A report in the Toronto Globe and Mail says that the Canadian auto sector is at risk due to actual and potential shipment delays over the USA-Canada frontier.
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The report cites research undertaken by the Center for Automotive Research (based in Ann Arbor, Michigan) for the Canadian government.
The Globe and Mail says that border delays were occurring before September 11, but disruption to vehicle and parts shipments across the border intensified in the two weeks following 9/11.
The study concludes that the system has been restored since then, but ‘remains fragile’ with manufacturers awaiting the rollout of future security policy.
The newspaper report points out that the volume of cross border automotive trade has grown sharply over the past decade, with Canada becoming an assembler and and exporter of vehicles, relying on a high volume of parts shipments from the United States. Canada now has a large autoparts deficit with the US.
The problem for the Canadian auto sector is that it is heavily reliant on an integrated North American supply matrix operating at low inventory and just-in-time. If that matrix is jeopardised by border disruption, any resultant supply-line rationalisation may favour operations in the US over Canada.
