The CARTA Workshop

On the potential of developing an indigenous Canadian presence in the auto sector

Date

August 19, 2009
The World Exchange Plaza

Introduction

The University of Ottawa and the Telfer school of management will be hosting a national conference that will be a unique event in Canada’s history. It will bring together expertise and experience in the private, public and academic worlds to investigate, for the first time, the potential of Canada’s entering the auto sector with a wholly Canadian based enterprise.

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This conference will not adopt a position of advocacy but more realistically serve as a starting conference, it will establish the groundworks to ask the serious questions that can serve as the basis of further work, research, partnering and further meetings.

Background

From Asia to Europe and the Americas, the engine that drives advanced integrated economies is the auto sector. As the leading economic force and most spin-off-rich sector in all of industry, all countries agree the auto sector simply cannot be allowed to fail.

Each country is supporting and indeed, in many cases, entered into private/public partnerships with auto manufacturers to ensure the survival of these massive economic dynamos. It is clear that a new economic model has arrived in the auto sector.

However, their are two levels of citizenship in the auto sector. First tier countries engineer, design and build. Second tier countries simply assemble products. These two categories produce very different rewards.

First tier countries develop intellectual capacity and compete with other countries using innovation and invention. While second tier players are relegated to the role of labour and must compete against emerging countries with less expensive labour.

Crisis and opportunity

Unfortunately as a member of second tier, Canada is paying merely to remain as a factory nation. As the only G8 country without an indigenous auto sector, we must ask the question why is this so?

Indeed given the great upheaval and change in the auto sector, it is difficult to imagine a more opportune time to ask many questions and investigate Canada’s role in the sector....in its entirety.

The current world economic storm-surge has had one upside: it has shown that Canada is completely exposed in the auto sector. We have no real power, no real ownership, no long-term leverage and no basic core-strength in which to place our own money.

In other words, we do not bet on Canada, we invest in America and other more inventive and resourceful countries. This is simply not the thinking of an advanced industrial nation.

It may be said that there is only one thing worse than a country having to bail out its auto sector and that is having to bail out another country’s auto sector. Incredibly, this has been our “business case” in the auto sector and it is unacceptable, unsustainable and has now been exposed as an absurd one.

We cannot forget that during this current crisis all G8 countries except Canada have been able to invest in their own indigenous, home grown auto sectors, placing bags of sand along their own rivers to weather the storm, but Canada has had to work to save another country from crisis.

Historically we have based this “strategy” on the assumption that America’s goals were precisely the same as ours. They are not and they cannot be. Given the cruel realities of global economics, looming protectionism and the changing world-political fortunes, it is logical that Canada consider other options for our own sake.

A new beginning

The CARTA conference will be just that. It will be the first step in what might result in a new Canadian ownership in the worlds most important industry.

It will focus on 8 basic questions:

  1. What are the risks/benefits of Canada’s present strategy in the sector?
  2. What are the risks/benefits of Canada becoming an automotive ground-source?
  3. Would a private sector partnership be supported by the provincial and federal governments?
  4. Can we partner with auto sector players to boot-strap our development?
  5. Could our entry into the sector be scaled to a nation-wide undertaking?
  6. Which capabilities and resources are we currently lacking?
  7. What would be the market for our entry?
  8. What type of product or product line would best suit our entry?

Conference Themes

To develop a clear position on the fundamental question, the conference will be divided into 4 major topics and break-out group discussions. These are described and itemized below:

Conference objectives

  1. Align potential strategic partners for further discussions and research
  2. Initialize a discussion between the federal and provincial governments
  3. Investigate potential supply chain and distribution channels
  4. Provide a connection through which the interested parties can continue research

Conference agenda

The conference will be a one-day event held at the World Exchange Plaza in downtown Ottawa, sponsored by the Telfer School of Management, the University of Ottawa and CARTA.

The participants will be welcomed by University of Ottawa president, Alan Rock and the the day will be convened with a brief presentation by an invited conference guest, (TBA), and a round-table discussion among the participants. Late morning, the participants will separate into the conference break-out groups. The breakout sessions will be assisted and guided by facilitated plenary sessions to guide the conference participants and discussions.

The breakout groups will reconvene by mid-afternoon and present their findings, agreements and ideas to the plenary assembly. Final feedback from all conference participants will be recorded and consensus positions captured including each group’s recommendations.

The conference report will be developed as related to responding to the fundamental question re the feasibility of a Canadian automotive sector. The draft conference report will be sent to each conference participant for final feedback. The final conference report will be presented with an eye toward strategic planning and development dependent on the consensus position of the participants with respect to developing a Canadian automobile.

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