DETROIT -- The shutdown of the Ambassador Bridge last week forced by protests in Canada has cost the automotive industry millions of dollars and left many wondering who pays for the latest supply chain crisis.
Direct industry losses amount to $300 million (all figures in USD), including a $155 million hit to automakers and $145 million in lost direct wages due to plant shutdowns, according to an estimate released Monday by consulting firm Anderson Economic Group LLC.
The bridge between Detroit and Windsor — a vital link for the two countries' economies — reopened Sunday after a six-day shutdown, but the impact could linger for months, experts say, as does the threat of future closures. Canada's Prime Minister Justin Trudeau invoked emergency powers Monday to quell the paralyzing protests by truckers and others angry over Canada's COVID-19 restrictions and other issues.
And Windsor, Ont., Mayor Drew Dilkens declared a state of emergency in his city in order to give law enforcement more powers and keep trade flowing.
"Within hours of the trade disruption at the Ambassador and Blue Water bridges, we observed shortages and then slowdowns at assembly plants," Patrick Anderson, CEO of Anderson Economic Group, said in a news release. "Only some of that lost production can be made up given the tightness of the auto industry's supply chain right now, so these are real losses to the men and women working in this industry."
The bridge closure is yet another force majeure in a period of unprecedented disruption, according to legal experts. Force majeure — an unforeseeable circumstance preventing a contract from being filled — is the likely defence for suppliers that were unable to move parts across the bridge, said Dan Rustmann, co-chair of Detroit-based law firm Butzel Long's global automotive group.
"It's just really another disruption in a string of disruptions for the industry," Rustmann said. "Seems to be one thing after another hitting the supply chain."