SPRUCE MEADOWS, ALTA. -- Canadians cannot afford to be complacent as hungry competitors such as Mexico start to challenge industrialized nations not just with low labour costs -- but also with high quality standards, says a top executive at DaimlerChrysler AG.

In an interview with The Globe and Mail, Chrysler division president and chief executive officer Dieter Zetsche said Canada should not assume that high-paying manufacturing jobs are a birthright. "It's important for us to understand we have no right to anything, but we have to earn it every day."

Mr. Zetsche says he believes Canada does have what it takes to remain relevant in the global auto industry, but that no one should assume that all jurisdictions such as Mexico have to offer is cut-rate wages. Absenteeism in Chrysler's Mexican plants is just one-10th of what it is elsewhere in North America. The Mexican absenteeism rate is just 0.8 per cent; to the north, that rate soars to between 6 per cent and 8 per cent.

Even with a lopsided advantage, Chrysler's Mexican managers are striving to push the absentee rate below half a per cent -- an example of what Mr. Zetsche says are "ambitious" work forces in other countries striving for a share of U.S. and Canadian prosperity.

"It's a competition of locations, of economies, as much as we face competition at our level," Mr. Zetsche says.

Canada has liabilities in that competitive race, chief among them slowdowns at the U.S.-Canada border and the continuing possibility of more significant disruptions. "The border issue is a very big issue for us," he says.

The rising Canadian dollar is another challenge, although in a speech on Friday to business and political leaders at the annual Spruce Meadows roundtable, Mr. Zetsche said that a strong currency, in the long run, is simply a reflection of a strong economy.

But Canada has significant assets as well, he notes. A well-educated work force and excellent physical infrastructure are at the top of that list, although several other countries have those on offer as well.

Canada cannot simply rely on the traditional formula for competing with developing economies, namely that high productivity and quality standards offset higher wages.

Mr. Zetsche, saying he was trying to live up to his reputation for being blunt, told the Spruce Meadows roundtable that Chrysler's Mexican plants, besides outperforming on measures such as absenteeism, also hold their own on quality.

"I don't know whether this is very popular at this place where I'm standing, but we talked before about straightforwardness and credibility," he said. "I have to tell you that in our Mexican plants, we are producing the highest quality and we have the highest productivity."

Still, Mr. Zetsche says Canada can retain its auto jobs, and even attract a new plant, something that this country has failed to do for years. The Chrysler executive hinted that his company would seriously consider such a move. "If it's feasible for us, we'd certainly like to play that role."

Right now, Chrysler is set to begin talks with its union about adding a third shift -- an extra 900 jobs -- to its Brampton, Ont., plant, sending a letter to Canadian Auto Workers union president Buzz Hargrove on Friday asking for immediate discussions.

Mr. Zetsche says government incentives must be part of the package that Canada offers to the auto industry, adding that he believes the "very restrictive position" of the federal government on such inducements is easing. The letter to Mr. Hargrove said that government support for training and technology will be needed if a third shift is to be added. However, Mr. Zetsche stressed that incentives are not enough; they can only sway a decision when a location is already competitive. "I don't think I would ever be seduced to go to any country on the manufacturing side just because of incentives."