Millions in military manufacturing comes to Windsor
Tool and die shops are moving away from the auto industry in order to diversify and survive
Windsor’s manufacturing sector isn’t dying. It’s evolving.
CBC News has learned that automotive parts suppliers based in Windsor are changing gears and now filling military contracts for Canadian and American armed forces alike.
The business is a lucrative one. Ottawa announced in January that 13 subcontracts worth a combined $19.67 million had been awarded to London-area business supplying parts to the Light Armoured Vehicle III built by London’s General Dynamics Land Services.
"After 2008 and the financial crash and crash of the auto industry, we were working hard on a diversification strategy to try and help people find a new way to do business and find new customers," said Tracey Pringle, the director of business retention and expansion for the Windsor Economic Development Corporation.
Controlled Goods Program
According to Public Works and Government Services Canada:
- Registration is mandatory for any company accessing controlled goods in Canada.
- A security assessment is a condition for anyone wishing to access controlled goods in Canada.
- The program regulates the access of controlled goods in Canada. Includes examination, possession, or transfer of controlled goods.
- It is designed to prevent risk of diversion and proliferation of articles and technologies which could assist in the creation of weapons of mass destruction.
- Illegal possession, examination or transfer of controlled goods is an offence under Canada's Defence Protection Act. The maximum penalty is $2 million per day and/or imprisonment for a term not exceeding 10 years.
- As of April 1, 2012, 3,840 companies registered with the program.
In 2009, the corporation held an International Traffic and Arms Regulations seminar. Every company that makes military equipment for the United States must be ITAR registered. To make similar equipment in Canada for the Canadian Armed Forces, companies must also be a certified member of Canada’s Controlled Goods Program.
In 2010, the corporation held a government procurement seminar to help local companies learn the ropes of securing government contracts.
The seminars came at about the time Ottawa was making request for tenders for production of helicopters, tactical armoured vehicles and close combat vehicles, according to Pringle.
"We now have a greater understanding of how this works," Pringle said. "We are top of mind when some of these things come out. I would say it’s been successful."
Pringle said the economic development corporation has worked with 25 different suppliers in the Windsor region in an effort to get them engaged in the military sector.
Public Works and Government Services Canada confirms that 16 Windsor businesses are registered in the Controlled Goods Program. That pales in comparison to the 76 registered in nearby London, a town not likely as well-known for its manufacturing history.
Mike Pavkovic is the CEO Croatia Tool in Windsor. His company is currently working on a military contract.
"I’ve always been looking for the next big thing or to diversify our company," he said.
He found his work through the website LinkedIn, an online social network for businesses and job seekers. The company he reached out to responded and asked how he would feel about doing military work.
"I was very interested. I was looking to expand and getting into different markets," he said.
The company sent a team of engineers, a sales manager and purchaser to his shop to ensure its security.
His 16 employees had to undergo background checks by police. Pavkovic had to be fingerprinted. The Croatia Tool building also had to put in some basic security measures.
Pavkovic can’t name which company he is working for, what he’s making or the cost of the contract.
"If I were to violate those terms at any point in time, the contract would be null and void immediately," he said.
Millions in contracts
CK Manufacturing entered the military market 12 years ago.
"We’re very diverse here," said Rodney Swann, the sales and program manager there. "We went from smaller pneumatic components to larger test components."
The company now has two distinct divisions; one for automotive production and one for military.
Swann said business peaked four years ago —at about the time of the recession and the height of Canada’s participation in the Afghanistan conflict.
"We’ve stayed steady thanks to our diversity ever since," Swann said.
CK Manufacturing currently has $4 million worth of military contracts in production.
"I think there are more, smaller shops pursuing the certifications to manufacture [military parts]," Swann said. "The auto sector has slowed down and people need to diversify and aerospace and military are the places to go."
Pringle said the local industry is simply "feeding a demand."
"At the end of the day, we’re not making a tank Windsor. I don’t think there’s much of a concern about making this a military destination," she said. "If companies are able to land some of these contracts, clearly they’re going to need people to manufacture and service those parts for 25 years. "
That’s because, according to Pringle, contracts are looking for suppliers who financially stable and can produce and service parts for contracts as long as 25 years.
"I’m definitely going to keep chasing it. It’s good work," Pavkovic said. "Once you start working for these companies, they help you in so many ways."
He said contractors help set up tooling and machines.
"They really are out to help you," he said. "I would like to see more contracts in military and other fields other than automotive.
"It’s good money. I would say it’s better than automotive."