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ADMS 1010 (241)
Lecture 4

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York University
Administrative Studies
ADMS 1010
Eytan Lasry

ADMS 1010 Week 4 Notes Relentless Change – Case 5 (pp. 120-136) Uneasy Partnership – Chapter 4 (pp. 99-140) The Canadian Auto Industry History of Canadian Automotive Industry - 1904: Licensing of Henry Ford’s Model C in Canada - Ford Company was located in Detroit - Canadian Fords were being shipped to most parts of the British Empire - 1907: McLaughlin converted family’s carriage and sleigh production to horseless carriage (noisy internal combustion engine) - 1908: McLaughlin use David Buick’s engines. McLaughlin also received the rights to the Chevrolet “Classic Six” - Other car companies began to spring up in Canada o Small companies that switched from producing carriages to motor cars - All of them failed except for Ford of Canada and GM of Canada - Why did two US-based car manufacturers succeed? o National Policy and protectionist policies of British Empire (Imperial Preference) o 35% tariff: cars produced in the US were 35% more expensive to purchase in Canada; licensing their cars was cheaper than buying new plants in Canada o Cars built in Canada could be sold anywhere in British Empire tariff free o By 1920s, 80% of Canadian auto exports were to imperial markets o Similar to a franchising i.e. Tim Horton’s o Locally produced cars had more difficulty  No benefit of the larger US market  Dependent on the limited domestic market in Canada - Car manufacturers began to consolidate to form larger firms o More capable of competing internationally - McLaughlin Motor Car Company  GM of Canada in 1918 nd - 1918 – 1923: Canada is the 2 largest vehicle producer in the world and a major exporter Key Success Factors: - National Policy Tariff - Imperial preference - Licensing by US Firms - Robb budget o Canadian content rules o 50% of the value of the completed car must be made in the British Empire o Offered 25% reduction in duties o More profitable to make a car in Canada than to import ADMS 1010 Week 4 Notes o Benefit of encouraging a domestic parts manufacturing base in Canada - The Auto Pact (1965) o Prevent a trade war over the findings of the Royal Commission o As many cars had to be built in Canada as were sold in Canada  Di
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