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Transition to advanced manufacturing powers region’s job growth
January 17, 2015 | Rose Simone | The Record | LINK

WATERLOO REGION — The transformation of Waterloo Region's economy is clearly evident at 66 Hincks St. in New Hamburg, a building that was once the location of Magnussen Furniture Manufacturing Ltd.

The furniture makers are gone.Magnussen Homestill has offices in New Hamburg, but the manufacturing part of the business left town in the 1990s.

Now rovers are moving in, along with the people who have their eyes on a moon shot.

Ontario Drive & Gear, known as ODG, has grown to employ nearly 250 people in New Hamburg. The success of its latest terrestrial rovers, based on prototype technology developed for driving around on the moon or on Mars, has meant more hiring and an expansion into 30,000 square feet of space in the former Magnussen building.

The expansion at ODG, which already occupies two buildings in New Hamburg, on Bleams Road and Bergey Court, reflects an economic transformation that is underpinning the region's robust economy.

In December, the region's unemployment rate fell to 5.6 per cent, the lowest it has been since October 2008. Only Barrie and Guelph had lower jobless rates in Ontario last month.

Peter Visscher, ODG's chief technology officer, says the company's space and robotics division is doubling in size from six to 12 people this year because of a number of contracts with the Canadian Space Agency,including two with a combined value of about $3 million. Those contracts require more manpower and lab space, he says.

The company's terrestrial rovers, based on the advanced space technology, also are a growing part of its business, Visscher says. The company recently launched its Argo J5 rover, the first of a family of robotic vehicles derived from the lunar prototypes.

Everything made for the lunar and Mars rover prototypes is unique because the environment is so extreme, Visscher says. Wheels are good example. The lunar prototype wheels can't be made of rubber, because rubber would freeze and break, or else melt on the moon. They are made of a special, flexible metal, he says.

Once off-planet technologies are developed, the company can make the designs work on terrestrial rovers for earthly applications.

The terrestrial rovers have all sorts of uses. The military can use them to transport stretchers or supplies in rough terrain; remotely operated vehicles can be used to spray crops without putting people in danger; for resource exploration, unmanned, amphibious vehicles can go into areas that are too dangerous for people.

ODG is hiring from the region's talented pool of engineers, especially mechatronics and mechanical engineers, as well as skilled tradespeople. It also needs project managers, sales people and administrative people, Visscher says.

The region is developing a hub of technology companies that are evolving around the robotics and remotely operated vehicle sector. Besides ODG, there is Clearpath Roboticsin Kitchener, which also makes autonomous vehicles; Deep Trekkerin Ayr, a startup that makes a low-cost remotely operated, underwater submersible andAeryon Labsin Waterloo, which makes airborne drones.

These companies are all hiring. So while the region has moved from its traditional manufacturing past, when production of boots, tires and furniture dominated, it is making robust robotics and technologies for land, sea, air and space.

There are struggles in other sectors of the economy. This week's announcement that Target is closing all its Canadian stores means that some 400 people in the area will lose their jobs, for example.

But the region's economy is doing remarkably well when it comes to creating jobs. In December, only Barrie, at 4.9 per cent, and Guelph, at 5.1 per cent, had lower unemployment rates. Like Waterloo Region, Hamilton had a jobless rate of 5.6 per cent.

Christine Neill, an economics professor at Wilfrid Laurier Universitywho specializes in labour economics, says the number of employed people in Waterloo Region has grown 20 per cent over the past 10 years.

The region "has had one of the strongest performing labour markets in the country in recent years," Neill says. "Along with Barrie, the employment and labour force participation rates in the region are the highest in the country outside of the Prairies"

But there are shifts in the local economy. Manufacturing is still the biggest sector, employing about 19 per cent of the working population, or about 56,000 people, according Neill. Manufacturing is recovering, with a four per cent gain in employment last year, but employment is still down compared with what it was before the 2008 recession, when more than 60,000 people were employed in manufacturing, she says.

Other sectors are growing. Transportation and warehousing, for example, added about 2,000 jobs in just the past year and now employ more than 13,000 people in the region, according to Statistics Canada.

Neill says employment in construction is also up in Waterloo Region compared with nearby areas such as Brantford. That may reflect booming housing and light rail transit construction, she says.

Ian McLean, CEO of the Greater Kitchener Waterloo Chamber of Commerce, says the strong employment numbers reflect the diversity of the local economy and the ability to make the transition to advanced manufacturing.

"The manufacturing that was left after the downturn was by and large the advanced manufacturing. We are not doing widgets anymore," McLean says. "Where we are competitive is where we can marry technology innovations."

Although many of the large manufacturers that employed more than 500 people have gone, there are now smaller manufacturers that do "value-added" products or technologies, he says.

Visscher, at ODG, says marrying technology with manufacturing is the best route for the economy. "That is the key to manufacturing in Ontario," he says. "We will have much better success focusing on high tech and producing the things that are not produced as easily in China."

Being quick to market and having the capacity to do quality in-house manufacturing also help ODG, he says. "Some robotics companies struggle a little bit because they have to buy things like gear boxes," he says. "We build our own gear boxes and we know how to build the chassis and the wheels and the bearings … it's all old hat to us."

The Canadian Space Agency is happy ODG can take space technology and find commercial applications for it, Visscher says. "We have shown that the money they spend on developing technology for space can in turn be used on earth and commercialized. So it is a good investment all around."