In The Media

Military spending: A $400M deal to upgrade armoured vehicles comes just as work was slowing at the giant General Dynamics plant

by Norman De Bono (feat. David Perry)

London Free Press
February 13, 2017

A $404-million order to upgrade Canadian armoured military vehicles came just in time to avert possible job cuts at London’s General Dynamics Land Systems Canada plant.

Production has slowed at the sprawling Oxford Street factory and workers were growing nervous, said Jim Wilkes, secretary with Unifor Local 27, the union representing employees.

“They have been slow. You can feel it there. This will make sure there are no layoffs,” said Wilkes.

Last Friday, the federal government announced the investment to upgrade 141 LAV III light armoured vehicles. Ottawa has invested $1.5 billion since 2011 to improve its London-made fleet of 550 LAV IIIs, extending their life to 2035.

“People have been worried there, I know. This will help them in a lot of ways. It is some security,” said Wilkes.

The deal will secure about 250 jobs at GDLS Canada, more than 10 per cent of the plant’s workforce of more than 2,000, the company said.

The factory also has begun work on a $15-billion Saudi armoured vehicle order, but that has not sped up production, Wilkes said.

David Perry, senior analyst at the Global Affairs Institute, said he isn’t surprised the plant has been slow. While Ottawa has pledged $11 billion during 10 years to the military, that is largely for operations, maintenance and soldiers, with little left over for ground equipment, making Friday’s announcement very welcome, he said.

“There has not been much new in land equipment, they have been focused on ships and fighter planes. There is not a lot of new money in procurement,” said Perry.

Ottawa plans to spend $26 billion on new shipbuilding and as much as $7 billion for an interim fighter jet replacement, he said.

“A lot of defence manufacturers have noticed things slowing down, available money for new equipment is spoken for.”

London’s business community has embraced the latest investment, saying it offers critical support for area defence industries.

“It is always good news when jobs at London’s anchor defence company are being secured,” said Kapil Lakhotia, chief executive of London Economic Development Corp.

The London region is a defence industry hub, employing more than 12,000 at more than 45 companies.

The armoured vehicle upgrades will offer soldiers greater protection, mobility and enhanced electronics.

“This is leading the world when it comes to this type of armoured fighting vehicle. It provides the protection and firepower and mobility to our army to meet missions assigned,” said Brig.-Gen. Derek Macaulay, Canada’s chief of staff for army strategy.

The announcement was made at the plant by Defence Minister Harjit Sajjan, a veteran who served in the LAV III when in Afghanistan in 2006, 2009 and in 2010 and 2011 with American forces as a Canadian military officer, with the 10th Mountain Division.

“It’s a huge show of confidence on the part of the federal government for this city and all that it represents. We have all the potential to thrive economically here and we have to make sure we encourage our defence sector, This city and region have become a defence cluster and we need to encourage that,” said London North Centre Liberal MP Peter Fragiskatos.


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An Update on the NAFTA Renegotiations

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On today's Global Exchange Podcast, we touch base with CGAI's North American trade experts in light of a busy week on the NAFTA file in Washington. After months of hard-pressed negotiations, and 6 weeks of 'perpetual' discussions in Washington, the deal has reached its next turning point, with Congressional leadership signalling that they'd need a new deal by May 17th in order to have it passed before U.S. mid-term elections in the Fall. With no deal in sight, and the Congressional deadline now in the rear-view mirror, we sit down with Sarah Goldfeder, Laura Dawson, and Eric Miller to ask where we go from here.


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