Canadian Plastics


By Umair Abdul, Assistant Editor   

News of a potential merger between automakers General Motors and Chrysler sent a wave of speculation through the auto industry in October.

News of a potential merger between automakers General Motors and Chrysler sent a wave of speculation through the auto industry in October.

While talks between the two companies were put on hold after the Bush administration didn’t come forward with a reported US$10 billion to US$15 billion in government aide to finance the merger, the discussions are emblematic of the continued volatility at the former Big Three.

For Canada’s auto parts suppliers, however, the mere spectre of a merger between any members of the Big Three is enough to cause unease. Which product platforms would be divested if two of the companies merged? And, more importantly, what would a major OEM merger mean for the companies’ North American supplier base?

This and other unsettling news from Detroit is forcing many parts suppliers to consider potential work with Asian OEMs and suppliers.



Asian auto work is not new, of course. Canadian suppliers have been making parts for Asian OEMs and suppliers for decades now. But for small-and mid-sized enterprises, positioning their business to meet the needs and wants of Asian companies can pose a particular set of problems.

The Automotive Parts Manufacturers’ Association (APMA) has launched a new program that is designed to help suppliers achieve operational effectiveness with Asian OEM considerations in mind. The program has been put together with $600,000 in funding from the Ontario government, provided to the APMA to assist companies through training programs.

“We were exploring with the government about the difficulties in this industry, and one of the things we put forward was that companies need more assistance and training,” explained APMA president Gerry Fedchun. “They need to be able to upgrade themselves, and get better at things, and a lot of them don’t have the wherewithal to do that.”

Using the government funding, the APMA partnered with two consultants with first-hand knowledge of Japanese business philosophies to design a three-phase program.


The first phase of the program consists of a complete analysis of the supplier’s operations. Instead of applying a cookie-cutter solution to the supplier’s business, the consultants look to identify any potential areas of improvement.

“Everyone is at different stages of this, so it really needs to be tailor-made for each company,” explained Fedchun. “You have to go into the company and do it there.”

The two consultants from the Operations Expertise Inc., who developed the program, visit the supplier and evaluate their operation using a nine segment survey known as an Operational Effectiveness Review (OER).

“We survey the status of where they are, and then offer assistance in two areas — support and position them for new opportunities with Asian companies and offer general recommendations to improve their current profiitability,” noted Murray Mason, senior partner Operations Expertise Inc. Mason spent nearly 14 years developing and commercializing hydro-form technology, working with OEMs such as Ford, GM and Chrysler. He also worked as a chief engineer for nine years at one of Honda’s largest suppliers, introducing the same new technology on the Civic and Accord. The other senior partner is Jim Phillips, former VP of purchasing of Honda North America.

As part of the first phase of the program, Mason notes that they look at some of the hard measures based on the effectiveness in areas such as manufacturing, quality, maintenance and materials management. But the group also looks at “soft” areas, which can help create the right impression on Asian customers.

“Their expectations are going to be different as far as ways of doing things, and how they judge you is going to be different,” explained Mason. “They will, for instance, look at the cleanliness of the plant, and use that as an indicators of a well-run business.” Both Mason and Fedchun note that the Japanese look for a higher level of cleanliness and orderliness than North Americans do, and it can be an important consideration when trying to make a positive first impression on potential customers.

Additionally, Mason says that Asian customers also place a greater emphasis on employee-driven improvement programs, which is uncommon in the North American industry. These programs are designed to get improvement ideas from the people working on the floor.

Once Mason and his team have completed their operational effectiveness review and provided a full report with general recommendations, the second and third phase are designed to design and implement specific action plans and verify the results.

The APMA recently completed a pilot program for its operational effectiveness program, with five companies participating. Mason notes that he worked with two suppliers prior to working on the APMA program, and both were able to increase their business dealings with the Japanese.


Based out of Cambridge, Ont., Canadian General-Tower Limited manufactures automotive interiors made of both PVC and non-PVC materials. The company has two facilities in North America, and currently employs 800 people. CGT has facilities in China and Thailand, and is also involved with the European market.

Additionally, the company is currently on the cusp of getting into the Mexican market.

The mid-sized firm has $300 million in annual sales and already supplies to all of the Japanese OEMs and suppliers.

