When GM and Suzuki teamed up to build a manufacturing plant in Ontario
$500M project in Ingersoll, Ont., announced amid period of intensive investment in auto sector
Two major automotive companies were teaming up to build an assembly plant in the town of Ingersoll, Ont.
That would be Suzuki and General Motors, which formally announced their $500-million joint project on Aug. 27, 1986.
And while the town welcomed the investment that would turn a cornfield into a state-of-the-art manufacturing plant, some observers questioned how much need there was for another such facility in Canada.
The National sent reporter Kevin Evans to the town to get a sense of what was coming down the road for Ingersoll and the auto industry itself.
Change coming to 'sleepy town'
"They were smiling in Ingersoll today and with good reason," Evans said at the start of his report, which aired the day the announcement was made.
"Until today, this rather sleepy town of 8,500 people was famous only for its cheese. That and the town are about to change."
Walking along the edge of the site where the plant would be built, Evans said the forthcoming facility was expected to open within three years.
When fully operational, it was slated to produce 200,000 vehicles each year and to employ 2,000 people to do so.
$200M in annual spending on parts
The news was noteworthy for several reasons, in addition to the impact it would have on the southwestern Ontario town.
"The joint GM-Suzuki venture announced today is the first such partnership to be located in Canada," said Evans.
"Of greater significance is that it's the first time an Asian carmaker building a plant in Canada has agreed to meet the terms of the U.S.-Canada auto pact."
Evans said the deal meant Suzuki would spend $200 million annually on Canadian-made auto parts.
Investment was gearing up...
The Ontario government had done its part to get the deal to move forward by providing $45 million in assistance.
The Globe and Mail reported the provincial government's support came in the form of loans that did not have to be repaid if certain targets were reached.
The Ingersoll plant was going ahead at a time when a lot of investment was being made in Canada's auto sector.
"The $500 million GM and Suzuki will sink into this cornfield increases the total of planned auto-related investment in Canada to more than $4 billion in the last 18 months alone," Evans said.
...but would it have to gear down?
But there were industry voices and observers who believed the brakes were going to have to be pumped eventually when demand for new cars fell.
"These new assembly plants — foreign assembly plants — are contributing to an overcapacity problem in North America," said Royal Bank economist Paul Noble, when speaking with CBC News.
Bob White, the president of the Canadian Auto Workers, said the demand could not keep revving up forever and thus the same levels of production could not stay in place.
"You can't continue to put capacity in North America with the market not growing as fast and expect to keep all the facilities in place," he said.
'A very, very, tough, competitive race'
But Roger Smith, the chairman of General Motors, said the market would determine which plants and products would thrive in the long run.
"The market is going to tell us which cars succeed, which plants stay open and which plants close and it's a very, very tough, competitive race," Smith said, when speaking with reporters in Toronto.
Evans said the automakers had made the deal with a strategic eye to the future auto industry in Canada.
"GM and Suzuki today toasted a partnership of necessity, one they hope will position them to be among the survivors of the major shakeup facing the auto industry in the next few years," he said.
The resulting CAMI Assembly plant in Ingersoll remains in operation today, but GM is now the sole owner.
In 2018, GM announced that the plant had produced 5 million vehicles from the day it started vehicle production in 1989.