Since 1988, the giant presses at Lanex Manufacturing on the edge of Windsor, Ontario, have been building everything from Corvettes to Honda minivans.
But lately, as President-elect Donald J. Trump prepares to enter the White House, there has been growing anxiety about the future at the factory. He threatened to impose a 25% tariff on all goods exported from Canada to the United States. In Windsor, it would destroy its lifeblood, the automobile, and everything that comes with it.
“Everyone's waiting for the next shoe to drop,” Lanex President Bruce Lane said in a boardroom whose walls are made of painted concrete blocks. “If Windsor loses its car business, Windsor will not survive.”
Few Canadian cities are as acutely aware of the integration of our two economies as Windsor. The city is located across the Detroit River from Detroit, where Canada's maple leaf flag often flies next to the American flag. And no industry has been intertwined across national borders for as long as automobile manufacturing.
“Workers here in Windsor are more exposed to trade with the United States than anyone else,” Prime Minister Justin Trudeau said during a recent visit to the city's steel mills.
He added that Trump is “proposing tariffs that will not only hurt people here in Windsor, but people across the country, and indeed the people of the United States.”
Windsor shares two major landmarks with Detroit. One is the $5.7 billion Gordie Howe International Bridge, scheduled to open this year, and the other is the 96-year-old Ambassador Bridge, which carries about $300 million in cross-border trade each day. Of Canada's $440 billion in annual exports to the United States, only oil and gas exports more than cars, trucks, and auto parts.
But Canadian officials are taking Mr. Trump at his word that he will follow through on his tariff threat, and Mr. Lane and other auto industry officials are already preparing for the potential impact.
George Papp is CEO of Papp Plastics, whose headquarters are located near the impressive new suspension bridge. He said U.S. customers, primarily automakers, simply enforce the terms of their contracts with the company and deduct the tariffs from the amount they pay.
“Who's going to get hit?” Papp said. “Me, people like me, and companies like me.”
Flavio Volpe, president of the Automotive Parts Manufacturers Association, a Canadian industry group, estimated that most of his members have single-digit profit margins and that the tariffs threatened by Mr. Trump would be disastrous.
Automotive ties between the two countries were strengthened in 1965 when Canada and the United States reached an agreement that effectively eliminated industry borders. Currently, 90 per cent of cars and trucks manufactured in Canada are shipped to the United States, primarily by rail.
At Lanex, tiny metal parts that most drivers never see are forged using more than 600 tons of pressure from the company's presses. Their journey shows how entwined the two countries' auto industries are.
As a small supplier, Lane doesn't work directly with automakers, instead selling his products through major parts manufacturers. The Sheetrock hooks that Lanex makes for Honda minivans are sent to another factory in Ontario, where other parts are installed before being shipped to an assembly line in Alabama owned by Japan's Honda.
Lane's factory sent the parts to Michigan for heat treatment, then brought them back to Windsor for further processing before selling them to companies in the United States.
“Windsor is used to going back and forth across the border,” Lane said. “It's like getting out of bed in the morning.”
The disruption from potential tariffs comes at an already difficult time for Canadian auto businesses. For many auto parts manufacturers, business has not returned to pre-pandemic levels due to sluggish auto sales. In 2020, Lanex had approximately 60 employees working two shifts, but now approximately 24 employees work one shift.
The anxiety is especially acute in Windsor, a large city with a population of about 484,000. Besides the cargo trucks that rumble across the Ambassador Bridge, the city's most obvious automotive symbol is the massive Stellantis factory, which produces Chrysler Pacifica minivans and Dodge Charger muscle cars.
Stellantis, a city within a city, based in Europe It employs 4,500 workers. With the help of billions of dollars in Canadian subsidies, the company is building a battery factory in Windsor in a joint venture with South Korean company LG, which recently received a C$1.89 billion (about $1.3 billion) The company will invest a considerable amount of money to renovate its assembly plant and manufacture electric vehicles in parallel with gasoline vehicles. -Something with power.
But like many automakers, Stellantis is currently struggling with the transition to electric vehicles and competition from China.
James Stewart, president of the local union representing Stellantis employees in Windsor, said he didn't think the hefty tariffs would necessarily be a fatal blow to Stellantis' operations in Windsor, given the size of Stellantis' investment. He said no.
But Stewart said much of Windsor's economic prosperity is tied to trade with the United States, so the tariffs would be a huge blow, including business closures, layoffs and production cuts.
“We're a suburb of Detroit. We've always felt that way,” he said, adding that it seems like Windsor is “under attack for no reason.”
Trump initially characterized the tariffs as a way to encourage Canada and Mexico to secure their borders to curb the influx of illegal immigrants.
But he also noted that the United States has invested heavily in Canada's military defense, has threatened to use its economic power to annex Canada, and has given no thought to making Canada its 51st province. I made it around. He also spoke out about what he called U.S. “subsidies” to Canada, an apparent reference to the U.S. trade deficit with Canada due to oil and gas imports.
Prime Minister Trudeau is expected to provide details on how he will retaliate against the U.S. tariffs on Monday, when Trump takes office.
However, Canada's relatively small economy makes it difficult for Canada to inflict significant economic harm on the United States, although taxes on certain products may hurt individual states. Retaliatory tariffs would also increase prices in Canada.
Back at the Lanex factory, Mr. Lane said that, by pure coincidence, the company had embarked on a “secret” manufacturing project unrelated to cars that unexpectedly provided a potential hedge against tariffs. He declined to provide further details to avoid informing competitors.
Mr. Papp, a plastics company owner, said he opposes tariffs that would hurt his business, but is a fan of Mr. Trump and understands why the president-elect has argued that tariffs are necessary to rebuild the industry. . In the US.
Papp said that no matter what happens, Canada and the United States will always remain steadfast allies.
“You can't tear our country apart,” he said. “They're bolted on.”
