2011 Year in Review: Canada

Highlights of the year’s major events in Canada:

• A tsunami triggered by a March 11 earthquake in Japan sends shock waves that disrupt Honda and Toyota production in Canada, ultimately slowing sales. Some seven months later, both auto makers still were reporting double-digit year-over-year declines.

• Colorful Magna founder and Canadian industry icon Frank Stronach announces April 1 that he is stepping down as chairman of the global parts maker. The 78-year-old Stronach, whose vision catapulted him from a backyard Toronto tool shop in 1957 to head of a multi billion-dollar company with 96,000 employees worldwide, says he wants to devote himself to E-Car Systems.

Stronach spun off the electric-vehicle company from Magna in 2010. He is succeeded as chairman by Magna board member and former Ontario premier Mike Harris.

• Some 283,000 Honda Canada customers are compromised after a security breach. Names, addresses, vehicle-identification numbers and finance account numbers are among the information that is stolen, the auto maker says. The data was collected in 2009 when Honda and Acura owners were urged to register at the myHonda and myAcura websites.

• Honda announces its plant in Alliston, ON, will produce the Honda CR-V cross/utility vehicle starting in 2012. The action displaces production of the Acura MDX and RDX CUVs, which move to Honda’s plants in Lincoln, AL, and Marysville, OH, respectively. Alliston also builds Honda Civics, as well as the Canada-only, Civic-based Acura CSX.

• Chrysler Canada President and CEO Reid Bigland adds two new assignments to his portfolio as the auto maker shakes up its management structure. Bigland is named head of U.S. sales and president and CEO of the Dodge brand. David Buckingham, formerly vice president-sales under Bigland, is named to the newly created post of chief operating officer-Chrysler Canada.

• Canadian businesses end the second quarter with their worst labor productivity in five years. Japan’s tsunami and earthquake combine with wildfires in western Canada to prompt a 0.9% shortfall in productivity, according to Statistics Canada.

Toyota RAV4 EV production destined for Woodstock, ON.

• Fiat in July pays the Canadian federal and Ontario provincial governments C$150 million ($156 million) for their remaining stake in Chrysler. The move, which makes Fiat majority owner of the auto maker, comes some eight weeks after Chrysler repays taxpayer-funded loans issued by the governments of Canada and Ontario.

The loans, along with assistance from the U.S. Treasury Department, helped rescue Chrysler from bankruptcy in 2009. The Canadian governments provided Chrysler with C$2.9 billion ($3.6 billion) in aid.

• Toyota Motor North America Senior Vice President Ray Tanguay tells WardsAuto in August the much-anticipated all-electric version of its RAV4 CUV will be produced in Ontario. Toyota later says it will invest C$506 million ($516 million) to accommodate the move. By November, prototypes begin rolling off the line at Toyota’s plant in Woodstock, ON. It is Toyota’s first electric vehicle produced outside Japan.

The governments of Canada and Ontario each promise up to C$70.8 million ($72.2 million) in loans to support the venture, a joint project with California-based EV maker, Tesla Motors. The RAV4 EV is produced on the same line as the gas-powered model. Tesla is supplying the battery, motor, gearbox and power electronics.

Special Coverage

State of Industry: North America

• Johnson Controls and the Canadian Auto Workers union reach a tentative agreement for employees of the supplier’s plant in Whitby, ON. The deal averts a strike that would have had repercussions for General Motors’ assembly site in nearby Oshawa, ON. The GM plant is home to the Chevrolet Impala and the hot-selling Chevrolet Camaro. Johnson Controls’ Whitby plant supplies door pads, floor consoles and seats to Oshawa.

• An era ends with the September closure of Ford’s assembly plant in St. Thomas, ON. Over its 44-year lifetime, the site was home to vehicles such as the Mercury Grand Marquis and Lincoln Town Car. However, the Ford Crown Victoria, staple of police departments and taxi fleets, accounted for most of the plant’s output.

Special Coverage

2011 Year In Review

• A surge in energy exports helps Canada post a trade surplus in September, its first since January. The move prompted analysts to forecast third-quarter growth for the Canadian economy – welcome news to the auto industry, which has seen a malaise spread from inventory-strapped Honda and Toyota to other auto makers.

September is the market’s third consecutive month of year-over year sales declines. Of the six auto makers with the highest shares in the month, four recorded sales declines. They are: Honda, -18.7%; General Motors, -6.1%; Toyota, -5.2% and Ford, -4.7%.

• Canada-based Toronto Dominion Bank forms TD Auto Finance to replace Chrysler Financial, which it acquired from the auto maker’s pre-bankruptcy owner, Cerberus Capital Management.

• The October rollout of the Chevrolet Orlando CUV adds another nameplate to an exclusive collection – vehicles sold in Canada but not the U.S. GM says the 7-passenger people-mover will resonate with prudent Canadian consumers, but the auto maker fears American consumers would regard it as a compromise. Smaller than a conventional minivan, the Orlando is expected to compete directly with the Mazda5.

• General Motors receives court approval in November to transfer supplemental retiree health-care expenses to a trust similar to one it uses to support U.S. retirees. The Canadian Auto Workers union says GM will establish the trust with an initial C$1 billion ($957 million) payment, followed by more than C$2.5 billion ($2.4 billion) in contributions over seven years.

Magna founder Frank Stronach steps down as chairman.

• Beleaguered Honda says in November it will vary production rates at its plant in Alliston, ON, to cope with supply-chain disruptions caused by widespread flooding in Thailand. However, launch timing for the next-generation CR-V CUV is unaffected, the auto maker says. The varying production schedule also applies to Honda’s U.S. plants.

Through third-quarter, the auto maker’s North American output totaled 755,939 units, lagging like-2010 by 19.4%. Highlighting the shortfall’s impact, Honda says 87% of the vehicles it sold last year in the U.S. were assembled in North America.

• A Canadian researcher gets credit for cutting through the bull, saying he’s developed a process to produce plastic car parts from banned cattle parts. David Bressler, an associate professor at the University of Alberta, applies for patents on a thermal process used to extract vital protein from the throwaway parts of beef carcasses. Skulls, brains, eyes, tonsils and spinal cords of cattle are banned from the food chain in response to Canada’s Mad Cow Disease outbreak in 2003.

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