A weakening of the Canadian dollar that’s perceived to be long term would bolster the country’s auto industry, the head of Magna International Inc. said.
“The real issue for the auto industry is where do the car companies think it’s going to be long term,” Don Walker, 57, chief executive officer of Magna, North America’s largest auto parts maker by sales, said at the Bloomberg Canada Economic Summit in Toronto today. “At 85 cents, we’re already winning business in the Canadian plants. At this level we can be competitive.”
Canada’s manufacturing industry has lost almost 600,000 manufacturing jobs over the past 10 years, a decline of 25 percent, as the country’s currency surged and countries like Mexico and China became more competitive.
The currency rose to a peak of about $1.10 in 2007 from a low of about 62 U.S. cents in 2002 and was quoted at 91.64 U.S. cents at 3:04 p.m. in Toronto today.
Magna has surged about six-fold in the past five years, compared with a 51 percent gain in the Standard & Poor’s/TSX Composite index as global auto sales rebounded from the recession and the company added plants in cheaper locales including Mexico.
The entire Canadian economy is structured on a 80 to 85 U.S. dollar, said Jerry Dias, national president of Unifor, Canada’s largest private sector union with more than 300,000 members.
“It’s really how our economy has been structured,” Dias said at the summit.