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Trump’s tariff threat rattles auto sector

Posted on 13 June 2018 by admin

U.S. President Donald Trump’s threat to impose 25-per-cent tariffs on auto imports from Canada would devastate the integrated supply chain that has been built up over decades and also cause job losses on both sides of the border, industry experts warn.

“It’s definitely going to impact the whole supply chain of automobiles in Canada and in the U.S.,” says Laurie Tannous, special adviser for the Cross-Border Institute at the University of Windsor.

The North American auto sector is so highly integrated that parts and components can cross Canada and Mexico’s borders as many as eight times before being installed in a final assembly plant.

Some experts say the tariff would be imposed on completed cars while others say it would be charged each time a part crosses into the U.S.

Shifting tool lines to the United States would be so complicated it could take many months if it can be done at all, Tannous said in an interview.

The U.S. initiated an investigation to determine if automobile imports threaten to impair national security.

Imports of passenger vehicles have grown to 48 per cent from 32 per cent of cars sold two decades ago while employment in auto production has declined 22 per cent, U.S. Commerce Secretary Wilbur Ross said.

Trump’s strategy appears aimed at returning the auto supply chain back to the U.S.

While Canada and Mexico currently pay no tariffs, manufacturers in Japan and the Europe Union pay 2.5 per cent but charge American products 10 per cent.

“No wonder Germany sells us three cars for every one we export to Germany,” Peter Navarro, assistant to the president for trade and manufacturing policy, wrote in an op-ed piece in the New York Times.

BMW X-series SUVs assembled in the United States contain only 25 to 35 per cent U.S. content while the high-value engines and transmissions come from Germany and Austria, he noted.

Navarro said Canada has dumped lumber into the U.S. and erected high barriers to harm wheat, barley, beer, spirits and dairy at a disadvantage.

“It’s time for our major trading partners — from strategic competitors like China to key members of the Group of 7 — to realize that the era of American complacency in the international marketplace is over.”

The implications of a high auto tariff would be felt by everyone working in the auto sector and beyond, said Jerry Dias, president of Unifor, which represents Canadian auto workers.

“Sixty five per cent of all parts that go into a Canadian assembled vehicle comes from the United States, so there’s no way they can get out of this thing unscathed,” he said in an interview.

Canada’s auto sector, which is the country’s leading export, employs 120,000 workers — 40,000 in assembly and 80,000 in auto parts and delivers $80 billion in economic activity.

Dias said auto industry bosses won’t sit idly by if Trump hurts their bottom lines by choking off the supply of components before American ones are built.

“You’ll end up with bankruptcies before that happens,” he said in an interview.

Besides, the industry is operating at capacity so there’s no room in assembly plants to add models.

While the impact would be devastating, it’s not clear how many Canadians would lose their jobs, Dias said.

The proposed tariffs would cause between 157,000 and 195,000 American workers to lose their jobs over at least one to three years, according to two U.S. reports.

The impact would increase to 624,000 if auto producers such as Canada retaliate with tariffs of their own, says a report from the Peterson Institute for International Economics.

The U.S. Chamber of Commerce said 760,000 jobs would be lost from tariffs on aluminum, steel and autos.

“And if the administration carries out its threat to withdraw from NAFTA, an additional 1.8 million U.S. jobs could be lost in the first year alone,” it stated in a news release.

Some automakers may shift production to the U.S. to avoid tariffs, but the relocation decisions would have to factor in the costs of broken supply chains, investment uncertainties and less demand for products due to higher prices, said the report.

Prices would rise because the current North American supply chain provides the lowest costs, said Sherman Robinson, one of the study’s authors.

“There’s a reason those value chains are scattered around North America. They’re efficient and cheap,” he said from Washington.

“Right now it is competitive internationally because of NAFTA. It would cease to be competitive once you bring all those value chains inside, especially if you put tariffs on aluminum and steel, which will raise the cost even more.”

Tariffs would add about $6,400 (U.S.) to the price of an imported $30,000 (U.S.) car, said a report from Trade Partnership Worldwide.

Price increases would be more than $8,500 (U.S.) per vehicle unless cooler heads prevail, predicts Tannous.

“If we have a couple of weeks of a cooling-off period and maybe get back to the table on NAFTA and see if we can’t resolve that perhaps all of this will go by the wayside.”


