Canadian bridge protest unmasks another supply chain vulnerability

A weeklong bridge blockade by protesters at the U.S.-Canada border further highlighted the fragility of the North American supply chain, and could spook automakers into sourcing more of their parts locally, industry experts and analysts said.

"We've talked about it for years: Buy where you build," said Laurie Harbour, CEO of supplier consultancy Harbour Results Inc. "If you're not going to buy where you build, then understand the risks that are associated with that."

Canadian truckers and activists demonstrating against COVID-19 vaccine mandates last week used big rigs and other vehicles to snarl traffic at the entrance of the Ambassador Bridge, a vital commercial link that accounts for more than a fourth of annual U.S.-Canadian trade.

The protest immediately sparked production worries across an already stressed North American industry, complicating vehicle schedules at General Motors, Ford, Stellantis, Toyota and Honda, as well as their suppliers, on both sides of the busy border.

Bridge traffic was sharply reduced, leading to a handful of idled or slowed-down assembly plants and supplier factories. Much of the initial impact was felt in Canada, as just-in-time parts deliveries from U.S. factories were unable to arrive at plants in Windsor, Ontario, and the Toronto area in time.

"There are more just-in-time U.S. parts going in that direction than there are in the other direction," said Carla Bailo, CEO of the Center for Automotive Research in Ann Arbor, Mich.

But the U.S. ripple effects grew as the blockade continued and were geographically far-reaching, extending well beyond the bridge's Detroit location.

"This situation absolutely affects every assembly plant at some level," Harbour said.

Toyota suspended production at its plant in Georgetown, Ky., through at least Saturday, Feb. 12. Ford closed its Ohio Assembly Plant west of Cleveland on Feb. 11 because of parts shortages.

GM canceled shifts at its Lansing Delta Township plant in Michigan on Feb. 9 and 10, before bringing the plant back online on Feb. 11.

One lane of the Canada-to-U.S. bridge traffic was reportedly maintained during the week, and four trucks containing parts for GM's Spring Hill Assembly in Tennessee managed to cross on Feb. 10 to support production on Feb. 11, according to someone familiar with production plans. Employees there worked an eight-hour shift Thursday instead of their typical 10- to 12-hour shift. The plant produces the Cadillac XT5 and XT6 and the GMC Acadia crossovers and gets door handles and other small parts from suppliers in Canada, the person said.

At week's end, GM also trimmed production from its first shift at Flint Assembly in Michigan and at CAMI Assembly in Ontario, according to Reuters. GM was set to resume normal production during the second shift.

A spokeswoman for Magna International Inc., North America's largest supplier with a significant manufacturing presence on both sides of the border, said a "handful" of its factories in Canada and the U.S. had to adjust or reduce shifts. That included a seating facility in the U.S. that was idled because the plant it produces seats for was shut down.

About $100 million in automotive parts cross the Ambassador Bridge on a daily basis, according to the Automotive Parts Manufacturers' Association in Canada. Some companies were looking at alternative methods of transporting goods over the border, including Ford, which reportedly mulled using air freight to move some parts if the blockade persisted.

But any notion of simply avoiding the Detroit-Ontario pinchpoint is unrealistic, said Charles Klein, manager of the Detroit office of CES Group, a national logistics firm that tracks container movement.

Why? Because the entire North American transportation and logistics system is stressed as it attempts to crawl back from two years of COVID-19 and semiconductor disruptions.

"People in the auto industry might be looking for a quick fix to get their shipments, but there's no real alternative to moving thousands of trucks across the border and on to their customers," Klein told Automotive News last week.

"You still need truck drivers and the trucks they drive. And we still have an enormous shortage of drivers. You could look for a way to put things on rail, but the rail networks are really stretched to the limit right now. You could possibly move the crossing to Toronto and Buffalo — but you'll still need trucks and truck drivers.

"We're still playing catch-up for all the traffic that's been delayed for the past year and a half. So the idea that you could somehow move around that bridge and use an alternative system — you're just going to find a stressed system somewhere else."

Important components flow both ways over the border.

As an example, Harbour pointed to Honda plants in Alliston, Ontario, and East Liberty, Ohio, which both make Civic sedans. Harbour said Honda is likely to stamp certain components at its Ontario factory and other parts in Ohio, sending full trucks of those parts back and forth between those plants.

"If that stuff doesn't come across the border, I'm forced to shut production down," she said. "That's the risk."

Any prolonged disruption at the border also poses a risk to any automaker looking to launch a new vehicle program in the U.S. in the coming months.

Harbour said the "vast majority" of North American injection molds are sourced from shops in Windsor, which supply established automakers and newcomers alike.

"If I'm a new-launch startup — a Rivian, a Canoo, a Lordstown — you could delay my launch, even if it's just one week or two or four where I can't get components or I can't assemble my tool," she said.

An Ontario court granted an injunction Feb. 11 to end the blockade, but the risk of future disruptive protests could soon factor into auto companies' risk management plans, experts said.

Already, trucking protests in Canada, including the Ambassador Bridge blockade and a convoy of trucks that have paralyzed parts of downtown Ottawa for weeks, have inspired a similar group of protesters in France.

Reuters reported last week that France mobilized thousands of police in and around Paris and set up checkpoints at toll stations on Friday to keep out convoys of motorists converging on the capital for a protest against government COVID-19 curbs.

"We don't anticipate this will just keep happening, but you never know," CAR's Bailo said. "That's what makes risk management so important and also so difficult."

She said the events of the past two years, from the blockade and pandemic-related border restrictions to increased trade uncertainty and the semiconductor shortage, are forcing automakers to reexamine the resiliency of their supply chains. Companies will want to have more control and visibility into them by finding multiple sources for parts, she said

"With the shift to electrification, it's really the perfect timing to start looking at that because you've got new suppliers entering the market," she said.

Lindsay Chappell, Hannah Lutz and Michael Martinez and Greg Layson of Automotive News Canada contributed to this report.