Be more productive, manufacturers urgedSurrette says it takes effort to overcome ‘Canadian shyness’By BRUCE ERSKINE Business Reporter
Increased productivity is critical to success in the manufacturing sector, says James Surrette, president of Surrette Battery Co. Ltd. of Springhill. "The strategy we’ve taken is to try to increase our productivity as much as possible," he said during a panel discussion in Halifax on Wednesday after the release of a Grant Thornton LLP report on the state of Canadian manufacturing."If we look at our competitors, they’re either in low-cost states in the United States, or Mexico, or coming in from Asia now, and if we try to compete purely by one-to-one labour force, we’ll lose."Surrette, Canada’s only independent battery manufacturer, makes batteries used for rail, marine and emergency applications. The company’s primary market is the United States, but it also exports to Europe, where Mr. Surrette said it has done well, despite some uncertainty that a small Nova Scotia firm with 60 employees could compete there."You mentioned the Canadian shyness, for lack of a better term, we suffered that," he said, responding to a question from moderator Andrea Mandel-Campbell, author of Why Mexicans Don’t Drink Molson, who argues that Canada lacks a deep-seated trading culture and that Canadian businesses are hesitant to explore new global opportunities."They have competed by being cheap, relying on a cheap dollar, cheap salaries and being, in essence, Mexicans with sweaters," she said. "The problem with that strategy is in an era of globalization, staying home and being cheap is a losing proposition because someone is always cheaper than you and it really doesn’t matter anymore if they’re half a world away."Mr. Surrette said it took a lot of work to overcome that shyness and develop the European market, but he noted that Nova Scotia and Canada have advantages which helped facilitate that growth."This natural gateway that we have in Halifax, shipping into Europe, lead times are relatively short," he said, adding that his firm also capitalized on Canada’s positive reputation with its European partners. "I was very shocked when they sent me some of the ads that they ran on their own, which included this massive Canadian flag."Canada’s manufacturing sector has lost 224,000 jobs since 2002, due partly to the strong Canadian dollar and a manufacturing shift to low-cost countries like Mexico and China.In Nova Scotia, those impacts have been seen in the recently announced closures of Hershey’s Moirs plant in Dartmouth, which will result in 580 job losses, and the TrentonWorks rail plant, which most recently employed 300 people.Jim Copeland of Grant Thornton said Canadian manufacturers need to embrace innovation and develop a global outlook to meet the challenges of the new industrial age."Manufacturers and distributors must embrace improvement methodologies as a means to reduce costs and improve productivity," he said, adding that globalization must be seen as an opportunity, not a threat. "Importing, outsourcing, off-shoring can present significant benefits to manufacturers and distributors."Peter Kohler, president of Kohltech International Ltd. of Debert, a window manufacturer that employs 300 people and exports to the United States, said his firm is using its ability to respond quickly to consumer demand to offset the impact of the strong Canadian dollar."We are very nimble and we can offer some stuff that larger companies really don’t want to or can’t."Despite the challenges facing the manufacturing sector, the Grant Thornton report found that 88 per cent of mid-sized manufacturers and distributors in Atlantic Canada are optimistic about Canada’s economic outlook, compared to 74 per cent in Western Canada, 65 per cent in Quebec and 53 per cent in Ontario.( berskine@herald.ca)
"The strategy we’ve taken is to try to increase our productivity as much as possible," he said during a panel discussion in Halifax on Wednesday after the release of a Grant Thornton LLP report on the state of Canadian manufacturing.
"If we look at our competitors, they’re either in low-cost states in the United States, or Mexico, or coming in from Asia now, and if we try to compete purely by one-to-one labour force, we’ll lose."
Surrette, Canada’s only independent battery manufacturer, makes batteries used for rail, marine and emergency applications.
The company’s primary market is the United States, but it also exports to Europe, where Mr. Surrette said it has done well, despite some uncertainty that a small Nova Scotia firm with 60 employees could compete there.
"You mentioned the Canadian shyness, for lack of a better term, we suffered that," he said, responding to a question from moderator Andrea Mandel-Campbell, author of Why Mexicans Don’t Drink Molson, who argues that Canada lacks a deep-seated trading culture and that Canadian businesses are hesitant to explore new global opportunities.
"They have competed by being cheap, relying on a cheap dollar, cheap salaries and being, in essence, Mexicans with sweaters," she said. "The problem with that strategy is in an era of globalization, staying home and being cheap is a losing proposition because someone is always cheaper than you and it really doesn’t matter anymore if they’re half a world away."
Mr. Surrette said it took a lot of work to overcome that shyness and develop the European market, but he noted that Nova Scotia and Canada have advantages which helped facilitate that growth.
"This natural gateway that we have in Halifax, shipping into Europe, lead times are relatively short," he said, adding that his firm also capitalized on Canada’s positive reputation with its European partners. "I was very shocked when they sent me some of the ads that they ran on their own, which included this massive Canadian flag."
Canada’s manufacturing sector has lost 224,000 jobs since 2002, due partly to the strong Canadian dollar and a manufacturing shift to low-cost countries like Mexico and China.
In Nova Scotia, those impacts have been seen in the recently announced closures of Hershey’s Moirs plant in Dartmouth, which will result in 580 job losses, and the TrentonWorks rail plant, which most recently employed 300 people.
Jim Copeland of Grant Thornton said Canadian manufacturers need to embrace innovation and develop a global outlook to meet the challenges of the new industrial age.
"Manufacturers and distributors must embrace improvement methodologies as a means to reduce costs and improve productivity," he said, adding that globalization must be seen as an opportunity, not a threat. "Importing, outsourcing, off-shoring can present significant benefits to manufacturers and distributors."
Peter Kohler, president of Kohltech International Ltd. of Debert, a window manufacturer that employs 300 people and exports to the United States, said his firm is using its ability to respond quickly to consumer demand to offset the impact of the strong Canadian dollar.
"We are very nimble and we can offer some stuff that larger companies really don’t want to or can’t."
Despite the challenges facing the manufacturing sector, the Grant Thornton report found that 88 per cent of mid-sized manufacturers and distributors in Atlantic Canada are optimistic about Canada’s economic outlook, compared to 74 per cent in Western Canada, 65 per cent in Quebec and 53 per cent in Ontario.
( berskine@herald.ca)