In Detroit’s shadow

The adage about Canada catching a cold whenever America sneezes cuts uncomfortably close to the bone for people in Windsor, who live within view of recession-weary Detroit.

For over a century the two cities’ economies have been tightly intertwined, with the three big automobile companies – GM, Chrysler and Ford – running operations on both sides of the Detroit River. The Ambassador Bridge, linking the two cities, is one of the continent’s busiest border crossings.

But the crisis has left North America’s automobile industry fighting for its life, and Detroit is now saddled with unemployment figures reminiscent of the Great Depression. The Motor City is ailing – and Windsor has caught the cold.

Windsor: facts & figures (2006 census)

Windsor’s population is 216,473, up 3.5% from 2001. During the same period Ontario’s population grew 6.6% to 14,216,028.

Among 174,830 residents over the age of 15: 

• About 23% (40,295 people) do not have a diploma, certificate or degree.
• About 30% (53,275) possess a high school diploma or equivalent.
• About 17% (29,935) have a college or other non-university diploma.
• About 18% (31,705) have university degrees. 59,855 landed immigrants, and 3,105 non-permanent residents, lived in the city.   
  
• The average annual family income in Windsor is $62,887.  
• The average annual family income in Ontario is $69,156.
• The average annual personal income for people over 15 is $25,443, compared to $27,258 for the province at large.     
• The 2006 unemployment rate in Windsor was 9.7%, compared to a provincial rate of 6.4%.
• By May 2009, Windsor’s unemployment rate had risen to 13.5%.

Windsor’s economy is based primarily on manufacturing - the auto industry above all - but also education; government services; and tourism (the Caesars Windsor casino is the biggest in Canada).

Canada’s automobile industry
 
Canada’s first major automobile industry saw the light of day in Walkerville, now part of Windsor, in 1904, just one year after Henry Ford had kicked off production across the river. Windsor businessman Gordon M McGregor, intrigued by Mr Ford’s new invention, convinced a group of fellow entrepreneurs to invest in The Ford Motor Company of Canada.
 
Within months the new company was rolling its first car – the Model C – out of the factory, with rights to sell to all parts of the British Empire except Great Britain. In subsequent years, as Detroit consolidated its position as a world centre for automobile production, Windsor too grew into an important hub of production, helping to make Canada the world’s 2nd biggest auto manufacturer in the period from 1918 to 1923.
 
The automobile industry now represents about 14% of the Canada’s manufacturing sector, compared to its 7% share of US manufacturing. In Ontario, where the bulk of the country’s auto industry is still based, it accounts for a hefty 26 % of the provincial manufacturing and 5 % of the total provincial economy.

83% of the Canada’s auto industry is based in Ontario; 12% in Quebec, with the remaining production in BC, Manitoba, and Nova Scotia. The distribution system includes about 3,500 dealers, employing about 80,000 people.

The average North American vehicle weighs about 4,000 pounds, and contains about 2,600 pounds of steel and 550 pounds of plastic. Before the downturn, Canada’s auto sector consumed:

•    14% of Canada’s iron foundry production
•    11% of its rubber products.
•    7% of its machine-shop products.
•    9% of its wire goods
•    14% of its processed aluminum
•    6% of its carpet and textile products
•    9% of its glass products. By May 2009, Windsor’s unemployment rate had risen to over 13.5%.
•    About 15% of all domestic steel shipments, representing over 100,000 jobs in Canada’s steel industry.


Sources:

Statistics Canada; The Economist; The Canadian Encyclopaedia; The Canadian Steel Producers Association; Le Devoir, July 6, 2009; Canada News Wire, Nov 28, 2008.