Canadian Automotive Industry Boosted
Published: March 16, 2016
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Industry News
The Canadian automotive industry has been given the boost in the form of a C$2.5mn revolving credit facility from Export Development Canada (EDC), with the facility handed to Linear Transfer Automation.
The industry in the country is entirely manufacturing based with contractors making parts form automotive companies that are not actually based in Canada. Linear Transfer Automation is one such manufacturer and the funding from the EDC will be used for the company to handle large outsources contracts, from the likes of Nissan, General Motors, Ford, Honda and Daimler.
The Barrie, Ontario based company said the funding will help to create 10 new jobs among its workforce, which currently consists of 80 people.
EDC has worked with Linear Transfer Automation before, providing credit insurance to the company and also adding bonding support through a transaction in Mexico a decade ago. The company says support from the EDC has been important for growth, allowing Linear Transfer to secure more international customers.
“EDC has even indirectly helped us by providing working capital financing to one of our customers,” says Rama Jayaweera, the company’s president and general manager. “By doing so, it was easier for our customer to buy two of our tandem press systems that we exported to the US.”
“Our sales are ever-increasing and now span all of North America and around the world,” he adds.
The company has sales offices in the US, Mexico, Brazil, the UK, China, and Thailand.
“Linear Transfer has already accomplished the hard part, which is establishing itself in global supply chains of major multinational corporations,” says Carl Burlock, senior vice-president, financing and investment, EDC.
The Canadian automotive industry has been moving through turbulent waters in recent months, since the TPP deal drawn up between former Prime Minister Stephen Harper and other Pacific Rim nations late last year.
The Trans Pacific Partnership means that car manufacturers can now export parts to Canada, meaning cheaper companies from Asia can compete against Canadian companies.
“We got worse terms on key parts than we were originally told,” Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, said at the time of the agreement closing.
“It’s a real exposure. Those were categories flagged by us to the government and they didn’t protect them as a priority.”