[kEiThZ]

Just to provide some figures: the German automobile sector accounts for 5% of GDP, but represents 19% of gross value added. It has recently promised subsidies worth 902 million Euros (C$1.3 billion) to have a a Swedish battery maker built his plant in Germany and not the US and 9.9 billion Euros (C$14.5 billion) to have Intel build a semiconductor factory in Germany, as well as 5 billion Euros ($7.3 billion) to TSMC to do the same.

In short: Germany, with an Economy approximately twice as large as Canada, is spending about twice as much to host high tech plants…

So what you're saying is that it's not the apparent highly vaunted training that is attracting investment to Germany, but exactly the kind of subsidies and industrial policy that some here are criticizing?

I'm shocked I tell ya. I thought it was all these super-apprentices.

 

[Frank_Lee]

Just to provide some figures: the German automobile sector accounts for 5% of GDP, but represents 19% of gross value added. It has recently promised subsidies worth 902 million Euros (C$1.3 billion) to have a a Swedish battery maker built his plant in Germany and not the US and 9.9 billion Euros (C$14.5 billion) to have Intel build a semiconductor factory in Germany, as well as 5 billion Euros ($7.3 billion) to TSMC to do the same.

In short: Germany, with an Economy approximately twice as large as Canada, is spending about twice as much to host high tech plants…

I think the 19% figure is for Automotive's share of Manufacturing's value added (which is about 25-30% of the German total). The differences between value added and GDP reflect tariffs and subsidies for the most part, which are not order of magnitude factors in general. I suspect the 19% figure is for total turnover (i.e. Revenue) of German industry. The issue with that is that a large fraction of the value added is captured outside Germany in Austria, Hungary, Poland, etc. by automotive suppliers and subsidiaries, as I'm sure you well know.

2020 is the most recent year for which I could find figures at the European statistical office (https://ec.europa.eu/eurostat/databrowser/view/sbs_na_ind_r2__custom_9467276/default/table?lang=en). Using 2019 to avoid the effects of the pandemic, conservatively using category C29, which includes the value added from production of commercial vehicles, I get about 107 billion euros. For manufacturing as a whole (C2) I get 658 billion euros in 2019. 107/658 = 16.2%.

 

[kEiThZ]

Should you re-read my post you will note I merely said "tech". Even low tech with sufficiently dense and/or complex wiring paths increases the cost of mid-life refits. It doesn't need to be a missile guidance system to need careful work and protection from leaks/spills/impacts.

Sure. But not sure what the relevance is to tangent of manufacturing employment.

The only way the government could make the argument to "invest" in Canadian rail coach building would be if Via and other rail companies were in a state of growth and expansion.

We are going through a massive amount of transit investment right now. There's lots of rail vehicles being made in Canada. But how much of that has translated into rail vehicle construction jobs in Canada?

 

[kEiThZ]

I think the 19% figure is for Automotive's share of Manufacturing's value added (which is about 25-30% of the German total). The differences between value added and GDP reflect tariffs and subsidies for the most part, which are not order of magnitude factors in general. I suspect the 19% figure is for total turnover (i.e. Revenue) of German industry. The issue with that is that a large fraction of the value added is captured outside Germany in Austria, Hungary, Poland, etc. by automotive suppliers and subsidiaries, as I'm sure you well know.

2020 is the most recent year for which I could find figures at the European statistical office (https://ec.europa.eu/eurostat/databrowser/view/sbs_na_ind_r2__custom_9467276/default/table?lang=en). Using 2019 to avoid the effects of the pandemic, conservatively using category C29, which includes the value added from production of commercial vehicles, I get about 107 billion euros. For manufacturing as a whole (C2) I get 658 billion euros in 2019. 107/658 = 16.2%.

When you're quibbling over whether it's 19% or 16%, you're losing the forest for the trees. What is the comparable number for Canada?

The point here is that they are highly dependent on auto manufacturing for both their GDP and well paying employment. And they are engaging in exactly the sort of subsidy practices that you are criticizing here. And we're not even going to discuss the insane protectionism that Germany forces on the entire EU economy to protect their auto sector. Why do you cheer it on there but then argue Canadians should have to compete without the same?

 

[Frank_Lee]

When you're quibbling over whether it's 19% or 16%, you're losing the forest for the trees. What is comparable number for Canada?

