Trucker Protests Creates Problem for Struggling Automakers
It is no surprise the car buying industry is facing continued struggles from the effects of the pandemic. Unfortunately, the hits keep coming. Due to an ongoing protest involving heavy trucks and large semis blocking traffic in downtown Ottawa and other parts of the country, automakers are suffering to meet production goals because of the diminished traffic on the trade routes between the U.S. and Canada because of the trucker protests.
The pandemic had a strong effect on the auto industry
The global pandemic has affected every industry in various degrees of severity. The auto industry have felt a significant impact from the ongoing pandemic. To put it simply, automakers are having trouble getting vehicles off the production line. This is caused primarily by the chip shortage affecting a number of industries worldwide. When new vehicles are not getting into the hands of buyers, then those buyers shift their focus to the used market, which is now barren or marked up significantly.
While the pandemic may be slowing down at this point, the auto industry may still have difficulties rebounding to pre-pandemic levels. As vehicles become more and more reliant on computer chips, so has just about everything else. Competition for these chips sparked by the increase in graphics card needs by gamers and cryptocurrency enthusiasts has made it hard for the chip supply to meet the demand.
As if the chip shortage wasn’t enough, here come the trucker protests
Border disruptions caused by the protests in Canada have caused a significant impact on assembly-line production on both sides of the border. CNN mentions auto plants from Toronto, Ontario, all the way to Georgetown, Kentucky, a distance of nearly 600 miles, are having their assembly lines slow or shut down because they cannot get needed parts across the border. Plants such as GM’s Lansing Delta Township Assembly and Toyota’s factories in Ontario are sending workers home early and telling them to stay home for up to a week.
According to ABC News, the protests, which oppose coronavirus (COVID-19) vaccine mandates, has forced truckers in the Detroit area who wish to get around the blockade and into Canada, to drive 70 miles north to Port Huron, Michigan, and cross the Blue Water Bridge, which is seeing delays of up to 4 1/2 hours. Typically, truckers would be using the Ambassador Bridge, an international suspension bridge connecting Detroit, Michigan, to Windsor, Ontario. Smaller vehicles have been redirected to a tunnel connecting Detroit and Windsor that larger semis cannot get through.
Is there an end in sight?
While the protests rage on and motivate other truckers worldwide to participate in protests, automakers are worried that this may worsen before it gets better. NBC News mentions, “there is no question it is having a negative impact, and it will only get worse the longer it lasts.”
U.S. officials have started doing what they can to help alleviate the situation. “President Joe Biden is focused on this, and we are working very closely,” says White House spokesperson Jennifer Psaki. On the Canadian side, Prime Minister Justin Trudeau stands firm by the vaccine mandates and dismisses any chance of lifting them.
Changes to the car industry may have happened because of the effects from the pandemic. But now, the protests in Canada that is spreading to other countries is worsening the issues. CEO of the Center for Automotive Research, Carla Bailo, mentions “there are going to be changes” and alludes to manufacturers needing to start building warehouse inventories like they used to. In addition, they may need to look into dual sourcing parts, so there is a failsafe in the event of something like the protests happening again.