Celestica CEO Craig Muhlhauser suggests the rumours that Canada’s manufacturing industry is dead are only that—rumours.
Rapid development of Alberta’s energy industry has attracted the attention of heavy equipment manufacturers from around the world. For Edmonton-based Weldco this attention has led to an influx of competitors from countries with lower tax rates and lower labour costs.
While not much can be done about Canada’s higher tax rates, Weldco president Doug Schindel is quick to point out that being a Canadian company has huge benefits. Canada’s strong social safety net, well-regulated banking system, good education system, and high standard of living are benefits that his company is using to improve its international competitiveness.
“I don’t think there are cons to manufacturing in this country. There are challenges but the opportunities far outweigh those and that is why we are here,” Schindel said.
The strategy: Among Weldco’s strategies is concentrating on human resources and recruitment. One tool it uses for recruitment and training is to pay for training for any employee so long as the training is related to the work. “They pay the tuition fees up front,” Schindel said. “They pass it, bring us their report card as such, and we reimburse them for it.”
Weldco has also invested directly in education by contributing to a $3-million endowment to establish the Weldco/Industry Chair in Welding and Joining in the University of Alberta’s Department of Chemical and Materials Engineering. “It is, the current chair tells me, if not the best lab in the world, it’s certainly up there with the top three or four,” Schindel said.
Another organization that Weldco utilizes is Woman Building Futures, a non-profit that provides training for disadvantaged women. Schindel sees such womanpower as a way to address Alberta’s looming manpower shortage in the trades – projected to reach 77,000 positions by 2019.
“You have to plan to reduce the average age in your shop,” Schindel said. “Don’t let it get away with you. It’s an easy thing to do when you’ve got a lot of skilled people who’ve been with you for a long time.” Weldco also focuses attention on products that will do well in the marketplace. That includes creating value-added products such as cranes. “So we have to look very seriously at raising the bar and building things that not everybody can build,” Schindel says. “I can’t build a crane in my backyard.”
Making safety the top priority is “not just a poster” at Weldco, Swindel said, noting that an employee who put production ahead of safety is no longer with the company. Planned safety processes are more efficient and reduce costly lost-time accidents. “Productivity will increase in safe surroundings when the people do not have to be worried about something that’s going to fall on them or hit them from the side,” he said.
The results: While the company is down from 600 employees at its peak in 2006, business has turned around dramatically in the last 12 months. “And certainly our crane bookings for the coming year are like I haven’t seen them like we started [in the crane] business 15 or 16 years ago,” Schindel said. The rest of the business is also going strongly, particularly in Fort McMurray, which is benefiting from high oil prices.
The future: When the next boom comes, Schindel expects the company will again take advantage of the federal government’s foreign worker program to help with the skills shortage. The company will also continue to apply for federal research and development tax credits for its complex non-standard engineered design programs. “If you’re in the manufacturing business at all and you haven’t explored them, I’d highly suggest that you do.”
Focusing on innovation and cost-reduction are keys to succeeding in a global marketplace, Swindel says. “Global competition doesn’t mean you have to be selling in another country. Global competition is now coming to us. So if we think that our market is being protected any more, it’s not.”