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The Street

Business

M. Corey Goldman

Getting a New Car Just Got Harder. Blame Canada.

Canada Ford Honda Lincoln (Organization) Chevrolet Windsor

Those waiting to take the keys of their shiny new Ford Edge, Lincoln Nautilus, Dodge Charger or Honda Civic are likely going to have to wait a little longer.

And they can blame Canada, eh.

Truck blockades of U.S. border crossings, including the economically vital bridge to Detroit, have forced the shutdown of two of Ford's (F) Canadian plants and reduced production at another, the automaker said Wednesday.

Toyota (TM) and Honda (HMC), meantime, said they were likely to close some production lines as well. Stellantis's (STLA) Windsor assembly plant, home of the Chrysler Pacifica, Pacifica Hybrid, and Voyager, has been forced to "short shift its first shift due to parts shortages," per Automotive News Canada.

The production slowdowns and closures come as trucker protests against Covid-19 vaccine mandates and quarantines that have disrupted Ottawa, Canada’s capital city, as well as Toronto, home to more than 5 million people and the country’s financial hub, enter their third week, with no signs of letting up.

And what started as a bemusing, American-like revolt in normally staid and passive Canada is quickly turning into the next chapter of the ongoing supply chain disruption story that has impacted the North American auto industry for well over a year.

Indeed, the trucker protests -- which began partially blocking traffic over the Ambassador Bridge between Detroit and Windsor, Ontario, as of Monday night, have already dramatically impacted that delicate supply-chain balance.

Cars Made in Canada, Eh

That in turn could have widespread implications for the North American auto industry, thanks to just-in-time supply chains, which deliver parts to factories as they are needed, supplying only enough inventory to operate for about two days.

A combination of five different global OEMs build more than 2 million vehicles annually at their respective Canadian assembly plants, including Stellantis, Ford, General Motors, (GM) Honda, and Toyota. TM

That has created a delicate balance for the North American auto industry, which relies on a sophisticated and complex system to produce cars and trucks - a balance that has already been suffering from a global shortage of semiconductors.

Shane Wark, the assistant to the national president at Unifor, which represents Canadian autoworkers, told The New York Times on Wednesday that the protests at the border continued to disrupt work at Unifor-represented auto plants. That's resulted in short-term layoffs at a Ford engine plant in Windsor, a Ford assembly plant in Oakville, near Toronto, and the Windsor assembly plant of Stellantis, the company that owns Fiat Chrysler.

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A Big Blockage

“These blockades are creating added hardship on Unifor members and their families in the auto sector, following two years of extraordinary production and supply chain disruptions, and must come to an end immediately,” Wark said.

In a briefing Wednesday, Jen Psaki, the White House press secretary, conceded that the blockade posed a risk to auto industry supply chains, and that the Biden administration was also tracking potential disruptions to agricultural exports from Michigan into Canada.

Biden administration officials were in close contact with customs agents, officials in Canada and Michigan, and industry stakeholders to speed traffic and monitor the impact on supply chains, she said.

“We’re working to ensure there’s movement,” Ms. Psaki said.

“I think it’s important for everyone in Canada and the United States to understand what the impact of this blockage is — potential impact — on workers, on the supply chain, and that is where we are most focused,” she added.

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What Makes of Cars and Trucks Are Affected?

While not discernible on the road or the dealership lot, Canada is one of the world’s top 10 largest producers of light vehicles. That's thanks to the U.S.-Mexico-Canada, or USMCA, trade agreement, which in theory makes the border between Canada and the U.S. porous, with tax breaks and incentives that enable automakers to produce cars or parts of cars in Canada and ship them south, and vice versa.

So which cars might take longer to show up in consumers' driveways?

Among the makes and models either partially or entirely built in Canada: the Chevrolet Equinox, the Chrysler 300, the Chrysler Grand Caravan and Pacifica, the Dodge Challenger and Charger, the Ford Edge and GT, the Honda Civic and CR-V, the Lexus RX, the Lincoln Nautilus and the Toyota RAV4.

Unfortunately, pickup-truck aficionados and hopeful owners aren't likely to be spared either. Among the models of pickups either partially or completely assembled and made in the Great White North: the Chevrolet Silverado, the GMC Sierra, and the Ford F-150.

Here's a list of the top 25 vehicles made in Canada:

Chevrolet Camaro

Chrysler 300

Honda Civic Si

Dodge Challenger

Acura MDX

Ford Flex

Toyota RAV4

Honda Civic (sedan & coupe)

Lexus RX350

Toyota Matrix

Dodge Charger