Canadian "Freedom Convoy" blockades cost auto industry nearly $300 million, report finds
Trade between Michigan and Canada is flowing again after people protesting Canadian COVID-19 mandates blocked international truck traffic for nearly a week.
But one analysis estimates the disruptions set the auto industry back by more than a quarter of a billion dollars.
Blockades and delays at bridges connecting Detroit and Port Huron to Canada cost automakers $155 million in lost production on top of nearly $145 million in hits to workers who lost wages, according to calculations from the East Lansing-based Anderson Economic Group.
The firm's CEO Patrick Anderson said the disruptions came at an already volatile time for the international auto industry.
Near Lansing, for instance, the blockades exacerbated a supply chain crunch, prompting General Motors to cancel first and second shifts last Thursday at its Delta Township assembly plant.
"Practically every car that arrives at a dealership is already purchased by a customer," Anderson said. "So it was exactly the time where supply was so tight, that any interruption in the part shipments was going to have an immediate and costly impact.”
Anderson called the firm's methodology conservative, noting that the analysis focused on direct impacts to automakers, their suppliers and transport workers. It did not estimate ripple effects to sectors other than the auto industry or calculate the cost to governments for police response.
"The estimate that we have of $300 million through today is is an underestimate of the total cost in the U.S. and Canada," Anderson said Tuesday.
Anderson Economic Group does consulting for the auto industry, but the firm said its analysis wasn’t commissioned by any parties to the work stoppage.
Last month, Canada's Prime Minister Justin Trudeau called demonstrators a "small fringe minority" as they headed to Ottawa to protest rules requiring Canadian truckers who reenter the country to be vaccinated against COVID-19 or face a 14-day quarantine.
The protestors calling themselves the Freedom Convoy later spread to other locations, including the Ambassador Bridge where they used trucks to block traffic from Detroit into Windsor, Canada.
The protestors may have caused lasting damage to America's trade relationship with its northern neighbor and cannot easily be dismissed, Anderson said.
"You don't have a small fringe group shut down trade like this," Anderson said. "This was a large number of people that had serious grievances. Whether you agree with their grievances or not, it's definitely a full-blown political crisis in Canada."
He added, "Over the next few years, I think automakers are going to be a lot more sensitive to shipping parts and vehicles across the U.S.-Canadian border."
Police eventually cleared protestors from the Ambassador Bridge after issuing warnings followed by arrests and citations. As of Tuesday, there were no delays for drivers crossing into Canada from either Detroit or Port Huron, according to updates from the Canadian government.