January 11, 2016 / 11:11 PM / 2 years ago

Ontario looks to Michigan to boost regional car-making profile

MONTREAL (Reuters) - A minister from the car-making Canadian province of Ontario wants to work with the U.S. state of Michigan to fend off rivals in southern United States and Mexico and boost the Great Lakes region’s industry profile, he said on Monday.

Brad Duguid gets up to speak in Toronto January 21, 2010. REUTERS/Mark Blinch

Ontario Economic Development Minister Brad Duguid said in a phone interview en route to the Detroit auto show that he would like to discuss a possible partnership with Michigan Governor Rick Snyder if they meet there.

All major U.S. automakers are based in the Great Lakes region around the U.S.-Canadian border, where labor costs are higher than in Mexico.

“This is in response I think to misconceptions that we’ve seen about the Great Lakes auto cluster,” he said. “Some have been left with the impression that there are more automobiles being built in Mexico or the Deep South than there are in the Great Lakes region and that’s simply not the case.”

A spokesperson for the state of Michigan was not immediately reachable for comment.

Three major automotive research firms, AutoForecast Solutions, IHS Automotive and LMC Automotive, project that General Motors Co, Ford Motor Co and Fiat Chrysler Automobiles will dramatically increase their Mexican output of small cars by 2020.

U.S. automakers pay their workers in Mexico $8 to $10 an hour, including benefits, data from the U.S.-based Center for Automotive Research show. GM’s average labor cost per hour is $58, Ford’s is $57, and Fiat Chrysler’s is $48 because it has more workers earning the lower, entry-level wage.

Canada’s share of North American manufacturing of cars and light trucks has fallen since the 2009 financial crisis.

Mexico’s auto production rose 5.6 percent while exports climbed 4.4 percent in 2015 over the prior year, the Mexican Auto Industry Association (AMIA) said on Monday. The auto sector makes up about 30 percent of Mexico’s exports.

Reporting by Allison Lampert; Editing by Richard Chang

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