Auto industry feels pressure from border bridge closure
AURORA, Ont. — Canadian auto parts manufacturer Magna International Inc. said Friday it is beginning to feel the impact of the Ambassador Bridge blockades on its business.
The automotive sector, which relies on the quick and easy movement of goods between plants in Canada and the United States, has been hit especially hard.
On a conference call discussing the company’s latest financial results, CEO Seetarama Kotagiri said some customers have had to idle or adjust production schedules as a result of the bridge closure.
“We’re watching it closely and definitely hope it gets resolved quickly,” he said.
Magna shares fell as much as 5.4 per cent in early trading on the news, though they pared losses slightly to sit down $4.64 or 4.5 per cent at $98.41 in midafternoon trading.
The closure of the bridge — which links Windsor, Ont., with Detroit — has so far cost the automotive industry an estimated $600 million, according to the Automotive Parts Manufacturers’ Association, which filed a motion against the protesters on Thursday.
Other Canadian businesses called on elected representatives to take steps to put an end to the blockades in an open letter Friday that was signed by more than 170 industry groups and chambers of commerce.
“The blockades not only strike against the rule of law that protects our rights and freedoms, but also undermine Canada’s international reputation,” the letter stated.
In addition to the pressures stemming from the trucker protests, Magna’s CEO said production for 2022 will continue to be hampered by the ongoing semiconductor supply constraints.
Magna reported that its fourth-quarter profit and sales fell compared with a year ago.
The company also raised its dividend.
Magna, which keeps its books in U.S. dollars, said it will now pay a quarterly dividend of 45 cents per share, up from 43 cents per share.
Honda Canada said it was temporarily suspending manufacturing on one production line during the day shift at its plant in Alliston, Ont., on Friday due to border delays.
Honda said its automotive manufacturing operations in the U.S. were scheduled to run Friday, but the situation was fluid and the company would adjust production as necessary.
Several automakers in Ontario have reduced production this week due to the protest at the border.
The temporary production outages come as automakers grapple with other pandemicrelated supply-chain challenges, including shortage of semiconductor chips used in new cars.