December 10, 2009 / 6:40 PM / 9 years ago

UPDATE 1-Toyota adds production in Ontario as sales pick up

* Brings more than 800 jobs to province

* New shift to meet strong demand for RAV4

* TMMC Pres. says North America auto sector recovering (Adds byline, details, comments from Toyota Canada president)

By John McCrank

TORONTO, Dec 10 (Reuters) - Toyota Motor Co (7203.T) said on Thursday it will add a second production shift at its Woodstock, Ontario, assembly plant, bringing more than 800 jobs to the Canadian province and pointing to a recovery in the battered North American auto sector.

The company said it is increasing production of the RAV4 to 150,000 vehicles a year to meet the strong demand. It has made about 80,000 of the compact crossover utility vehicles at the plant so far this year, 60,000 of which have been shipped to the United States.

Sales of the RAV4 in North America are up 4 percent so far this year over last year, while the total automotive industry is down about 26 percent, Ray Tanguay, president of Toyota Motor Manufacturing Canada, said in an interview.

“This is also a vote of confidence that the market is recovering,” he said, pointing to improving overall sales in the United States in November. [ID:nGEE5B1039]

“I think all of us (automakers) will see a slow growth in 2010,” he said.

Hiring at the plant in Woodstock, a small city of around 36,000, about 140 km (88 miles) southwest of Toronto, begins this week. There are currently about 1,200 employees there.

Tanguay said the production increase would also mean more jobs in the supply chain. “We have about 195 suppliers in North America that will gain from this announcement.”

Between six and seven spinoff jobs, from suppliers to the service industry, are created for every auto manufacturing job.

Toyota opened the C$1.1 billion ($1.05 billion) Woodstock plant on Dec. 4 last year. That was during the same week that executives from Detroit’s Big Three — General Motors Co [GM.UL], Ford Motor Co (F.N), and Chrysler — took their case for emergency funding to the U.S. and Canadian governments.

GM and Chrysler ended up needing a combined tens of billions of dollars in government aid to survive the recession, and to emerge from bankruptcy protection.

The slashing of jobs and the shuttering of plants pushed auto assembly employment in Canada to its lowest level in over 40 years, according to data from DesRosiers Automotive Consultants Inc, released earlier this week. [ID:nN07175201] Ontario, the center of Canada’s auto and manufacturing sectors, was his hard by the industry downturn.

Toyota’s Woodstock facility was the first new auto plant to be built in Ontario in 20 years.

The Japanese-based automaker, which took the top monthly sales spot in Canada for first time ever in November, also has a plant in Cambridge, Ontario, about 45 km (28 miles) northeast of Woodstock. That plant employs about 4,500 people who build the Corolla, Matrix and Lexus RX 350.

Tanguay said demand for those models is booming too.

“We are at full capacity (in Cambridge). We have the fastest line speed ever operated, and we are working overtime and some Saturdays.”

$1=$1.05 Canadian Reporting by John McCrank; editing by Rob Wilson

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