The point here is that they are highly dependent on auto manufacturing for both their GDP and well paying employment. And they are engaging in exactly the sort of subsidy practices that you are criticizing here. And we're not even going to discuss the insane protectionism that Germany forces on the entire EU economy to protect their auto sector.

5% is the important number. Even the industry association claims it's around 800,000 jobs, which is big, to be sure ( https://www.gtai.de/resource/blob/6...172cd823a0ec0e/20220711_IO_Automotive_WEB.pdf), but around 11% of total manufacturing employment (7.5 million).

I agree on the latter point.

Fact is, though, we ought to invest in a passenger rail system and support it long term to develop the engineering and manufacturing base for building the physical infrastructure and the rolling stock over the long term. That's probably asking too much of any Canadian government, though.

 

[micheal_can]

We are going through a massive amount of transit investment right now. There's lots of rail vehicles being made in Canada. But how much of that has translated into rail vehicle construction jobs in Canada?

I know of those LRVs that are being built.I do not know the particulars of the jobs it has created, but, this is the kind of situation we need for heavy rail intercity coaches to be built here. From the start of construction of the first LRV off the line to the end of the last one, there is a good chance that it will be at least 20 years of work. The Siemens trains are what, 10 years at the most? A plant lasting 20+ years is a good investment.

My desire for expansion and frequency improvements are not just because "I like trains" or "I want to ride a train". It has more to do with what the investment can mean for the sector.160 cars is not much to support the sector. But,in the case of GO, 979 of the 1500 produced is a great way to support the market. Interesting, if Via were to replace its entire LDF, that is about 450, so doubling it to increase frequency is around the number of coaches that GO has. So, the best way to support a heavy rail intercity coach builder is to invest in Via.

 

[crs1026]

We are going through a massive amount of transit investment right now. There's lots of rail vehicles being made in Canada. But how much of that has translated into rail vehicle construction jobs in Canada?

It's a foamer thing to focus on the rail vehicles. They are a lesser part of the investment that happens in transit construction. And it's a very tough business to stay in, even if you have a good product there is only so much demand. Virtually every country places build-local rules on their RFP's so there isn't any real export of railcars, although there may be component manufacture for export.

However - *building* transit has enabled Canada to develop its share of engineering and construction expertise, which it is able to market worldwide... but... we don't necessarily want to brag about that after a scandal or two. I'm not sure Canada has the ability to swallow our principles and compete in this market internationally. And where Canadian expertise does land transit contracts in other countries, the work is done, well, somewhere else. Great if you are a professional who is eager to work overseas, less helpful if you want a job in your home town.

- Paul

 

[micheal_can]

It's a foamer thing to focus on the rail vehicles. They are a lesser part of the investment that happens in transit construction. And it's a very tough business to stay in, even if you have a good product there is only so much demand. Virtually every country places build-local rules on their RFP's so there isn't any real export of railcars, although there may be component manufacture for export.

However - *building* transit has enabled Canada to develop its share of engineering and construction expertise, which it is able to market worldwide... but... we don't necessarily want to brag about that after a scandal or two. I'm not sure Canada has the ability to swallow our principles and compete in this market internationally. And where Canadian expertise does land transit contracts in other countries, the work is done, well, somewhere else. Great if you are a professional who is eager to work overseas, less helpful if you want a job in your home town.

- Paul

You should talk to the ones working in Thunder Bay. You know, the place where Bilevels get built and not just for GO, WCE or EXO. This is a case of missing the forest for the trees.

 

[crs1026]

You should talk to the ones working in Thunder Bay. You know, the place where Bilevels get built and not just for GO, WCE or EXO. This is a case of missing the forest for the trees.

The UTDC bilevel is relatively successful, but the numbers are roughly 1,600 units produced over 35 years with two thirds of these going to Ontario. A good deal in the sense that GO kept its purchasing in Ontario - but 500 “export” cars over 35 years is no huge impact on the market.
If you compare that to the number of auto parts that are manufactured year after year in Ontario feeding into auto plant production in Canada and the US, without taking a position on any particular handout, we are smarter to put our business development into autos as opposed to railway manufacturing.

