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The Toyota-BMW deal: a partnership of the future?

The two auto giants pool resources to offer more efficient vehicles with lower development costs. This kind of strategic partnership may be just what Canada needs to ease the labour shortage.


Photo: Celica21gtfour/Wikimedia Commons

Toyota and BMW are joining engineering forces to offer consumers more environmentally friendly vehicle options with fewer resources. Their main effort will be to improve lithium-ion batteries in electric vehicles, although BMW will also be providing Toyota with 1.6 and 2.0 liter diesel engines starting in 2014.

In their press conference the two auto giants attribute their need to partner up to the challenges they face from governments around the world to reduce carbon emissions and be safer, and more efficient. The cost of the research and development of all these new processes is expensive, so BMW and Toyota will be sharing some of the costs.

The Economist tackled the issue with a quick post pointing to this new partnership as part of a growing trend of large manufacturing companies sharing their engineering accomplishments with each other. Boeing, for example, passed some of the engineering tasks on the 787 Dreamliner to Japanese companies who had unique skills the Americans didn’t. “Likewise, Toyota has agreed to work on hybrid trucks with Ford, and electric vehicles with Tesla, the Silicon Valley sports-car maker. BMW is working on improving the current generation of lithium-ion batteries with France’s Peugeot Citroën. Nissan, as well as joining forces with Renault, has joint projects with Daimler,” the piece goes on to explain.

But this sharing of expertise may not be unique to manufacturing engineers for long. In the Jan. 23, 2012, issue of Canadian Business we looked at how the shortage of skilled workers caused by the demographic wave of aging boomers will be hard on Canadian innovation unless we act now. By partnering with each other, companies in sectors that rely on tradespeople may be able to share the demand for these skills, and invest in developing specialties in their workers, instead of spreading them thin across the company. One manufacturing plant may be able to share more contractors in troubleshooting roles with other companies facing the same resource pressures.

Companies tend to invest in R&D, capital investments and training when they’re focused on long-term projects and direction (rather than quick fixes and cash boosts). That’s something partnerships may encourage more of, since all companies involved will want to squeeze the most profits possible out of the deal. Toyota and BMW have not ruled out further collaborative efforts or investments in each other and are focused on mid- to long-term planning.

For resource-rich Canada, there’s an opportunity right now to grow a nation not only of big brains, but also of nimble hands. Our own manufacturing, transportation and other skilled trades should keep an eye on the BMW and Toyota partnership that aims to develop superior industrial processes cost effectively—it may soon be necessary for our companies to forge similar partnerships from coast to coast.