“Whether or not they ever be put into place, the damage is done,” said Greig Mordue, a former auto industry executive and associate professor at the W. Booth School of Engineering Practice and Technology at McMaster University.
He says Trump’s threats have already changed the landscape. Whether he goes ahead with the tariffs or not, or whether he carves out specific exemptions, the threat alone will drive investment out of Canada and into the U.S.
“For at least the next four years, there will be no serious investment in the Canadian automotive industry,” said Mordue.
Yeah, but we have history and old blueprints and universities full of people who know how to make good cars. And an existing advanced auto industry (just integrated with the US). OP was just guessing at a lot of things, and missed the mark quite a bit.
I wasn’t guessing. I cut my teeth in automotive. I have an education in automotive engineering, amongst other things, and I have extensive working experience at both the retailer, and Tier 1 and 2 manufacturing experience earlier in my career. Not proclaiming to be the end all be all, or the smartest person in the world, or that I know much of anything, but I’m also far from being the village idiot on this topic.
It ain’t happening bud, I’m sorry. There’s not enough marketplace to recover the costs, it would be complicated to transport finished goods to other markets, especially considering that most of the manufacturing facilities are located in southern Ontario. Which means you’d have to pretty much stick everything on a ship, and that adds costs, versus trucking to the states. It obviously can be done, easily enough, but it cuts into margins at higher production levels. Margins aren’t high in this industry, and the labour is mostly unionized, or very quickly will be if it’s not, and that adds a dearth of costs. Volatility in commodities pricing alone would be enough to knock something like this into non-profitable territory. It likely wouldn’t be profitable for a decade either. Even look at something like Tesla, it took them 17 years to turn a profit, and it actually doesn’t really turn a profit from its cars, it’s actually from the sale of environmental credits.
If you are going to see any automotive investment and new OEMs, something like a new Tesla or whatever, it’s almost certainly going to be in Europe, not North America. Donald Trump has all but guaranteed that there’s not going to be one dime spent in deepening or expanding automotive manufacturing capabilities spent here, for quite a while, likely a decade or more if he keeps it up. Canada has learned its lesson here, and I would imagine if anything happens in the automotive sector, it’ll be a contraction, not an expansion. Even as close as four of five months ago, there have been new plans launched for factory expansion and construction of tier 1 suppliers in Southwestern Ontario, but I would bet you that’ll be off now. We’ll have to wait and see though, only those closest to the projects will know, and nobody else’s crystal ball can predict the future.
And let’s not even begin to consider that China is foaming at the mouth to dump mostly state backed, very viable electric cars here, for a fraction of the price tag that we’ve been paying. We aren’t going to be able to block that off forever, they’ll find a way around the tariffs eventually. How are you going to compete with that?
I’m sorry then. What I read there is that Canada doesn’t already have an auto industry, and if that had been what you meant, that could only be a guess.
I’ll respond to the rest on the thread with just you.