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Auto workers cut off from labour law improvements

Posted on 04 January 2018 by admin

A change mandating 10 personal emergency days won’t apply to employees in the automotive industry, leading to outcry.

Auto work‎ers are feeling Scrooged after learning a new law giving most employees across Ontario a minimum of 10 personal emergency leave days annually — two with pay — doesn’t apply to them.

Employees in the automotive industry, including assembly plants and parts suppliers, are entitled to a minimum of seven emergency leave days under a special exemption in Bill 148, the recently passed legislation on workplace changesthat includes a $2.40 rise in the hourly minimum wage to $14 on January 1 and $15 in 2019.

Those seven days can be used for sickness and family emergencies, with another three days for bereavement leave. The requirement has been in place since last January as part of a pilot project with the government.

“For some reason the Ontario auto industry feels that we are not to be treated equal to the rest of the province, like we are lower class,” a Toyota autoworker from the company’s Cambridge assembly plant told the Star.

“Don’t get sick, don’t have family members that get sick and need personal days,” added the worker, who was granted anonymity for his comments. Toyota workers are not unionized.

Labour Minister Kevin Flynn downplayed worker concerns, saying the auto sector “has, in many cases, earned a reputation as an employer of choice and often exceeds the minimum requirements of the Employment Standards Act . . . when it comes to leaves, vacation and sick pay.”

Toyota, for example, said full-time employees get more than the legal minimum and workers hired on contract will be able to take two paid sick days once the legislation takes effect.

The union representing workers at Fiat Chrysler, Ford and General Motors, has set up a meeting between its president, Jerry Dias, and the labour minister to seek a “clarification” on personal emergency leave.

 “Unifor is concerned over reports of changes to Regulation 502 of Ontario’s Employment Standards Act that may negatively impact workers in the auto sector,” the union said in a statement Thursday.

Flynn said the minimum standard of seven days is lower for the auto industry because it operates in “a particularly competitive global sector.”

“The auto sector is tremendously important to our economy. It employs thousands of people in well-paying jobs across the province,” Flynn added in a statement.

The pilot project was recommended by advisers who conducted a broad government review into workplace changes, and noted any auto sector worker with deaths in their close families are entitled to a minimum of three bereavement days in each case.

The pilot project will be evaluated next year “to make sure we’re achieving fairness for all Ontario workers,” Flynn added.

New Democrat MPP and labour critic Cindy Forster (Welland) said the treatment of auto workers is “incredibly disappointing.”

“It’s time for this unfair regulation to change, immediately. Treating auto workers worse than all other workers is just plain wrong,” added Forster, whose party has promised to mandate five paid days for illness or personal emergencies if it wins next June’s provincial election.

“These people work hard, often in physically demanding roles, and they certainly deserve treatment that’s equal to what everyone else in the province is getting.”

Workers at auto parts plants have also raised concerns about the seven-day limit.

There are about 124,00 auto sector workers in Ontario.

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Encouraging automotive innovation to create more opportunities and promote a healthy environment for Canadians.

Posted on 22 September 2017 by admin

Canada’s Innovation Minister meets with Toyota Chairman to discuss the auto maker’s plans to expand its clean technology markets in Canada

Canada is an ideal market for the development and early adoption of emerging technologies, such as zero-emission vehicles, which have the potential to create opportunities and promote a healthy environment for Canadians.

That message was delivered today by the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development, during a private meeting with Takeshi Uchiyamada, Chairman of the Toyota Motor Corporation.

Minister Bains and Mr. Uchiyamada discussed Toyota’s investment in manufacturing operations in Canada. They also discussed potential ways to reduce greenhouse gases through the adoption of zerio-emissions vehicles.

Minister Bains welcomed the opportunity to continue working with Toyota to expand its markets in Canada. He also discussed the government’s Innovation and Skills Plan, a multi-year effort to create well-paying, middle-class jobs for Canadians by positioning this country as a global leader in innovation.

As part of this plan, the government is investing in attracting top talent from around the world, equipping Canadians with the in-demand skills for jobs of the today and tomorrow and attracting global investments to Canada.


