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BUFFALO—Canadian manufacturers looking to overcome the hurdle that is the Buy American Act are looking no further than Western New York to expand their operations—and their bottom lines.
From new facilities to retrofits, manufacturers are beginning to make their second—or in some cases only—homes just across the Canada-U.S. border as they look to take advantage of a number of perks that make the Buffalo-Niagara area an attractive place to do business.
Crossing the Peace Bridge into the Empire State, it’s hard to ignore the region’s industrial past—mainly because most of it is still there; buildings frozen in time as companies closed up shop over the years.
Derelict warehouses, abandoned grain elevators and former steel sites pepper the region, remnants of days gone by; reminders of the industry that once was during the booming years leading up to the 1950s.
But as Canadian manufacturers look to shed procurement impediments and the stigma of being from “way up there” in Canada, they are taking advantage of the unused space and talent pool available to them just across the border while remaining close to home.
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“There’s no way Canada could compete labour-cost wise with Mexico, that’s a non-starter,” said Faria. “But we need to be more competitive with labour costs in the US, because the US is getting a lot of new automotive investment; Canada is not.”
It costs a unionized car company $35 an hour in direct cost to employ an auto worker in Canada, or about $67/hr with benefits – figures that amount to $28/hr and $56/hr for a Detroit Three plant in the U.S., Faria said.
The US wage is one automakers perceive as more reasonable, he added, and they are showing it by investing in American plants.
The UAW pay scale includes a second-tier wage rate, which brings newer workers in at a lower rate, a move the Canadian Auto Workers union, now called Unifor, declined to do.
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