Carmakers have temporarily shut down some plants in the US and Canada as truck drivers in big rigs blocked critical border crossings as part of a growing protest against Covid-19 mandates, cutting off the flow of car parts and other goods between the two countries.
The Freedom Convoy protests, which converged last month in Canada’s capital city of Ottawa, have spread to the Ambassador Bridge that connects Detroit in the US and Windsor in Canada, where traffic was snarled for a fourth day on Thursday.
The disruptions illustrate how the protests have ballooned in recent weeks, spreading beyond Canada’s borders and affecting commerce with its North American neighbour and most important trading partner.
The pandemic has also left supply chains especially fragile and prone to disruptions, and carmakers warned that the protests could further exacerbate component shortages that have plagued them in recent months.
General Motors said its plant in Lansing, Michigan, which makes Chevrolet and Buick SUVs, was forced to cancel its second shift on Wednesday and its first and second shifts on Thursday owing to parts shortages. GM said it was working with suppliers to mitigate the situation.
Toyota stopped production at all three of its Canadian plants and a factory in Kentucky in the wake of the protests, saying it expects the disruptions to last through the weekend. The Kentucky plant, Toyota’s largest factory in the world, builds models including the RAV4 crossover and Camry sedan.
Ford, which was running two plants in Ontario at reduced capacity on Thursday, warned that supply chain bottlenecks between the US and Canada “could have widespread impact on all automakers” if the situation is not resolved quickly.
“This interruption on the Detroit/Windsor bridge hurts customers, auto workers, suppliers, communities and companies on both sides of the border that are already two years into parts shortages resulting from the global semiconductor issue, Covid and more,” Ford said.
Stellantis, whose brands include Fiat, Jeep and Ram, said that while all of its North American plants were running, some factories in the US and Canada cut their second shifts short on Wednesday night “due to parts shortages caused by the closure of the Detroit/Windsor bridge”.
“The situation at the Ambassador Bridge, combined with an already fragile supply chain, will bring further hardship to people and industries still struggling to recover from the Covid-19 pandemic,” Stellantis added in a statement.
More than $300mn in goods cross the Ambassador Bridge every day, about a quarter of all trade between the US and Canada.
Edward Alden, a senior fellow at the Council on Foreign Relations, said the bridge is “the single biggest trade artery in North America”.
“More trade goes across that bridge than any other crossing, it’s the most important route,” Alden said. The “just in time” manufacturing style of the auto companies meant that they were particularly affected by any delay in receiving parts, he added.
“Everything for them is set up assuming it will be easy to get back and forth across that bridge,” he said.
The crossing was not technically closed to US-bound traffic on Thursday, according to Windsor police, but “demonstrators are making it difficult to access the bridge”. Police warned of “significant” delays.
The White House said on Wednesday that it was monitoring the situation. “The blockade poses a risk to supply chains for the auto industry because the bridge is a key conduit for motor vehicles components and parts,” White House press secretary Jen Psaki told reporters. She said they were also tracking any potential disruptions in US agricultural exports to Canada from Michigan.US
The Department of Homeland Security said it was tracking reports of a potential convoy that may be planning to travel to several US cities.
The traffic jam on the Ambassador Bridge has piled pressure on Canada’s Liberal prime minister Justin Trudeau, who called the trucker protests “unacceptable” and warned of the impact on manufacturers. “We must do everything to bring them to an end,” he said.
However, Trudeau has stood firm in his support of Covid restrictions in Canada, including the vaccination mandate for cross-border truckers that sparked the Freedom Convoy.
Matt Moroun, chair of the Detroit International Bridge Company that controls the Ambassador Bridge, called on the Canadian government to end the protest by repealing the vaccine mandate or removing the vehicles blocking access to the crossing.
“We are all just beginning to feel the devastating impact,” Moroun said. “This cannot continue any longer.”
The Canadian Trucking Alliance has said 90 per cent of drivers have been vaccinated against Covid. Earlier this week, the group urged government officials to “work together in bringing an immediate end to the current blockades”.
Some regions in Canada have begun lifting Covid-era rules after a drop in reported infections, which had spiked amid the spread of the Omicron variant.
Alberta ended its vaccine passport programme and capacity limits for public venues on Tuesday, with Conservative premier Jason Kenney saying Covid’s threat to public health “no longer outweighs the hugely damaging impact of health restrictions on our society”.
Source: Economy - ft.com
