficulty—Editor] to our plants. Help with the investment. It goes right back to the automotive innovation fund. Make it competitive so that we can bring innovation to the plants. That will help improve the productivity.
National President, Unifor
We work closely together, obviously.
We need a system of grants instead of taxable, repayable loans, and not just in the auto industry. That needs to go right through the system if you're going to create real and meaningful manufacturing jobs. Also, we have to stop signing disastrous trade deals. We need to sign trade deals that benefit Canadians. The government can start off in a meaningful way by blocking the TPP.
Thank you.