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Vehicle grounded swell: London growing into Land Force hub

Military shipbuilding has naturally concentrated on either coast and significant aviation sectors have sprung up in Winnipeg and Montreal. When it comes to ground vehicles, though, London, Ontario has quietly become a thriving hub.

There are about 40 companies in the London defence-manufacturing cluster, employing more than 12,000 people, and armoured vehicle manufacturer General Dynamics Land Systems – Canada (GDLS-C) sets the pace.

“We are a significant presence here in London,” said Ken Yamashita, the company’s corporate affairs manager. “With 2,300 employees, we are one of the largest firms in London.”

GDLS-C has deep roots in the city. It received its first order for Light Armoured Vehicles, or LAVs, in 1977 and since then it has sold 9,000 vehicles to customers around the world. “As Diesel Division General Motors Canada, we were in the heavy equipment business, supplying locomotives, buses and mining trucks and then evolved into a major defence contractor.” (The company was called GM Defense when General Dynamics acquired it in 2003.)

With two national rail lines, an international airport and access to three major highways, London offers fast access to Toronto in one direction and the United States in the other. Proximity to U.S. army development centres in Warren, Michigan is particularly advantageous. In fact, as Paul Bergqvist, chief operating officer of Armatec Survivability, said, “we are closer to and have more interaction with people in Warren than we do with people in Ottawa.”

Founded in 1999, Armatec is a homegrown London success story. The company sells its survivability products to armed forces around the world. “I think it is exceptionally healthy that there is a cluster within the area. I think there are areas where various companies can work together, even though we are often in competition against each other. The benefits certainly outweigh any negatives,” Bergqvist said. One specific benefit he points to is a yearly London conference specific to light armoured vehicles – the Light Armoured Vehicle User Nation Group – that brings together people from all the countries that operate General Dynamics LAVs.

With the November announcement of a 30,000 square foot production facility, Kongsberg Protech Systems (KPS Canada) clearly intends to build on London’s advantages. The company employs 16 people, and it will produce advanced remote weapon stations for the Canadian Forces, as well as for world markets.

“Having a defence sector established in London is very convenient because it can make logistics much less complicated and expensive,” said Jørn Buø, president of KPS Canada. “One of the benefits of having the facility in London is that it provides a short distance between the established supplier base and customer networks. This has the added benefit of attracting the competencies we need in all facets of business. Where there are several defence related companies located in the same geographical region, it often leads to greater job creation.”

Fortunately, the educational institutions to fill those jobs are close by. Fanshawe College hosts the Centre for Applied Transportation Technologies, which includes the Aviation Centre of Excellence. The National Research Council’s Centre for Automotive Materials and Manufacturing is located in London, while the University of Western Ontario (UWO) will build a new International Composites Research Centre next year. Many Fanshawe and UWO graduates work in London’s defence businesses.

“As a company with 260 employees we have at least 40 engineers,” Bergqvist said. “Interestingly, when people ask how many of these are [from] the area, I would say that probably 32 or 33 of them are local employees. These are young engineers who came up through UWO and Fanshawe and we do various sponsorship programs with Western and we take co-op students as well, so we have benefited from that.”

London Machinery Inc. (LMI), a long-established manufacturer of concrete mixers, is now part of Oshkosh Corporation, which manufactures military vehicles. Robert Monchamp, LMI’s general manager, said his company’s facilities give Oshkosh a superior manufacturing asset in the region.

“One of the advantages of the London area is the established, highly skilled work force we presently have, which we will leverage and expand for the Tactical Armoured Patrol Vehicle (TAPV) and Medium Support Vehicle System (MSVS) programs. We are pursuing these programs with Oshkosh Defense and GDLS-C.”

Longchamp called the London area a natural fit for increased defence sector investment. “Our teammate in the TAPV and MSVS programs, General Dynamics Land Systems, is already here,” he said. “In addition to our current workforce, we would expand by utilizing additional local talent in support of these new programs. In fact, the TAPV and MSVS programs would allow us to double our workforce.”

Yamashita also acknowledged the skill across the region. “As far as our business goes, one thing that would surprise people is that we actually have more engineers than we have people on the production floor. Most people think of us as a manufacturing plant but we do a lot of engineering and design work, everything from modeling and simulation work to systems integration to testing and design.” The GDLS-C manufacturing capability includes a state-of-the-art manufacturing facility with laser cutters, robotic welders and modern machining centres. “Sheets of ballistic steel come in one end of our building and a completed vehicle comes out at the other end.”

With October’s formal announcement that GDLS-C won the contract for the implementation phase of the government’s LAV III upgrade project, the company and its London employees will be busy for years to come. The $1.064 billion contract will upgrade and extend the lifespan of 550 LAV IIIs until 2035.

Though London may be an emerging ground vehicle hub, every region of the country will benefit from projects such as the LAV upgrade. Big defence contracts require the prime contractors to agree to Canada’s Industrial and Regional Benefits (IRB) policy, which obligates them to create Canadian economic activity equal to 100 percent of the contract value. They are also encouraged to spread the work across Canada.

“We have been involved in doing IRBs for over 20 years, so it has become the way we do business. We don’t sit down and ask, what can we do about IRBs in this situation? It is a natural outcome of what we do,” Yamashita said. GDLS-C may manufacture and assemble vehicle hulls in London, but virtually everything else is bought elsewhere. “As a result, we have developed a coast-to-coast supplier base of over 400 Canadian companies located in every province.”

Author: Richard Bray from the Dec 2011/Jan 2012 issue published

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