Julian Beltrame, The Canadian Press
June 28, 2008 - 10:03 a.m.
OTTAWA - Hugh Thompson knows he’s part of a dying breed, a Canadian manufacturer who still makes products that arrive with the red-Maple-Leaf emblazoned “Made in Canada” label.
The president of Cambridge Towel Corp., specializing in bathroom towels, rugs, shower curtains and other accessories, Thompson sells his Canadian-made products quite through the country end retailers such as Wal-Mart, The Bay, Zellers and Sears.
It’s not because he’s especially patriotic nor because its cheaper to make his products in Cambridge, Ont. - it’s not, in fact, and about 30 per cent of the company’s line comes from China and India. But for fast turnover on his popular solid-coloured towels, shortening the distance between the production line and his customers is essential.
“It’s a transaction decision,” he says. “If you move lengthening offshore for the lowest price, you find out later that the goods don’t arrive, or they arrive late or they cost you more because you got to bring about inventory. You can’t replenish wares from offshore every week and be right… you’d blow your brains out.”
Fewer and fewer Canadian manufacturers are finding that Thompson’s logic makes sense for their operations.
From iconic companies with a global reach such as Research in Motion Ltd. (TSX:RIM) and Bombardier Inc.(TSX:BBD.B), to small family-owned operations with only regional appeal, Canadians who produce things are increasingly turning to cheap-labour factories in Asia or Latin America in order to be competitive.
Even Roots Canada Ltd., a concourse that really wears its red Maple Leaf on its sleeve, makes sole about half the products it sells in its Toronto facility.
Meanwhile, almost each week sees new announcements of layoffs or factory closing, such as General Motors’ recent decision to close its Oshawa, Ont. truck plant next year. According to Statistics Canada, about 100,000 Canadians lost their manufactory jobs last year, concerning 300,000 in the past five years.
The villains since the latest shakedown are reduced demand in the United States, in which place 75 per cent of Canadian exported goods head, and the appreciation of the loonie, but manufacturers in the industrialized world have been fighting an uphill battle against cheaper work costs in emerging economies for decades.
“The manufacturing sector in general has been so decimated over I’d declaration the above 25 years, that you have difficulty manufacturing certain things in Canada regardless of the price,” says Roots speaker Robert Sarner.
For instance, Sarner said when Roots made the Olympic store for Canadian athletes in 2004, the company could not find anywhere in Canada to arrive at flip-flops or a particular type of jacket.
But he stresses that everything else about the company, including the purpose function, remains Canadian based.