The battered Ontario manufacturing sector is receiving a double shot of good news with investments by two auto makers that will total close to $1-billion over the next five years.
Toyota Motor Manufacturing Canada Inc. said Tuesday it will spend $100-million in Cambridge, Ont., and create 400 new jobs by 2014, while General Motors of Canada Ltd. will invest $750-million in R&D over the next five years.
Their plans underline how the auto industry in North America is bouncing back more quickly from the 2008-2009 recession than the economy as a whole.
It also shows how Canada will benefit from a shift in auto production out of Japan and the bailout of General Motors Co. in 2009.
GM Canada confirmed that it will meet a commitment made when it received that $10.6-billion bailout from the federal and Ontario governments in 2009 to spend about $850-million on research and development.
Lightweight materials, electronic controls of mechanical components and research into environmental vehicles will be the focus of the work, GM Canada president Kevin Williams said.
Mr. Williams made the announcement at the auto maker's regional engineering centre in Oshawa. Ont., where Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty defended their controversial 2009 decision to contribute to the bailouts of GM and Chrysler LLC.
The GM investment is not likely to create new jobs at the regional engineering centre, but the auto maker will work with suppliers and universities on several projects, Mr. Williams said.
There are 18 such research mandates sponsored and financed by GM now at universities across Canada, he noted.
In Cambridge, Toyota announced the second boost to production at its two Ontario plants in recent months. The Cambridge factory will increase production of the Lexus RX350 luxury crossover by 2014, making it the sole source of those vehicles for the North American market as Toyota Motor Corp. tries to reduce the impact the soaring value of the yen has had on its sales and profits.
The Cambridge plant, which is the only Toyota plant outside Japan that assembles vehicles for the auto makers luxury Lexus line, will produce a hybrid version of the RX350vehicle for the first time.
Lexus capacity will increase by 30,000 vehicles to 104,000 annually, including 15,000 hybrids.
"This is a big and ambitious project with new technology, exacting standards and tight timelines," Toyota Motor Canada president Brian Krinock said in a statement Tuesday.
Toyota and other Japan-based auto makers have been shifting production out of Japan to North America and other regions because of the yen's high value.
The increase at Cambridge combined with a boost in output of RAV4 models at Toyota's Woodstock, Ont., plant will increase the auto maker's production capacity in Canada to 500,000 vehicles annually, Mr. Krinock said in an interview.
The move revealed Tuesday will require modifications to the existing Cambridge facility, which also assembles the Corolla and Matrix compact vehicles.
"We are already maxed out in the facility," he said.
The investment in Woodstock will also add 400 workers, beginning next year, so total employment will grow to 7,300 people by early 2014.