The Ambassador Bridge Blockade Was a $155 Million Hit to Automakers

February 15, 2022
Ambassador Bridge blockade disruptions
Ford’s Rouge Electric Vehicle Center in Dearborn, Michigan, where the Ford F-150 Lightning will be built.

Now that the Ambassador Bridge is fully open, automakers are starting to assess the damage. Millions in unexpected expenses and manufacturing delays have extinguished whatever traces of normalcy were left in factories following a year of worsening supply shortages. Now the question is, who will absorb the costs?

Automotive industry analysts at Anderson Economic Group found that the total impact of the Ambassador Bridge blockade is likely to be $155 million for automakers on both sides of the US – Canada border. Lost wages at manufacturing plants are estimated to reach $145 million. 

Just as some automakers were beginning to use airplanes to fly parts across the border, Canadian Prime Minister Justin Trudeau invoked emergency powers to force the bridge back open. 

The automotive industry is Canada’s second-largest economic export sector, right behind natural resources such as oil and forestry materials. One-quarter of all goods traded between the two countries passes through the Ambassador Bridge linking Detroit, Michigan with Windsor, Ontario. The corridor is crucial for $100 billion in annual trade. 

The silver lining

Ambassador Bridge blockade disruptions
General Motors Lansing Delta Township in Lansing, Michigan. (Photo by John F. Martin for General Motors)

Michael Brady, co-chair of the automotive industry group at Warner Norcross + Judd, told Automotive News that one silver lining coming out of the Ambassador Bridge blockade is that the auto industry was much better prepared to handle unexpected disruptions following 2 years of challenges coming from every direction. Pandemic-related shutdowns and supply chain constraints have ultimately made the automotive industry as a whole more resilient.

Still, adapting to disruptions results in higher production costs. Someone will have to foot the bill. Brady also said that contractual terms are likely to determine who will ultimately absorb the cost of the Ambassador Bridge blockade. Some automakers are more likely to absorb the hit, while others may fight for every last dollar.

Complicating matters further, automakers know they can’t live without the suppliers, and suppliers know that they need good relationships with their clients if they are to stay in business. Right now, suppliers and automakers are taking a wait-and-see approach. They are most certainly consulting their legal and financial teams before making any moves.

Get the most when you sell your car.

Compare and choose multiple offers in minutes:

COVERAGE YOU CAN TRUST

CarEdge Extended Warranty

Peace of mind without the markup.
Flexible terms & pricing.
Coverage details

 

Discover the right insurance for you

Compare different providers with no spam phone calls:

Call us 855.786.1144

M-F: 8AM – 9PM EST
Sat: 10AM – 6PM EST

Save more with CarEdge+

CarEdge+ Membership pays for itself for all things auto.

Unlimited access to CarEdge car buying tools, our team of Auto Experts, savings on maintenance, and repairs, and more.

Join CarEdge+
Learn More

Join CarEdge for Free

Get instant access to members-only resources.

We'll email you updates
Or, we can text you
Hidden
Subscribe to receive:

Consultations

$50 per 15-minute live session

Chat with a CarEdge Auto Expert to make sure you’re negotiating a fair deal.

  • Connect live on video or call.
  • Get live advice on any part of the buying process.
  • Ask us anything about your journey.

CarEdge Coach

$99 one-time

Partner with a dedicated coach to help you save thousands on your car deal.

  • Your coach will guide and assist through your journey.
  • Access to all premium resources, like Deal School 3.0, email templates and market pricing!
  • Learn how to buy a car with leverage and confidence.

CarEdge Concierge

$999 one-time

A dedicated concierge to handle all aspects of your car deal for you.

  • Concierge handles all communication with the dealer.
  • We negotiate the selling price, trade in, financing, warranties and insurance.
  • We listen, do the leg work and secure your deal.

Auto insights. Right in your inbox.

We'll email you updates
Or, we can text you
Hidden
Subscribe to receive:

Get the latest trends and money-saving strategies, once a week.

We'll email you updates
Or, we can text you
Hidden
Subscribe to receive:

Related articles

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Share This