Canadian protests are choking off one of the most important arteries in the auto industry
Canadian protests are choking off one of the most important arteries in the auto industry
For the third day straight, a trucker protest against Canada’s COVID-19 rules has brought traffic to a near standstill on the streets near the Ambassador Bridge between Windsor, Ontario, and Detroit.
The bridge is normally the busiest land border crossing in North America — 27% of all trade between the two countries crosses the bridge. That works out to almost $300 million worth of goods per day, carried in roughly 8,000 trucks that cross the bridge every day.
A lot of those trucks are hauling vehicle parts from manufacturers in Canada to automakers in the United States. There are a lot of auto parts manufacturers in southwestern Ontario because Detroit is right across the river. The two industries grew up together.
“A lot of this is legacy network structure,” Jason Miller, a professor at Michigan State University’s Broad College of Business, said. “Under normal times, it’s going to be quicker to get something from Windsor, Ontario, than it would be, for example, from Kentucky.”
Canada has its own version of Detroit’s former Big Three automakers, Ford, Chrystler and General Motors. They’re the manufacturers of auto parts: Magna International, Linamar and Martinrea.
And they’re almost an extension of the former Big Three, according to Fraser Johnson of Ivey Business School in London, Ontario.
“They’re integrated right from the product design through to the manufacture and delivery of the components,” Johnson said.
As much as three-quarters of the business they do with U.S. automakers crosses the Ambassador Bridge. A part, like a car door, might cross the U.S.-Canada border five to eight times before it’s finally installed in a vehicle.
Johnson said disruptions at the Ambassador Bridge, like the protest going on right now, can cause big disruptions in the automotive industry.
“My sense is that after two days, we’ll start to see some effect. And certainly if it goes on longer than a week, that we’ll see a major impact on the industry,” he said.
It’s yet another supply chain disruption for an industry that’s been dealing with them throughout the pandemic.
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