"If they ordered submarines, shouldn’t you just deliver submarines — why give more?"
That has been a common reaction to reports that Canada is pressing South Korea and Germany, both competing for a 60 trillion won patrol submarine project known as CPSO, to present a “private investment package.” Public sentiment cooled further after reports said Canada is seeking an auto manufacturing plant — a project tied to advanced technology, large-scale investment and major job creation. Critics say it is hard to accept an arms tender in which submarine performance counts for 20% of the evaluation while expected economic spillover accounts for 80%. Many observers argue that a package deal that effectively hands over industrial infrastructure would become a burden future generations must repay. Much of the public support has instead gone to Hyundai Motor Group, which has been drawn into the submarine bid, with calls not to load excessive responsibility onto a private company.
For Hyundai, Canada also revives the painful memory of the “Bromont nightmare” from 30 years ago. The company once built a plant in Bromont, Quebec, hoping to establish a North American foothold, but withdrew early in 1996, just four years after opening. The exit followed weak Sonata sales, parts procurement problems, productivity averaging 30% to 40%, and repeated labor disputes. Hyundai suffered a major loss, failing to recover an investment of 320 million Canadian dollars (3.5 billion won at the time). It was Hyundai’s first failed overseas investment.
Hyundai Chairman Chung Euisun said last year at the completion of a plant in Ellabell, Georgia, that the company would “put down roots” there. Once a factory is built, it ties a company’s fate to that place. Closing a plant is more than dismantling equipment; it means unwinding jobs, supplier networks and brand trust — a long, costly process. That is why being asked to plant a flag again in a place associated with withdrawal can be a burden beyond the numbers. With electrification reshaping the industry, a misstep can affect decades of planning. Canada offers attractive cards in batteries and green policies, but it also sits on a complicated North American supply-chain chessboard where a single move can be decisive.
The dilemma for an owner begins with the fact that governments and companies speak different languages. For a government, submarine exports can be leverage to strengthen alliances, and it cannot ignore what an auto plant might deliver in bargaining power. A company’s calculus is different. As the industry hits an inflection point in electrification, global automakers are locked in massive investment competition in batteries, software and autonomous driving. For Hyundai, which already has a dense North American production network centered on the U.S. South and Mexico, building a new plant in Canada would require weighing countless variables, including how to divide roles with existing sites, logistics costs, labor conditions and tax incentives.
An auto plant is also a message from an owner: where to put down roots is a declaration of where to bet on the future. The key is the terms. If a government wants to talk about being “one team” with business, it must offer an industrial foundation that companies can accept, not appeals to patriotism. That means a comprehensive plan — tax support, power-price agreements, infrastructure, labor flexibility and management of diplomatic risk. A factory does not run on slogans. Companies move when “investment under pressure” becomes “expansion through a deal.”
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.