Canadian parts makers launch NAFTA offensive

Canada's auto parts industry is taking stock of Canadian companies that have operations in the United States. The goal is to let U.S. lawmakers know just how integrated the North American automotive industry is as the future of NAFTA remains in doubt.

The Automotive Parts Manufacturers Association is conducting a survey it calls "Measure of Canadian Companies Having a U.S. Manufacturing Footprint." Its goal is to determine how many facilities Canadian companies operate in the United States, the number of Americans they employ, and in which U.S. electoral districts those plants are located.

"Not only will your submission assist our efforts, but it will also assist your company as we take the aggregate state statistical information to Washington and remind individual congressional representatives that while companies in their jurisdictions may be Canadian owned, the jobs created are American [voters]," the APMA says on its note to members.

The information will help ensure that healthy trade relations between Canada and the United States stay strong.

"As a country, we're a pretty big international investor," APMA President Flavio Volpe said. "Canadian parts suppliers are one of the biggest employers, employing Americans and Mexicans. It's important for us — 'us' being the industry at large and the provincial and federal governments, who advocate on our behalf — to understand what Canadian investment across NAFTA looks like."

Volpe said the association is "in the mid-stages" of completing the survey, which comes before the expected renegotiation of NAFTA. The U.S. Congress has also mentioned the possibility of a border tax on goods entering the United States.

"Any policy instrument you're going to use that you think will benefit the U.S. market only, or any punishing aspects of policy like a border adjustment tax, will affect consumers in all three countries, but also employers in all three countries," Volpe said.

"We're trying to make sure American lawmakers understand that we're heavily invested in their success and in the employment of their citizens."

Volpe described the point of the survey as more eye-opener than threat.

"I would say to our American audiences, 'understand that Canada isn't just a supplier of goods,'" he said. "Canadians employ Americans and Mexicans."

Volpe didn't estimate how many facilities Canadian companies operate in the United States; that's the point of the survey. But, he did say there are factories in some U.S. municipalities "you've never heard of" and that they are, in some cases, one of the biggest employers in town.

"As far as Canada and the United States is concerned, Canadian companies have invested operating capital in the United States, we think, to at least an equal amount of the U.S. investment in Canada," Volpe said. "What we're trying to do is get the data behind that so that if it's ever challenged we can say, 'look, here are 50 companies or here are 100 companies that spent billions of dollars in your country.'

"We're good partners. We are true partners. It isn't just about the flow of goods."

Volpe said the typical Canada-U.S. automotive story is about U.S. investment in Canada, especially post-war.

"But as the U.S. Southeast started to grow and as Japan and Germany started to invest in the United States, Canadian parts suppliers started to invest there, too," he said. "We need to put some figures around it and that's why we're doing this study."

Volpe knows there will be critics who frown on Canadian companies investing in the United States rather than here at home but he said the Canadian market for auto parts has been "shrinking or on hold since about 1998." Automakers have been closing, not opening, Canadian assembly plants for about the last 20 years.

"Growth, wherever it is for a Canadian company, means the company is healthy," Volpe said. "We're part of the North American industrial complex and we're a fully invested partner."