“I welcome the opportunity to engage with Toyota as the company looks for global opportunities to grow. Our government is committed to making Canada a destination of choice for global companies looking to develop and introduce emerging technologies, such as fuel cell vehicles, which have the potential to create opportunities and promote a healthy environment. Putting Canada at the forefront of innovation and technology adoption will generate new business opportunities and create high-quality, middle-class jobs for Canadians. It will also equip Canadians with the in-demand skills they need for the well-paying jobs of today and into the future.”

– The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development

“Toyota has been invested in the Canadian community for over 50 years, and we look forward to building stronger relations with the Government of Canada to help them build infrastructure required for Canadians to adopt new automotive technology, including hydrogen fuel cell vehicles such as the Toyota Mirai. There is still a lot of work to be done, but Toyota will continue supporting the government’s efforts through a collaborative relationship in bringing more greenhouse-gas-friendly technology to Canada.”

– Takeshi Uchiyamada, Chairman, Toyota Motor Corporation

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The shape of SUVs to come – a big departure from SUVs of old

Posted on 13 October 2016 by admin

We’ve come a long way from the slab-sided Hummer, with its barn-door aerodynamics and unrepentant gas-guzzling. The latest crop of SUVs unveiled at the Paris Motor Show are hardly recognizable as members of the same automotive species. And, well, the future’s not pretty.

The Hummer was best suited to invading Panama, but found its way into popular culture and onto public streets thanks in large part to Arnold Schwarzenegger’s affinity for it.

In the 1990s, the Hummer was easily identifiable as an SUV. It was the obvious next step for the genre of vehicles that began with the Willys Jeep in the 1940s. Originally designed for the military, both vehicles were ideal transport for anyone who wanted to look tough or macho parked outside Loblaw’s. Visually, they were defined by flat surfaces and square edges, high ground clearance and big chunky tires.

The new SUVs on display in Paris were exactly the opposite: curvaceous with little ground clearance, big wheels and low-profile tires.

BMW’s X2 concept embodies these trends. It’s remarkably low. It’s barely taller than a sedan, with little additional ground-clearance. You won’t be crawling over rocks or through deep water in this SUV. Its huge, diamond-cut 21-inch alloys are wrapped in low-profile tires better suited to sports cars. If you forget that it’s ostensibly supposed to be an SUV – technically a crossover, but that’s splitting hairs – it actually looks good. It was one of the more successful new designs from the show.

A toned-down version of the X2 will likely go into production as a sportier, pricier version of the compact X1.

The Infiniti QX Sport Inspiration concept is similar in proportion to the X2. It was previously shown in Beijing, but updated for Paris with more blingy bits, including bronzed wheels. It previews the upcoming QX50.

Call it the high-waisted look. The waistline on cars, the line that runs from the edge of the hood under the side windows, has been creeping up steadily. The result is that most new models you see here have narrow side windows. From inside, it’s like looking out of a bunker.

And cladding – so much chunky black plastic around the wheel arches. Why? It’s an easy way to make even the softest of crossovers look rugged. The X2 is guilty, so is the Infiniti QX, the Lexus UX and the Land Rover Discovery.

The Lexus UX concept is a love-it or hate-it thing. It’s over-the-top aggressive, like deep-sea-monster meets origami-gone-wrong. It has a passing resemblance to Lamborghini’s old Urus SUV concept.

“The biggest challenge for any designer is always to create something new and original, yet with relevance to both the customer and the brand,” said Simon Humphries, one of its designers. The UX is certainly original.

The Mitsubishi GT-PHEV concept provides a jarring glimpse of a “high-end next-generation” SUV. It has creases and chrome and lights all over the place. It’s a textbook example of the high-waisted trend. The concept has three electric motors, in addition to a conventional engine. It could run on electric-only power for 120 kilometres, according to the company.

By comparison, the Mercedes-Benz Generation EQ concept is clean and simple. Sure, it has a blue light-up grille, but that’s tame in this company. There are no extraneous lines. The surfaces are soft and rounded. It looks like it could go into production tomorrow, but it will take much longer than that. The production version – Mercedes’ first all-electric vehicle – will have a range of around 500 kilometres and go on sale within three years.

Compared with other SUVs unveiled in Paris, the Audi Q5 is extremely conservative. That’s because it is a production car, not a concept. But it’s also because the Q5 is predictable. It’s nearly identical to the smaller Q3 and larger Q7. In Europe, it will go on sale with a choice of three-diesel and two gasoline-engines with outputs ranging from 143 horsepower to 272. A hybrid will also be on offer.

