General Motors (GM, Financial) is now aiming to expand its engineering base in Canada.
The company said it would be creating around 1,000 jobs over the next two years in Ontario, where it proposes to carry out its research work on connected and driverless technology. The automaker plans to pour in $10 million in Kapuskasing, Ontario's cold-weather facility where tests on new products would be conducted.
General Motors' statement comes amid rising worries about the fate of the Detroit automaker’s last two assembly facilities in Oshawa in Southern Ontario. Ontario has been one of the key auto hubs for global carmakers such as General Motors, Ford (F, Financial), Chrysler (FIATY, Financial), Honda (HMC, Financial) and Toyota (TM, Financial). However, in recent years the auto industry in Canada has been falling behind Mexico and Southern U.S. states where automakers are opening manufacturing hubs and producing vehicles at much lower costs.
Here’s a rundown on General Motors’ plan for its Canadian operation.
GM aims for Canada expansion
Canada has been losing ground and facing difficulties in attracting innovation and investments. However, General Motors’ plan to invest in the country comes as good news for the auto sector. Mark Reuss, executive vice president of General Motors, said, “We selected Canada for this expansion because of its clear capacity for innovation, proven talent and strong ecosystem of great universities, startups and innovative suppliers.”
General Motors will be focusing on autonomous vehicle technology, controls development, wireless connected technology, active safety and infotainment in its Canadian facility. These technologies can be applied in any of the 10 million vehicles the company manufactures each year worldwide. This is going to be a big drive in the development of autonomous cars in Canada.
Earlier during the year General Motors Canada had opened its 2908 at Communitech innovation lab in Waterloo, Ontario to carry out its work on smartphone application, ride-sharing services as well as develop ideas for urban and public transit. Ontario is, in fact, the first major region to permit on-road testing of autonomous vehicles.
Mayor Frank Scarpitti said, “We are very proud of Markham’s status as Canada’s high-tech capital and thrilled that the new General Motors’ R&D center is coming to Markham.” With more than "1,100 high-tech and life sciences companies, our city is an ideal location for this new center for information technology and automotive innovation."
Moreover, in April this year, General Motors announced that it purchased a portion of land in Southeastern Toronto. The carmaker will open and lay the foundation for a new urban mobility campus that would comprise offices and research and development facilities along with a provision for a space selling electric vehicles.
Driving toward autonomy
According to auto experts, semi-automated vehicles are expected to hit the roads and be widely popular in a decade followed by the arrival of fully autonomous vehicles in a few years. In May,  Property and Casualty Insurance Compensation Corporation President and CEO Paul Kovacs said at a research forum that the advent of groundbreaking technology combined with the transformation of the auto insurance industry is going to change the auto world drastically.
General Motors has made enormous investment in building this future technology. The company acquired Cruise Automation, a San Francisco-based startup firm that develops autonomous vehicle technology, in a billion-dollar deal. Cruise Automation is a 3-year old company employing 40 people. This is a strategic move undertaken by General Motors to help it take on the likes of Alphabet (GOOG, Financial), Apple (AAPL, Financial) and Tesla (TSLA, Financial), also investing in driverless technology. The company’s move to invest in Canada is also in line with its long-term plan in the development of autonomous technology.
Disclosure: I have no positions in any stocks mentioned in this article.
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