“We’ve got experience with that, and we know that they take the time to look,” noted Jan Chaplin, president and CEO of CGT. “They look at fundamentals that are very basic, like cleanliness and product flow.”

Though CGT doesn’t need the help when it comes to selling into Asian markets — the company is already selling to those suppliers — Chaplin participated in the pilot program to get the general benefit of improved operational effectiveness.

The program started with an initial meeting between Chaplin and the consultants to go over the program’s methodology. The experts then took a plant tour to get the lay of the land, and used it to get their indicators.

“Then they gave us a grocery list of about ten things that they drew our attention to,” she explained.

“The one that stuck in my mind was that they commented on our organizational structure for management personnel and the way we were structured on the top,” she continued. “They thought it was too complex for an organization of your size.”

She notes that the process forced CGT to look at their operations in a different way. And though they chose to disregard the program’s advice in at least one area, she admits that the experts were right.

“They discouraged us from implementing IT software that was intended to improve our information system…they said it seemed kind of fundamental, whereas we have a complex environment,” noted Chaplin. “We went ahead with it, and as it turned out, we ended up pulling it.” CPL


Automotive Parts Manufacturers’ Association (Toronto);; 416-620-4220

Canadian General-Tower Limited (Cambridge, Ont.);; 519-623-1630

Operations Expertise Inc.;; 416-388-3260


GM, Chrysler merger: yea or nay?

The possibility of General Motors acquiring Chrysler has certainly got Canada’s automotive industry talking — although not necessarily in unison.

A merger between the two auto giants would create a firm with about 36 per cent of the auto market and plants across North America. In Canada, the two companies employ about 30,000 people — 20,000 at GM and 10,000 at Chrysler — and have assembly and parts plants across southern Ontario.

Many automotive analysis and research firms didn’t mince words, predicting that the merger would create a ripple effect for

“A merger of the two, or an outright acquisition of Chrysler by GM, would lead to a swift shakeout of U. S. parts makers as product platforms converge and new vehicle programs are eliminated,” noted SupplierBusiness, a research company focused on auto supply base issues.

The Canadian Auto Workers (CAW) also spoke out against the merger. “We cannot solve the industry’s problems by reshuffling company brands,” said CAW president Ken Lewenza. Warning that the merger threatened thousands of jobs, the CAW also called on the federal Competition Bureau to oppose any merger that does not include protection for Canadian operations.

Auto industry analyst Dennis DesRosiers, meanwhile, is relatively optimistic that the merger won’t affect the automakers’ Canadian operations, which include a GM plant in Brampton, Ont. “The stuff in Canada is seen to mesh as well as any with what GM needs, so I don’t think it’s as negative for Canada as some people might,” DesRosiers said.

In the end, the merger — or another similar to it — may prove unavoidable. “A link between at least two members of the Detroit’s Big Three — whether GM, Chrysler or Ford — is now considered inevitable,” noted SupplierBusiness. “The three OEMs are bound to be transformed into two, and it will happen soon.”



With the initial pilot program now complete, the APMA is making some slight tweaks and rolling out the program members and all the automotive parts manufacturers with facilities in Ontario.

“Those five companies that went through the pilot have really now completed phase 1 of the regular program,” explained APMA’s Gerry Fedchun.

Suppliers looking to get involved with the operational effectiveness program should contact the APMA directly.


Automotive Group Helps Chinese OEMs Connect With North America

For North American automotive suppliers looking to grow their business in China, the Automotive Industry Action Group (AIAG) is trying to make the task a little simpler.

The Detroit-based AIAG has introduced an Emerging Markets (EM) membership category to support North American members who conduct business and/or source in emerging markets such as China.

“The purpose of this new membership opportunity is to accelerate Chinese suppliers’ assimilation into the global automotive supply chain through their adoption of the accepted industry standards, guidelines and best practices developed at AIAG,” said CEO Scot Sharland.

As part of the initiative, the AIAG has opened a representative office in Shanghai to support its members that are conducting business in the Chinese automotive industry.

For information about joining the AIAG, as well as a pdf document outlining the group’s effort to bridge gaps in the Chinese automotive supply chain, go to


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