Lacking available weapons, Quebec furniture makers plan to move their penates to Mexico.
Posted at 6:00 am
Far from being limited to the furniture sector, this “offshoring” trend seems to affect the entire manufacturing sector, confirms Véronique Proulx, President and CEO of Manufacturiers et Exportateurs du Québec (MEQ).
For example, according to a recent survey conducted by the Quebec Furniture Manufacturers’ Association (AFMQ) among its 83 members, 33% said they were “looking into the possibility of out-of-province production”. The survey didn’t address manufacturing locations coveted by companies, but the city of Juárez in northern Mexico appears to be attracting several, points out Gilles Pelletier, AFMQ’s president and CEO.
Labor shortages and “unusually long” delays — 16 months according to the AFMQ survey — before foreign temp workers arrive are urging furniture makers to consider other avenues. “The disgust is so great that people are starting to think about producing elsewhere,” says Mr. Pelletier during an interview with bluntly The press. We receive notifications of a move. It’s worrying. Haven’t heard that very often before. »
“In Mexico there are maquiladoras. These are free zones, often near US Customs. Juárez is one of those places.
“There are financial incentives for companies to move there, and they have access to a plentiful workforce,” he explains, adding that manufacturers who move to Andrés Manuel López Obrador countries do not do so “easily”.
Réjean Poitras, President and CEO of Amisco, which specializes in metal furniture, is one of those who had to make this heartbreaking decision. Headquartered in L’Islet in Chaudière-Appalaches, his company has plants in the same region, as well as in Saint-Pascal-de-Kamouraska and Shawinigan. But Amisco, which produces 400,000 pieces of furniture a year, wants to keep growing. The manufacturer is currently in final negotiations about renting production space in Juárez. The company plans to start production in early 2023.
“The goal is not to reduce our activities in Quebec,” emphasizes Mr. Poitras. But we’re seeing our manufacturing capacity drop, not because we’re going to lay people off, but because we’re going to lose people who are retiring, and recruitment difficulties are going to be great for a long time to come. In this context, we are going to Mexico to maintain and, if necessary, increase our production activities. »
The big boss of Amisco, which currently employs 500 people, blames state and federal governments for not speeding up the process of landing foreign contract workers.
We need more foreign workers, skilled and unskilled. It is important that the process of worker integration is much smoother, much shorter and better supported in the regions.
Rejean Poitras, President and CEO of Amisco
In Sainte-Croix-de-Lotbinière, furniture maker South Shore, which has two factories in Quebec, also has facilities in Juárez. But this is not new. South Shore has been established there for a dozen years. Half of the production takes place here and the rest on Mexican soil, explains Jean-Stéphane Tremblay, President and Chief Operating Officer of the Quebec manufacturer, which specializes in online distribution. “I can understand some companies asking questions and wondering what they’re going to do,” he admits.
“If we didn’t currently have a factory in Mexico, it would be clear that locating there would be a solution to consider to alleviate the labor problem we are facing. »
South Shore recently welcomed 12 employees from its Juárez plant in Quebec to fill vacancies at its Coaticook and Sainte-Croix-de-Lotbinière plants.
“It’s good for us. These are people we know who already work for our organization, Mr Tremblay points out. You know our processes, our machines. You arrive here and you can already work. We gave them French lessons in Mexico. We bought two houses to accommodate them. »
Gilles Pelletier regrets that this “exile” is not without consequences. In particular, he mentions the loss of investment and knowledge. Currently, 40% of the country’s furniture manufacturing is made in Quebec. “History repeats itself,” he laments. We have seen this in other industries such as the textile industry. We end up in a service industry. »
“All the facilities we have, the equipment we have, will remain underutilized,” adds Réjean Poitras. Lower taxes are payable in Quebec. »
“There are many players who may not have the means or resources to settle elsewhere,” he continues. I think it can go as far as shutting down smaller players. »
This situation in the furniture sector does not surprise Véronique Proulx. According to a study published last fall by Manufacturiers et Exportateurs du Québec, 15% of the companies surveyed say they have considered moving between 40% and 50% of their activities outside of the province.
“It’s really a last resort,” she says. The immigration authorities of the federal and state governments are not economic offices. We need the government to speed up the process [pour faire venir des gens ici]. »
Furniture manufacturing in Quebec
- 40% of the country’s furniture manufacturing occurs in Quebec
- The sector represents more than 20,000 jobs
- 500 companies
- 90% of Quebec home furniture exports go to the United States