Dragon's Den celeb Kevin O'Leary had some advice for manufacturers at CMTS on Monday: Invest, lobby and look abroad.
Toronto—Kevin O’Leary took the stage at CMTS (Canadian Manufacturing Technology Show) in Toronto on Monday morning, to give more than 200 delegates some practical advice for business growth. The Dragon’s Den celeb laid out 10 manufacturing challenges and priorities:
1. Dependency on the US market. “I worry about that a lot, and so do your investors,” O’Leary said. “The goal for the manufacturing sector is to go from 82 percent reliance on US markets to 60 percent in a decade.”
2. Currency. “It’s your friend and your foe,” he said. “I see the Canadian dollar remaining at parity for the foreseeable future.” His advice? Take advantage of the strong loonie to upgrade machinery and equipment.
3. Geography. “If you could just cut Canada off the top of North America and float it down and attach it to Australia, we could kick their butts with what we have—which is technology—and sell it to the Asian markets,” said the feisty Dragon. “For decades we’ve enjoyed the geography of the largest market in the world (the US) but that’s no longer an advantage…The challenge is how do we engage and sell our goods and services to Brazil, India, China, Malaysia, Cambodia, Thailand.”
4. Protectionism/ Buy American. According to O’Leary, the US has forgotten the volume of trade it does with Canada. He mused about getting tough, and using Canadian oil as leverage. “If anything happens to our access to US markets, our pipleline might ‘break down’,” he said. Not that we’d have to get that aggressive, but “the last thing I want to hear is that we’re providing energy at a fair price…and not getting access to our markets that we used to have.”
5. Rising input costs. The best approach? Buy technology to enhance productivity. “Any firm that does not invest now while rates are low and the Canadian dollar is high is making a big mistake. Even though there’s uncertainty in the markets, it’s the time to be doing this.”
6. Environmental regulations. Paying millions of dollars to curb and offset carbon emissions while global competitors do nothing puts Canadian manufacturers at a competitive disadvantage. “The only way to fight that is lobbying government which as a group…you don’t do enough of.”
7. Government regulations. “I can’t say enough about having a good relationship with government. If you’re not watching, they’ll hurt you.” O’Leary recommended setting aside revenue to support industry association lobbying and government relations.
8. Subsidies. “Whether it’s a good policy or not, if the government is giving away money, grab it because governments change every seven years and policies change.”
9. Unions and labour. O’Leary said companies such as General Electric are shifting production out of country, to be closer to growing consumer markets. In GE’s case, the attraction of business growth in Brazil was a powerful motivator, but the move isn’t without challenges, including public outcry.
10. Automation. “People think that automation is killing jobs in Canada when in fact it’s enhancing the value of jobs you can provide. I don’t think we’re getting the message out.”
O’Leary was hot on Brazil, where Canada’s brand is “on fire.” His overall message was invest in technology, look beyond the US, and use manufacturing’s two million jobs to wrangle better government and trade policy.
Check out Day 1 at CMTS in our photo gallery