Donald Trump’s trade war just landed a body blow in Windsor, and industry insiders warn that it’s just the start of what could turn into a shutdown of the entire North American auto sector.
Auto manufacturer Stellantis informed its local union late Wednesday that it would be shutting down its Windsor assembly plant for two weeks starting April 7 putting 3,500 people out of work, and that “more changes to the schedule (are) expected in coming weeks.”
Meanwhile, GM’s plant in Fort Wayne, Indiana has increased production of a light truck also produced at its assembly plant in Oshawa.
According to a memo to members, Unifor Local 444 president James Stewart said Stellantis informed him of the closure Wednesday, after Trump’s Rose Garden announcement on reciprocal tariffs.
“While we had heard rumours of potential downtime, the company said there are multiple factors at play, with the primary driver behind the final decision being this afternoon’s announcement from U.S. President Donald Trump of the U.S. tariffs,” Stewart said in the memo.
In a written statement, the company confirmed the closure, and said it was also “pausing production” at its assembly plants in Mexico, as well as hitting some of its U.S. parts plants.
“Immediate actions we must take include temporarily pausing production at some of our Canadian and Mexican assembly plants, which will have an impact to several of our U.S. powertrain and stamping facilities that support those operations,” the statement from Stellantis said. U.S. reports said the company has laid off 900 people in Michigan and Indiana.
“Stellantis continues to assess the effects of the recently announced U.S. tariffs on imported vehicles and will continue to engage with the U.S. administration on these policy changes,” the company added in its statement.
The head of the association representing Canadian parts companies said he expects thousands more layoffs as a direct result of the Stellantis move.
“My guess is that there will be an additional 7,000 to 10,000 people who will be tools down because of this,” said Flavio Volpe, CEO of the Automotive Parts Manufacturers’ Association. “The companies are telling their workers today and tomorrow.”
Volpe has long warned that the entire North American automotive sector could grind to a halt within a week because of the tariffs, given how integrated the supply chain is.
From raw materials to finished vehicle, some components cross the border six or seven times, Volpe has estimated.
The Stellantis shutdowns are just the beginning of much deeper and broader auto industry pain, argued Jim Stanford, chief economist at the Centre for Future Work.
“We will see tens of thousands of job losses and we’ll see them shockingly quickly,” said Stanford, who estimated that there are 130,000 Canadians employed in the automotive assembly and parts-making sectors. “This is an economic disaster and the most infuriating aspect is that there is absolutely no reason for it to occur.”
Parts makers could be particularly vulnerable, said Stanford, because tariffs will likely make some components unprofitable.
“If you’re losing money on every component that you sell, you’re going to stop making them,” said Stanford.
Windsor Mayor Drew Dilkens laid the blame squarely at Trump’s feet and agreed that it’s just the beginning.
“The two-week shut down at Windsor assembly plant is the first of many shutdowns that will happen throughout the auto industry as a direct result of Donald Trump’s tariffs,” said Dilkens, adding that the pain will be felt worldwide.
“The impact of the Trump tariffs will cause global chaos in the auto industry and auto parts sector which will lead to layoffs and increased prices for all new cars and trucks,” Dilkens warned.
“We understand the frustration and uncertainty this brings our members and their families. Your union is closely monitoring the situation and will continue to push for clarity and accountability from the company,” Stewart added.
Stewart stressed that the pain of the auto tariff isn’t limited to Windsor.
“(The tariff) continues to create uncertainty across the entire auto industry. This is not just affecting our plant — it’s impacting facilities in the U.S. and Mexico as well,” Stewart said.
Unifor national president Lana Payne said the temporary shutdown of the assembly plant will also affect parts manufacturers feeding the Windsor plant.
“There’s no way that you can cause a break in one part of the chain and not expect it to have a ripple effect,” said Payne, who added that every auto maker and parts company is looking at its own operations right now.
“Across the industry, they are trying to figure out how how these tariffs will impact their supply chain, and how it is that they can operate under these tariffs,” said Payne. “I said things would get real. Well, they’re real now.”
In emailed statements, spokespeople for Toyota, Honda and GM said there weren’t any current plans to curtail their Canadian operations, but said they’re keeping an eye on the rapidly evolving situation.
“GM Canada’s manufacturing facilities are operating regular production, and we continue to monitor and assess the situation,” said GM spokesperson Marie Binette. Still, GM also announced it had increased production of some models of the Chevrolet Silverado pick-up at its assembly plant in Fort Wayne, Ind.
That same model is also produced at GM’s Oshawa assembly plant.
Toyota Canada spokesperson Philippe Crowe said the company is continuing to work with federal and provincial governments toward “a sustainable solution,” but said if plans to maintain its production here.
“While this is still a highly fluid situation, we have no plans to change our production within the foreseeable future,” said Crowe. “Our vehicles are in high demand, and we will continue to build to plan. At the same time, we will continue to work with our federal and provincial governments toward a sustainable solution.”
“We are working with our manufacturing, parts, trade and logistics providers across North America to understand the impact of the announced U.S. tariffs and we will adopt a measured, thoughtful approach to actively address both immediate and future effects,” said Honda Canada spokesperson Ken Chiu.
Ford didn’t immediately reply to a request for comment.
A 25 per cent tariff on cars and light trucks imported to the U.S. went into effect at 12:01 a.m. Thursday.
American officials have said there will be a partial exemption for cars made with parts from the U.S., although it’s still not entirely clear how that will work.
On Thursday, Mark Carney said Canada will retaliate in kind, with a 25 per cent tariff on American cars imported to Canada, but with a lower tariff for cars which include Canadian parts.
Because Carney vowed any auto tariff revenue collected will go to companies which continue to produce in Canada, Volpe says the Liberal leader has struck the right balance of retaliating adequately, while trying to minimize harm to the Canadian industry.
Payne and other auto industry officials have long predicted that Trump’s tariffs would lead to layoffs across the North American industry, given how highly integrated the sector’s supply chain is.
S&P Global automotive analyst Stephanie Brinley estimated in a recent report that the North American automotive sector could cut production by 20,000 vehicles per day within a week of tariffs coming into force.
