May 19, 2006

Industrial Construction

Honda engine plant accelerates Grand Valley construction boom

IAN HARVEY

correspondent

TORONTO

Ontario’s rust belt is starting to shine and it means thousands of new construction jobs and contracts.

A year to the day competitor Toyota Motor Co. announced it would build a new assembly plant in Woodstock, Honda Motor Co. is countering with a new $154 million engine plant in Alliston.

With the news earlier this month that Linamar, Canada’s second largest auto-parts maker, will create 2,000 jobs over the next year to manufacture engine and transmission parts in Guelph and the Ontario government’s pledge to push for a Nissan plant the province, construction trades are gearing up for a busy future.

“We couldn’t be more excited,” said Martha George, executive director of the Grand Valley Construction Association, which represents about 570 companies. “This is really good news. This area is a hotspot for growth. Housing is affordable and there are lots of jobs, not just in construction, but also in spin offs.”

Honda will build the plant as part of a $1.18 billion US expansion plan to meet soaring demand for its cars.

In addition to a new Japanese factory, it will also build a new assembly plan in the U.S. as well the Alliston engine plant in an effort to increase sales by 34 per cent to 4.5 million vehicles annually by 2010, Honda CEO Takeo Fukui said.

The Alliston plant is expected to be running by 2008 and will employ 340 people.

“This will likely mean we won’t lose skilled trades in the construction industry to places like Alberta,” said Grand Valley’s George. “It might also mean some of them will come home because this is a great place to live.”

Pat Dillon of the Ontario Building Trades Council said there won’t be any trouble finding skilled trades to fill construction jobs.

“There’s high unemployment in Northern Ontario and out in Kingston-Cornwall,” he said.

“Windsor is also down. Unionized trades will draw from those areas to fill the need.”

“It’s always good to hear these kinds of announcements,” said Stephen Bauld, vice president of the Ontario General Contractors Association noting that in the short term workers can be drawn from other depressed areas.

“But with these announcments, and the Infrastructure Ontario plans to build 12 new hospitals it stands to reason there going to be some shortages,” he said noting he’d just come from a meeting with the Ontario ministry of training, colleges and universities about igniting interest in construction careers among high school students.

“They’re looking at a pilot project which would see 25 students drawn from four Greater Toronto Area schools.”

Honda’s five plants in North American cannot meet demand, meaning Honda has to import autos.

Fukui said he wants to keep production where the demand is, and said the company wants to keep it ration of domestically built vehicles sold in North America at 80 per cent.

Honda sold 1.65 million units in North America last year, including Mexico and Canada, and forecasts sales to climb to 1.72 million units in the current year.

Demand is especially hot for fuel efficient cars like the redesigned Civic, which comes in a gasoline-electric hybrid model.

Meanwhile, Linamar will create about 2,000 new jobs over the next five years in a $1 billion expansion, assisted by the Ontario Automotive Investment Strategy, a $500 million program set up two years ago.

Toyota will open its Woodstock plant, just down the road from its Cambridge facility.

The $800 million factory will churn out 100,00 RAV-4s annually.

Buoyed by the success of the incentives afforded up the OAIS, Ontario Premier Dalton McGuinty said he plans to travel to Japan to meet with Nissan officials in Tokyo next month and talk about luring them to Ontario in 2010.

WITH FILES FROM DCN NEWS SERVICES

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