FEAR REVS UP

WORK­ERS IN CANADA’S AUTO SEC­TOR WORRY WHAT WILL COME AF­TER STEEL TAR­IFFS.

National Post (Latest Edition) - - FINANCIAL POST - ArMina lig­aya in Wind­sor, Ont.

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.”

DAN JANISSE / POST­MEDIA NEWS FILES

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.

GE­OFF ROBINS / THE CANA­DIAN PRESS

Wind­sor auto worker Mike Malott, a 20-year vet­eran in the in­dus­try, talks with his daugh­ter Jada in their home on Tuesday.

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