Mercedes gave the compact GLC Coupe the full AMG treatment, adding a 362 horsepower twin-turbo V-6 under the hood. This SUV is more suited to the race track than it is to an off-piste romp through the desert. It’s the latest in Benz’s growing SUV lineup, which features five different models.

Of all the new SUVs in Paris, the Land Rover Discovery most closely resembles the Hummer and Jeeps of old in style and ethos. The Land Rover is slab-sided and tall, with useful ground-clearance and deep-water wading capability. But any hard edges have been rounded off, and where the Hummer and Jeep had canvas roofs, the Discovery’s is made of huge glass panels. The three-row SUV will be on sale by mid-2017 with a starting price of $61,500.

What would Schwarzenegger think?

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Consumer Reports names its top vehicle picks for 2014

Posted on 19 March 2014 by admin

U.S. electric luxury car Tesla Model S was named by Consumer Reports magazine as its overall top pick for 2014, while Japanese models took five spots in the annual rankings, their worst showing in the 18-year history of the ratings.

The Ram 1500 was named the top pickup truck, the first time a Chrysler model has cracked the top picks list since 1998. South Korean auto maker Hyundai, and German brands BMW and Volkswagen’s Audi also had models topping the 10 Consumer Reports categories.

“The competition in the marketplace has grown fierce. There was a time when a handful of brands dominated our top picks list, but in recent years we’ve seen a more diverse group make the cut,” Rik Paul, Consumer Reports’ automotive editor, said in a statement.

The top picks were chosen from more than 260 vehicles tested by Consumer Reports for reliability, safety and road-test performance.

The battery-powered Tesla Model S was chosen best overall for its “exceptional performance and its many impressive technological innovations,” Consumer Reports said, noting it was “pricey” at $89,650.

California-based Tesla Motors Inc, which was founded by billionaire entrepreneur Elon Musk in 2003, said it expects to deliver about 35,000 of the model this year. By comparison, the best-selling car in the United States last year, the Toyota Camry, sold about 408,000 in 2013.

Consumer Reports hasn’t named a best overall since a Lexus model took the top honours in 2010.

Honda and Subaru were the only auto makers with more than one model in this year’s top picks. Honda’s Accord won best mid-size sedan, and its Odyssey was named top minivan. The best compact car went to Subaru’s Impreza, and its Forester model was picked as the top small SUV.

Toyota’s Prius hybrid, with its 44 miles-per-gallon overall fuel efficiency, was named best green car for the 11th consecutive year.


The Audi A6 took top honours in the luxury car rankings for the second year in a row, while the BMW 328i was chosen best sports sedan, also for a second straight year.

Japanese auto makers, which historically have taken more than 70 per cent of the top picks, managed to win only five of the 10 categories, the worst showing since Consumer Reports began publishing the list in 1997.

Consumer Reports also released its annual report card on car brands. It rates each manufacturer’s individual brands, with a composite score based on reliability and road testing.

Lexus, Toyota’s luxury brand, came out on top for the second straight year, with a score of 79. Honda’s Acura was second with 75, followed by Audi with 74.

Consumer Reports said of Lexus: “Its models are usually quiet, comfortable, and fuel efficient, and they’re among the most reliable cars made.”

Subaru and Toyota tied for the fourth spot. Mazda, Honda, Infiniti, Daimler AG’s Mercedes-Benz and BMW rounded out the top 10.

Detroit-based manufacturers fared poorly in this ranking, with Fiat Chrysler Automobiles’ Jeep tying Ford for worst of the 23 brands listed. Consumer Reports said both Jeep and Ford models had reliability problems.

Fiat Chrysler’s Dodge and General Motors Co’s Cadillac were also among the four lowest-scoring brands.

GM’s Buick and GMC tied for 12th, the highest rating for Detroit auto makers.

Consumer Reports said it didn’t have brand report cards for Fiat, Tata Motors Ltd’s Jaguar and Land Rover brands, Ford’s Lincoln, BMW’s Mini, Mitsubishi, Porsche, Fiat Chrysler’s Ram, Toyota’s Scion, Daimler’s Smart and Tesla because of a lack of data.

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