FEAR REVS UP
WORKERS IN CANADA’S AUTO SECTOR WORRY WHAT WILL COME AFTER STEEL TARIFFS.
Mike Malott has survived massive turmoil during his nearly 20 years as an automotive worker here in the heart of the Canadian industry — but now that his livelihood is in the crosshairs of a U.S. president who appears hell-bent on restricting cross-border trade, he is frightened.
The 43-year-old assembly line worker and other residents of this city have been on edge for months during strained NAFTA talks that have included intense scrutiny of auto production.
But President Donald Trump’s post-G7 Twitter tirade about imposing a 25-per-cent tariff on auto imports from Canada could have potentially devastating consequences for the integrated supply chain that has been built over decades and cause job losses on both sides of the border.
Some fear the penalties could drive the city’s auto plants, including the Fiat Chrysler factory where Malott has spent the majority of his career, out of Windsor and the country altogether.
“I can’t even imagine what the city would look like without Chrysler in it,” Malott said in an interview on Tuesday at the suburban Windsor home he shares with his wife, three children and a chocolate lab.
“This city would become a ghost town.”
Malott is one of the roughly 6,000 people employed at the assembly plant, the largest manufacturing workplace in Canada, according to a 2017 report from the Automotive Policy Research Centre at McMaster University in Hamilton.
He worries he’d have difficulty finding an equivalent job in the city with his skill set if he were to lose his job at the plant, which typically pays upward of $30 an hour.
“If I don’t have a Chrysler job, I don’t have what I have today.”
Windsor would be the epicentre of a tariff fallout that could impact Ontario’s entire manufacturing base and reverberate across the country. Canada’s auto sector, the country’s leading exporter, delivers roughly $80 billion in economic activity annually. It employs some 500,000 Canadians through direct and indirect jobs.
The city has long been synonymous with the auto industry. But the industry was decimated in 2008’s Great Recession, which saw both the Ontario and federal governments in 2009 step in with $10.6 billion to Chrysler Canada and GM Canada to keep them afloat.
GM closed its last plant in Windsor in 2010, ending its 90-year-relationship in the city. Ford still has two engine plants in the area, employing roughly 2,330 people between them — far from the six plants it had at one point.
But the city still wears its automotive credentials with pride. Posted outside of the FCA Windsor assembly plant is a sign that reads: “Made. Right. Here. Chrysler Pacifica. Windsor Proud.”
The sector’s health, however, remains heavily reliant on the U.S. Canada exported some $63-billion worth of automobiles in 2016, 96 per cent of which was to the U.S., according to Statistics Canada and the U.S. Census Bureau. On top of that, the country exported roughly $21 billion in auto parts in 2016 — 90 per cent of which was shipped south of the border, according to the APRC.
Every Canadian auto assembly job creates nine spinoff jobs — ranging from parts suppliers to restaurants — according to the Canadian Vehicle Manufacturers’ Association.
The automotive industry and the ancillary businesses are still the “bread and butter” of Windsor, but the city has been making efforts to diversify into other industries and skills in areas such as information technology, said Mayor Drew Dilkens.
“Nothing changes quickly, but we’re committed to diversification,” he said.
Auto-parts makers have also tried to diversify, said Jonathon Azzopardi, CEO of Windsor-area Laval International and a board member of the Automotive Parts Manufacturers’ Association. Yet, roughly 70 per cent of the association’s members send their wares south and many products cross the border roughly seven times in the process, he said.
The recent U.S. imposition of steel and aluminum tariffs will already constrain their profitability, which would be exacerbated by an auto tariff.
“Those who still rely heavily on the U.S. and the auto industry should be pretty concerned,” Azzopardi said.
“It could deal a death blow to the automotive industry for Canada.”
The tariff threat looms as the auto industry has just recovered from the 2008 recession. The sector employed an estimated 140,404 people in 2016, after adding roughly 14,700 jobs over the preceding four years, according to McMaster’s auto centre.
Trump’s comments have also cast uncertainty on planning in an industry that makes decisions on new vehicles five years in advance, said Ken Lewenza, former president of the Canadian Auto Workers, now an adviser for Unifor in Windsor.
Many boardrooms in the auto industry are likely hitting the brakes on their plans as a result, he said, as the North American automotive supply chain operates “almost without borders.”
Detroit, or Motor City, sits just across the river from Windsor — and the GM and Chrysler logos emblazoned on the tallest tower of the American city’s skyline serve as a perennial reminder of their mutual ties.
“You can’t shut down the Canadian operations without affecting U.S. operations. And vice versa,” Lewenza said.
“This, quite frankly, would be a real challenge for the auto industry and be a longer type problem.”
Ontario’s auto sector employs an estimated 124,000 people. A blow to the thousands of jobs in auto towns, including in Alliston, Brampton, and Oshawa, would also have a ripple effect on the restaurants, cafés, stores and other businesses that rely on auto workers’ patronage.
Auto manufacturing is still a crucial part of local economies even in cities such as affluent Oakville, a bedroom community for commuters to Canada’s financial heart in Toronto.
In an industrial section of the tony GTA community, 18-wheelers passed through the gates on Tuesday morning at the Ford Assembly Complex, which employs about 4,600. The staff parking lot was packed with Fords and Lincolns put together by workers at the plant.
Peter Giannopoulos, owner of the nearby Sunlight Grill, is one of the entrepreneurs praying that Ford stays.
“We get a lot of Ford traffic here. You come here on a Friday and you see the chits that we have for take-out or deliveries, you’d be shocked,” Giannopoulos said, adding several of his neighbours work at the plant. “Even though Oakville has its rich side, there’s a lot of middleclass people here who have been working at Ford 20 or 30 years.”
Back in Windsor, a stone’s throw away from the FCA plant, the Penalty Box restaurant is filled with diners. Auto workers’ breaks, at less than 30 minutes, don’t offer time to stop in for a sit-down meal, but they come on their down time, said owner Van Niforos. “The plant means a lot to us here ... Everyone in town profits from them being here.”
At just 14, Windsor auto worker Mike Malott’s daughter Jada is already concerned about her economic future.
“I’m scared I’m going to have to leave my city to find work,” she said. “That’s my biggest fear.”
Chrysler Pacifica models made in Windsor, Ont., on the way to the U.S. President Donald Trump’s threat of a 25-per-cent tariff on Canadian vehicles could have devastating consequences for the integrated supply chain built over decades and cause job losses on both sides of the border.
Windsor auto worker Mike Malott, a 20-year veteran in the industry, talks with his daughter Jada in their home on Tuesday.