Ontario, Michigan sign deal calling for more integration of auto sectors

Ontario and Michigan have signed an agreement to work together to promote the auto sector, a vital part of both their economies.

Premier Kathleen Wynne and Michigan Gov. Rick Snyder signed a memorandum of understanding Wednesday that they said would promote innovation and regional competitiveness in the auto industry.

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"Sharing best practices and integrating our supply chains will advance Michigan's and Ontario's positions as leaders in the auto industry," Snyder said after signing the deal with Wynne in Traverse City, Mich.

"This is an opportunity to strengthen the bonds (between the state and province) in all capacities, in addition to automotive."

Shared interests

Ontario and Michigan compete "from time to time," said Wynne, but they also have a shared interest in protecting the Great Lakes "cluster" of automotive production so it can compete with other clusters in the southern U.S and Mexico.

"We are not going to be Mexico," Wynne said. "We are the Great Lakes cluster. We need to find our niche. What is it that we do best? What are the factors at play in our region that give us an advantage?"

Employers say the biggest advantage in the region is its educated workforce, said Wynne.

"It's that supply chain of people that really draws them to us," she said. "So, we better make sure we keep that advantage."

Ontario and Michigan will create a working group to look at areas for increased collaboration that would help them both compete, such as Internet-connected cars, self-driving vehicles, lightweight materials and alternative fuels.

"We're better off if we can share expertise and support each other, and it's the region that's really competing with the globe in auto," said Wynne. "The work is going to start right away, and we're going to be looking for very concrete successes coming out of this memorandum of understanding."

The working group will also look at increasing supply chain integration and technology transfer between Ontario and Michigan's auto sectors through business-to-business partnerships.

High-tech job growth

Auto assembly plants use more robotics than in the past and need fewer but more highly skilled workers, and growth in the sector will be in the high-tech jobs, said Snyder.

"There's been a great re-concentration of research and development in Michigan, really in the Great Lakes cluster, and you don't hear about research and development in Mexico like you do in the Great Lakes," he said.

The agreement with Michigan will boost regional competitiveness and "create new opportunities for investment, jobs and growth on both sides of the border," said Wynne

"This is not, from either of our perspectives, about a hollow, academic process," she said. "This is about actually getting things done and finding ways to work together."

Snyder predicted the deal will lead to economic growth and job creation in both Ontario and Michigan.

Two-way trade between Ontario and Michigan totalled $74 billion in 2015