- Paul

 

[Urban Sky]

I think the 19% figure is for Automotive's share of Manufacturing's value added (which is about 25-30% of the German total). The differences between value added and GDP reflect tariffs and subsidies for the most part, which are not order of magnitude factors in general. I suspect the 19% figure is for total turnover (i.e. Revenue) of German industry. The issue with that is that a large fraction of the value added is captured outside Germany in Austria, Hungary, Poland, etc. by automotive suppliers and subsidiaries, as I'm sure you well know.

2020 is the most recent year for which I could find figures at the European statistical office (https://ec.europa.eu/eurostat/databrowser/view/sbs_na_ind_r2__custom_9467276/default/table?lang=en). Using 2019 to avoid the effects of the pandemic, conservatively using category C29, which includes the value added from production of commercial vehicles, I get about 107 billion euros. For manufacturing as a whole (C2) I get 658 billion euros in 2019. 107/658 = 16.2%.

Okay, let’s try another (though very similar) figure then: Cars and car parts represent 16% of Germany’s exports by value…

 

[micheal_can]

The UTDC bilevel is relatively successful, but the numbers are roughly 1,600 units produced over 35 years with two thirds of these going to Ontario. A good deal in the sense that GO kept its purchasing in Ontario - but 500 “export” cars over 35 years is no huge impact on the market.
If you compare that to the number of auto parts that are manufactured year after year in Ontario feeding into auto plant production in Canada and the US, without taking a position on any particular handout, we are smarter to put our business development into autos as opposed to railway manufacturing.

- Paul

This is not about where we should put it, but how it needs to be put if we want it there. Our auto sector is heavily subsidized. My thinking is that private enterprise that caters to private citizens shouldn't need to be subsidized..They are, and that is where we are at. Public enterprise, like rolling stock for public owned entities obviously are subsidized and their operations should be within the general jurisdiction that is subsidizing it. This is why, even though it may be more expensive, I am all for having things like our shipbuilding program for the Coast Guard and Navy be in Canada.However, for the ~140 Siemens cars, I do feel having the built in the USA is ok. Would be better if they weren't, but we do not have the future orders to support them being built in Canada. The LDF replacement, there might be enough of a case for them to be built in Canada.

 

[kEiThZ]

It's a foamer thing to focus on the rail vehicles. They are a lesser part of the investment that happens in transit construction.

It's the relevant comparison because you can't replace auto manufacturing jobs with construction jobs on the other side of the country. And this whole thread of discussion started off with the argument that we should simply cut cheques for a $16B rolling stock plant instead. I'm not even sure if all the passenger rail rolling stock in the whole country is worth $16B combined.

However - *building* transit has enabled Canada to develop its share of engineering and construction expertise, which it is able to market worldwide... but... we don't necessarily want to brag about that after a scandal or two.

Sure. But construction engineering and rolling stock manufacturing are different skill sets.

 

[kEiThZ]

The LDF replacement, there might be enough of a case for them to be built in Canada.

Anything can be built anywhere for a price. Siemens will assemble the trains in Canada for a substantial premium if we want. So ask yourself where that extra money will come from and if it's worthwhile for a few hundred jobs lasting only a few years.

And these jobs would barely be a rounding error compared to the >136k in Ontario sustained by auto manufacturing.

 

[micheal_can]

Anything can be built anywhere for a price. Siemens will assemble the trains in Canada for a substantial premium if we want. So ask yourself where that extra money will come from and if it's worthwhile for a few hundred jobs lasting only a few years.

And these jobs would barely be a rounding error compared to the > 100k in Ontario sustained by auto manufacturing.

The jobs would be on par with any other manufacturing plant. Whether it is worthwhile is a discussion left for the politicians trying to get elected. That is why they do it. They want to show that they care by throwing money at something.

 

[kEiThZ]

I agree on the latter point.

Glad you finally see how ridiculous it is to see one investment as substitutable with another.

Some of you here are getting close to the meme of techbros telling assembly workers about how they should just learn to code.

Fact is, though, we ought to invest in a passenger rail system and support it long term to develop the engineering and manufacturing base for building the physical infrastructure and the rolling stock over the long term.

I'm not sure what you're talking about. Most of our infrastructure is designed and built by Canadian workers. Most of our rolling stock is assembled in Canada. Most of the parts are made in Canada too. Plenty are designed here too. Can you provide examples of rolling stock that were built outside Canada, that you believe we should have made in Canada? The only example that comes close is the Siemens Venture order and it's too small an order to justify Canadian production when Siemens already had a plant running in California.