A protest that shut down traffic at the U.S.-Canada border crossing in Detroit has forced automakers to halt production on both sides of the border and exacerbated turmoil to an auto industry already stressed by a computer chip shortage.
General Motors Co., Ford Motor Co., Toyota Motor Corp., Honda Motor Co. and Chrysler owner Stellantis have all shut down assembly plants because parts cannot be shipped across the Ambassador Bridge between Detroit and Windsor, Ontario.
A protest in support of Canadian truckers calling for an end to a vaccine mandate for drivers crossing into Canada from the U.S. — matching a requirement by the U.S. for truck drivers entering the U.S. from Canada — has shut down commercial traffic on the bridge since Feb. 7.
Ontario Premier Doug Ford declared a state of emergency in the province in response to protests both in Windsor and the Canadian capitol of Ottawa.
"To protesters, We've heard you and it's time to go," Ford said.
The ripple effect has hurt companies all along the supply chain from international Tier 1 auto suppliers to toolmakers.
Mold maker Cavalier Tool & Manufacturing Inc. in Windsor, said it is "at a standstill all but virtually" with the molds it sends across the border and the manifolds, steel and other components they bring in from the United States.
"It's just a heck of a wrench into us," said Sales Manager Tim Galbraith.
There are unattractive workarounds. The company is routing some shipments to Toledo, Ohio, by sending trucks east to the border crossing at Buffalo, N.Y., or, when it does not face six hour backups, across the Blue Water Bridge 65 miles north of Detroit, between Sarnia, Ontario, and Port Huron, Mich., he said.
The Ambassador Bridge closure has also exacerbated trucking shortages and rising costs the company was dealing with before the demonstrations, he said.
For example, Galbraith said several weeks before the protests, Cavalier contracted with a trucking firm to pay $20,000 to ship a large tool to a factory in Mexico.
That went up to $37,000 when Cavalier called to schedule the pickup, before the protests. But with demonstrations erupting before the actual mold collection day, the trucking firm canceled and said it would not risk sending a rig. So the tool sits in Cavalier's Windsor facility.
"That's the typical things that are happening," he said. "My customer will probably incur financial penalties because they're late delivering their parts. That's out of my control but I just hope they give us the jobs next time."
The Canadian Association of Moldmakers and Automate Canada said they were sending a joint letter to Canadian Prime Minister Justin Trudeau asking for stronger action to resolve the crisis.
Jeanine Lassaline-Berglund, president of both organizations, said some member companies are "up in arms" about the business disruptions. She said one company noted it sends C$4.5 million (US$3.5 million) in tooling across the border each month.
She said the Canadian firms are worried the shutdown will make U.S. customers more reluctant to source in Canada, on top of the struggles with border trade during the two years of the coronavirus pandemic.
"This has the potential for devastating effect," she said. "In our opinion, we have U.S. customers and the U.S. public at large, if you will, that are watching what is going on here and saying, 'This is just one more reason not to do business in Canada.'"
That worry is shared by Cavalier.
"There's definitely some concern that there are companies that are saying, 'Hey, I've got a company in Chicago or Detroit or whatever city that I can place a program with, and I've got a company in Windsor I can place a program with, and all things being equal, the risk mitigation group says let's not take a chance on Canada,'" Galbraith said.
Industry consultant Laurie Harbour said the bridge shutdown could have significant impact, noting that many mold builders in Canada buy steel and components from the United States.
"This could delay builds and deliveries to customers which will cause a ripple effect to molders that won't be able to make parts for new vehicle launches," said Harbour, who is president and CEO of Harbour Results in Southfield, Mich.
One large auto component molder said it's had to adjust shipments.
Magna International Inc. is "managing" amid "supply chain constraints caused by the blockade," Tracy Fuerst, vice president of corporate communication at Magna, told Plastics News.
"We've had to be a bit creative by using other ports of entry," to get supplies both into and out of the U.S. and Canada, Fuerst said.
However, Fuerst later said a "handful" of the supplier's plants in the U.S. and Canada have started to adjust or reduce shifts to match automakers' schedules impacted by the protest. As an example, she pointed to a just-in-time seating facility in the U.S. that is idled Feb. 11 because the assembly plant it supplies is shut down.
On an earnings call with analysts, Magna CEO Swamy Kotagiri said the company was "starting to see some initial impact" from the blockade as its automaker customers scale back production plans.
"We're watching it closely, and we hope it gets resolved quickly," he said.
The auto industry's tight supply chain means any snarls can be aggravated quickly
"All it takes is one missing part, and it shuts down an assembly line," said John Taylor, professor of global supply chain management at Wayne State University in Detroit. "The whole system is built on minimal disruption so you can ship parts a day or two before they go into the car."
Plant closures and temporary layoffs will continue if the border remains closed, said John Walsh, president and CEO of the Michigan Manufacturers Association.
"Automotive suppliers are on the brink of a significant production crisis," Julie Fream, president and CEO of the Original Equipment Suppliers Association, said in an email. "We need both the Canadian and U.S. border authorities, as well as local law enforcement, to fully enforce the laws and regulations to reopen all border crossings including the Ambassador Bridge."
Sarah Kominek of Plastics News, Crain's Detroit Business and Automotive News contributed to this story.