Canada: Uniquely Similar?

Abstract

This article analyzes industrial plant rationalization in the context of Canada and the U.S. There is a lack of understanding of rationalization or restructuring among Canadians and these processes are often connected to lack of competitiveness. However, the author argues that in most cases, lack of competition is not the cause of plant rationalization. This article presents the different situations that creates an environment where business owners must weight costs and benefits of rationalizing plants and factoring. Decisions of restructuring and rationalizing are dependent on the conditions of the economy that make it more viable for a plant to operate. These include import tariffs, relative local costs, trade globalization and over-capacity of the plant. The article also presents the argument that the Canada - US – Trade Agreement along with recession and relatively high Canadian dollar value has accelerated the rationalization process. This has also resulted in an indirect impact on Canadian jobs due to actions taken by the US. Through this analysis on the subject of restructuring and rationalization, the author urges Canadian manufacturers to utilize their capabilities and do things uniquely to compete effectively.