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Unifor Local 195 president Emile Nabbout said the Windsor area should prepare for plant closures and productions shifts to the U.S in quick order in the wake of a 25 per cent tariff imposed by President Donald Trump.
“There’s a local company that has existed for 100 years that ships to the U.S., I’ve been told if tariffs are imposed this company will close its doors,” Nabbout said.
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“The U.S. manufacturers and supply chain will have to scramble to find someone to replace production that has been done for 100 years. Trump has not thought this through what deep damage he’ll also do to U.S. manufacturers.”
Ontario Premier Doug Ford called a snap election last week, well over a year in advance of the standard term, to seek a mandate to address tariffs.
Nabbout, whose local represents workers at around 30 of the area’s automotive suppliers, said several owners have told him they’ll be forced close their doors or shift production to their U.S. plants.
“Profit margins are in the 20 per cent range and if you impose a 25 per cent tariff where’s the money coming from,” Nabbout said. “They’ll cease operations.”
Nabbout expects the tariffs to impact local manufacturing in three ways – relocation of production to U.S. operations, during contract bargaining or ceasing operations altogether.
Automotive Parts Manufacturers’ Association president Flavio Volpe has warned the highly integrated automotive industry could grind to a halt within a week as tariffs disrupt the just-in time supply chain.
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“With key automotive supply routes now under threat, companies must prepare for potential temporary closures, workforce disruptions, and severe economic fallout if these tariffs remain in place,” Volpe said in a tweet Monday.
Laval International president Jonathon Azzopardi said his Oldcastle-based firm ships 85 to 90 per cent of its production to the U.S.
“A lot of local companies, 100 per cent of their production goes to the U.S.,” said Azzopardi, past chair of the Canadian Association of Mold Makers.
“For the majority of us, the impact will happen immediately. I have work on my floor that’ll cross the border this week.
“My client will get hit by a 25 per cent tariff and he’ll immediately take those costs into consideration in no longer considering Canadian sources in his next round of work.”
With a tariff war with the U.S. breaking out for the second time in eight years, Azzopardi said every senior executive on either side of the border is looking at all options. Many local companies also have plants in the U.S.
“I know for a fact, some companies already have moved materials and equipment across the border to prepare to shift production to the U.S.,” Azzoparidi said. “It’s already happening.
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“Companies have also been moving inventory in either direction across the border to avoid tariffs.”
Azzopardi said its vital for Windsor suppliers to maintain relationships with their U.S. customers in hopes the tariff war will be brief. He said his American customers are equally unhappy with the tariffs.
“Most of us will take a haircut to maintain those relationships, but you can’t do that long term,” Azzopardi said.
“We could always argue, North America is more expensive to produce in, but there’s stability.
“Now China or India are being seen to be more stable than the pillars of the G8 countries.”
Unifor Local 200 president/chair of the union’s national auto council John D’Agnolo said this a dangerous time for any local company that is to renew a contract with an U.S. customer.
“Anyone who has a contract coming up, I’d be worried,” D’Agnolo said.
“They won’t invest in Canada if tariffs are in place. Those with established contracts, have some time.”
D’Agnolo hopes the fact the auto industry operates on three-to-five-year windows for planning new programs will also help take us beyond the end of President Donald Trump’s term in January 2029.
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“My hope is the OEMs (Original Equipment Manufacturers) are making these decisions more with an eye to the long-term future of the industry,” D’Agnolo said.
“Our problem is he really just wants money from other countries to fund his programs. It’s not about the border, the auto industry or unbalanced trade ratios.
“Ford’s Kentucky Truck Plant has 8,600 employees alone. That’s more than (Ford) has in all of Canada.”
He said a targeted response to demonstrate just how much the U.S. depends on North America’s integrated economy is required to return stability quickly.
“Our government has to hit him where it hurts,” D’Agnolo said.
“One place we can do that is with aluminum. That will shut down their plants – automotive, canning plants, breweries, defence industry – right away because of just-in-time delivery.
“That will also cause plant closures, unemployment and inflation in the U.S.”
Canada is the fourth largest producer of aluminum in the world after China, India and Russia and manufacturers more than three times more aluminum annually than the U.S.
D’Agnolo added with the U.S. now behaving like an unreliable trade partner, it should be motivation for a diversification of partnerships, investment in resource infrastructure and the return of a national auto policy similar to the Auto Pact.
“The only thing we can do is we have to have an auto policy,” D’Agnolo said. “(Trump) has said to hell with free-trade agreements. We need to have a policy of if you want to sell in this country, then you have to build in this country.”
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