Asia holds key to future success

An interesting confluence of events took place this week that sheds light on the modern dynamics and issues affecting the Manitoba economy.

Wednesday afternoon, people engaged in various aspects of the province's efforts to instil innovation met to talk about new strategies.

Constant adaptation to make products and processes more effective and cost-efficient is generally seen as an almost can't-miss recipe for wealth creation.

Earlier in the week, the Manitoba chapter of the Canadian Manufacturers and Exporters (CME) held its annual Dare to Compete conference.

That conference took place in the shadow of Statistics Canada's latest labour force survey that reported there were 41,000 fewer manufacturing jobs across the country at the end of February than there were a year ago. (The same report suggests 10,000 of those jobs were lost in Manitoba, a total that seems to be out of whack with what is happening on the ground, but is clearly cause for concern.)

David Fung, a serial entrepreneur from Vancouver and a close associate of the CME, caused some heads to shake early in the day at the conference by making a compelling case for the growing imperative to somehow integrate the Chinese and Asian markets into Canadian supply chains.

"Everything is driven by the global supply chain," he said. "Either go to China to make money or use the Chinese (or offshore) labour force to become more globally competitive."

One of Fung's messages was that in generating wealth for Canada, the actual work (fabrication, for example) doesn't have to happen in Canada.

Taking that reasoning a step further, he said while the number of manufacturing jobs may be declining, there are many jobs in design, engineering, marketing and sales that should be classified as manufacturing.

The best example of that phenomenon in Winnipeg is the garment industry, where companies such as Nyg*rd and Western Glove Works continue to thrive and employ scores of designers and marketers with little production taking place here anymore.

But regardless of how you define manufacturing jobs, Fung and others from the CME -- including its local vice-president, Ron Koslowsky -- do understand the number of traditional manufacturing jobs is likely to continue to decline.

And those jobs are not coming back.

The 400 or so Winnipeg workers at Aveos Fleet Performance who lost their jobs this week probably don't care how Statistics Canada classifies their positions.

Regardless of the particular commercial challenges that forced Aveos into bankruptcy protection, it seems clear union leaders were right to be nervous in 2006 when Aveos acquired a large aircraft-maintenance operation in El Salvador.

We in Canada are foolish and arrogant to think workers in El Salvador can't undertake the heavy maintenance of aircraft to international standards, despite the fact they make a fraction of what Canadian machinists and metal workers make.

There's never any magic formula or template to use to determine when, where and how to "diversify your supply chain," as Fung implored.

If there were, CentrePort Canada would not have a decades-long timeline for its development.

After Fung's presentation, Diane Gray said to me in passing, "So, now do you understand what we're trying to do?"

Her efforts to establish partnerships and linkages with inland ports in China, for instance, are intended to open those supply chains to make it easier for Manitoba and Canadian companies to take advantage of efficiencies and competitive opportunities the global supply chain may provide.

Glencore's $6.1-billion purchase of Viterrra and Richardson International's $900-million investment in the Prairie grain-handling infrastructure this week are also very much tied into that global market.

Glencore officials spoke about the three per cent-plus annual global increase in demand for foodstuffs -- because of improving nutrition in developing countries -- as part of the incentive to makes such a large investment.

In addition to the influence the global marketplace has on the decline in local manufacturing/fabrication and the increased demand for Prairie agricultural commodities, the other thing they have in common is the importance of innovation to ensure ongoing wealth creation.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition March 22, 2012 B3