Ford's big SUV plans for U.S. big news for Windsor, too
Wednesday, February 15, 2017
The Windsor Star/Doug Schmidt
Windsor’s important machine, tool and die and mould industry is eager to cash in on Ford’s plans to nearly double the number of SUV and crossover models it builds in the U.S. by 2020.
“When Ford, Chrysler or GM announce they’re building SUVs in North America, that’s great news for us,” said Craig Wiggins, of Tooling & Equipment Capital Solutions Inc., local financiers to the industry.
Tooling up for a new vehicle platform means investing anywhere from $600 million to a $1 billion, with larger vehicles at the upper end of that scale, he said.
And whether a new plant is in Canada, the U.S. or even Mexico, Windsor’s world-class automotive machine, tool and die and mould companies are competitive, said Jonathon Azzopardi, chair of the Canadian Association of Mould Makers.
“We’ll get our fair share,” Azzopardi predicts.
In response to rapid growth in SUV sales — currently the top-selling automotive segment in the U.S. — Ford last week announced plans to add five new SUV models by 2020, with sources divulging a sixth new model was being added to the Lincoln brand.
In his news conference Monday with Prime Minister Justin Trudeau, President Donald Trump made specific mention of Ford’s “billions of dollars in new investments … because of what I’m doing.”
Within days of his swearing-in, Trump warned automakers that if they don’t build in American factories the vehicles destined for the domestic market, then they can anticipate steep import tariffs on their products. In return for domestic manufacturing, he’s promising lower business taxes and a softening of environmental and other regulations.
Azzopardi, who’s also president of Tecumseh-based Laval Tool & Mould Ltd., said Windsor competes better the bigger the size of the moulds required for any automotive plastic parts. Larger vehicles like SUVs have higher margins, with typically more spent on capital costs, he added.
There are about 170 mould-maker shops alone in Southwestern Ontario, within about 150 kilometres of Windsor, and representing 80 per cent of a Canadian industry that employs 11,000 workers and contributes $2 billion annually to Canada’s GDP, said Azzopardi.
Wiggins said SUVs from the Detroit Three manufacturers tend to be designed, engineered and built in North America and that “Windsor is probably the best world-class centre for tools.”
With lower global oil prices, North American sales of bigger vehicles are growing. In the U.S., the SUV proportion of all vehicle sales rose to 38.4 per cent in 2016 from 32.6 per cent in 2014.
At last month’s North American International Auto Show in Detroit, executive chairman Bill Ford announced his company would reintroduce the Ranger midsize pickup truck in 2019 and the Bronco 4×4 sport utility in 2020, both to be built in Michigan. Coming to Michigan also is a battery-powered compact crossover with a 300-mile range to begin production in Flat Rock in 2019.
Ford also plans to redesign the Escape in 2018, Explorer in 2019 and Edge in 2021.
Redesigning vehicles is good news, said Wiggins, but “when they add brand new vehicles, and it’s trucks, that’s great news.”