Ontario and Michigan: A tale of two recoveries

In the last few months, I have done an extensive amount of travel to the different industrial regions in North America, including the Southeast, the Midwest, the Southwest, the “Rust Belt,” Ontario and Michigan, for the purpose of building up my own company. Through my role in the London Region Manufacturing Council, I have participated in numerous roundtable discussions and have listened to industry and government leaders speak of their plans, or opinions, on rebuilding or re-igniting industries in their regions. And through it all, I see hope, sense optimism and hear about “the light at the end of the tunnel.”

But some regions were hit harder than others, and some rebounded earlier than others. The biggest two – Ontario and Michigan – are finally starting to show some positive signs.

Ontario and Michigan have long been considered the two most significant manufacturing jurisdictions, but their recovery seems to have been the slowest. Perhaps this is just because of their size – it’s harder for a big ship to change direction than a small ship. But in my travels through Michigan, I sense a new attitude at the grass roots level, a re-invention of sorts. I don’t sense this yet in Ontario.

In Ontario, there is still an attitude that suggests that government has to do more to protect our industries. In Michigan, it’s the companies and factories that are reinventing themselves. Those that have survived have done so because they have adapted and adjusted.

Success comes with its baggage, which is all of the things that we hold on to and refuse to let go of, even after the usefulness ends and it just gets in the way. Ontario and Michigan both accumulated a lot of baggage during their 70 or 80 years of success, and both clung fiercely to what they perceived as gains. But Michigan lost far more than Ontario, and as a result, reached the point of shedding some of that baggage far faster than Ontario. Ontario continues to layer on more and more legislation to control the industry or protect the workers, not realizing that words like “Lean,” “flexible,” “responsible” and “accountable” are the key words in industry today. Nobody understands the true meaning of these words like a company that has managed to survive, and perhaps even thrive, in the toughest time for manufacturers since the depression.

Not every story in Michigan is a success story, but many of the ones left standing certainly are – and that starts right near the top, with Ford. Ford held on to the vision and values it held close to its core, but was then willing to challenge everything else about what it did or how it did it. The successful Tier Ones have followed that lead. In eastern Michigan, I have been in facilities where workers and management have historically been on opposite sides of the table, but now they are on the same side. No one has to protect these workers from their employers because they know that together they can do a far better job of looking after their jobs themselves.

In western Michigan, I have been through other factories that were taken over by new companies after the original companies failed or became unsustainable. They were then retooled and reinvigorated with new equipment and new attitudes, and they are once again profitable and confident of their futures.

I’m not saying that companies have to be allowed to fail in order to eventually succeed. Failure is only a necessity if unsustainable companies refuse to consider all of the changes that might be necessary.  

Hey Ontario, it’s time to stop expecting government to fix our manufacturing industry. Instead, we should ask the government to step back and stop trying to lead the recovery. We need industries and companies to be able, and willing, to lead courageously. The tax cuts in recent budgets are a good invitation for companies to look at investing in Ontario again, but that is just the start. 

In the 1980s, Lee Iacocca said, “In the automotive industry, you lead, follow or get out of the way.”

In Ontario today, our mantra should be for industries to lead, and government to get out of the way, because few manufacturing companies in this province are going to survive just by following.

Paul Hogendoorn is president of OES, Inc. of London, Ont., and past chair of the London Region Manufacturing Council. He can be reached at phogendoorn@oes-inc.com.