Politics

Canadian trucker protests start to hurt auto plants nationwide


Like falling dominoes, automakers across North America are adding to the list of plants affected by the truck blockade that has all but halted traffic across two of the busiest routes linking the U.S. and Canada.

After temporarily halting production at three of its factories in Ontario, Toyota announced Thursday that a shortage of Canadian-made parts had hit an assembly plant in Kentucky. Ford and General Motors have felt the impact at some of their operations. And though the automaker Stellantis has resumed operations at an assembly plant in Windsor, Mike Koval, the CEO of its Ram brand, said in an interview that “the situation is fluid” and could lead to new production cuts.

“It is a mess,” said Carla Bailo, the CEO of the Center for Automotive Research, or CAR, a nonprofit research group. “What we’re seeing is that the plants in Canada are really getting strangled first. Then the plants in the U.S. relying on engines and transmissions will be hurt next.”

Ongoing problems

Claiming to be mobilized by frustration with Canadian mask and vaccine mandates, thousands of truckers descended on the capital, Ottawa, last month and staged a protest that has all but paralyzed the city. Early this week, they expanded their demonstrations, first moving to blockade the Ambassador Bridge connecting Windsor, Ontario, with Detroit. 

The bridge is the busiest land crossing between the U.S. and Canada and handles nearly 25 percent of the trade between the two countries. It is the primary route for auto parts and completed vehicles, especially those produced in the Ontario and Michigan manufacturing centers.

Canadian authorities responded by redirecting traffic to two other regional border crossings. The tunnel between Windsor and Detroit can only handle light vehicles, however. So trucks were diverted to the Blue Water Bridge linking Sarnia, on the Canadian side, with Port Huron, Michigan. But protestors quickly moved to tie up that link on the Canadian side, as well.

While some traffic has been able to move across the spans, traffic has been operating in one direction and at a crawl, trucks taking more than four hours to move from Sarnia to Port Huron. And what little traffic that has been able to cross the two bridges has been going from the Canadian to the U.S. side. 

Among the plants so far hit by the blockade, the impact has been most severe on the Canadian side:

  • Stellantis — formed by the merger of Fiat Chrysler and PSA Group last year — briefly shut down the Chrysler Pacifica minivan plant in Windsor. But it has now been brought back up.
  • Ford soon followed, paring back production at a key SUV assembly line in Oakville, Ontario, and an engine plant in Windsor.
  • Toyota followed by closing three Ontario plants “for the remainder of this week and then it is TBD,” chief spokesman Scott Vazin said in an interview. Those plants in Cambridge and Woodstock, Ontario, produce the conventional and hybrid versions of the RAV4 SUV, the best-selling Toyota model line, as well as the top Lexus product, the RX SUV.
Protesters block the roadway at the Ambassador Bridge border crossing in Windsor, Ontario, on Wednesday.Geoff Robins / AFP – Getty Images

Spreading chaos

On Thursday, Toyota said in a statement that its assembly plant in Kentucky had “recently been impacted by issues related to the Ambassador Bridge blockade.  We expect disruptions through the weekend, and we’ll continue to make adjustments as needed.”

Shortages have already forced production cuts at the General Motors plant in Lansing, Michigan. And there is growing concern that the slowdown in production at the Ford engine plant in Windsor might soon be felt in Kentucky and Ohio. Plants in those states assemble the high-profit Ford SuperDuty pickups, which use the engines produced in Windsor.

“There is no question it is having a negative impact and it will only get worse the longer it lasts,” said Matt Blunt, president of the American Automotive Policy Council and a former governor of Missouri. The blockade is “affecting production … clearly a situation that needs to be resolved. We appreciate the fact that the U.S. government is doing all it can to facilitate as much commerce as possible, but we need Canadian officials to address upheaval and get bridges and transit routes back open.”

Separately, White House spokesperson Jennifer Psaki said that President Joe Biden “is focused on this and we are working very closely” with the U.S. Homeland Security Department and the Canadian government to find ways to end the blockade or work around it.

Pandemic problems

All told, the two bridges linking Michigan and Ontario carry about $100 billion in automotive goods annually.

So a disruption in traffic is a problem at any time. But it’s particularly worrisome now, having had to cope for two years with Covid-fueled production cuts and the slowdowns caused by an ongoing shortage of semiconductors. 

Auto buyers, as well as automakers, have felt the heat. There currently are only about 1 million vehicles in U.S. dealer lots, reported J.D. Power, down from the more than 3 million considered normal for this time of year. So, not only are shoppers finding it hard to locate the new vehicles they want, but they are facing a surge in new vehicle prices. According to J.D. Power and other tracking services, the average transaction price for a new vehicle jumped to as much as $47,000 at the end of 2021, up more than $10,000 since the beginning of the pandemic.

There are only a handful of vehicles at Suburban Ford of Ferndale, a suburb at the northern border of Detroit, said sales manager Brycen Collins. And he now is worried that his inventory could shrink further due to the blockade.

“Everything I heard is that we have a couple more days before it starts hurting us,” Collins said.

Ironically, the speed at which the blockade crisis has hit is, in part, the industry’s own fault. Over the last few decades, automakers have moved to a “lean” manufacturing system called just-in-time production. They maintain minimal levels of inventory and, when possible, take delivery of parts and components shortly before they’re needed on the assembly line. That leaves little room for error.

“We saw this during the pandemic as well,” said Bailo, when manpower shortages at parts plants forced some assembly plants to trim or halt production. “There are going to be changes” going forward, she added. In some cases, manufacturers may need to start building warehouse inventories again. And they will be more likely to seek out dual sources of parts. If one supplier goes down, they’ll turn to the other to fill the gap.



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