Moving Canadian Car Production Stateside Is Much Easier Said Than Done

Plus, Trump's tariffs against the EU and China would make a mess for the auto industry, and Ford Blue Cruise is under investigation for fatal crashes.

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Good morning! It’s Wednesday, January 22, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

1st Gear: Bringing Canadian Auto Output To The U.S. Is No Simple Task

It would seem President Donald Trump has a child’s understanding of how car production and supply chains outside of the U.S. work. His idea to simply replace vehicles made in Canada with vehicles made in the U.S. is going to prove to be a nightmarishly complicated and costly undertaking, according to a new report. Adding insult to injury, his solution to get this done, a 25 percent tariff on vehicles made in Canada, would hurt U.S. consumers as those costs would get passed down to them.

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The report says Canada annually exports about 1.5 million vehicles to the U.S. That works out to about eight or nine percent on all new U.S. car sales every year. From Automotive News:

“The U.S. could conceivably look to shift this production state-side,” TD Economics says in a study called Setting the Record Straight on Canada-U.S. Trade.

But it warns there are “significant near-to-medium term challenges to replacing Canada’s annual exports.”

“To fill that gap, the U.S. would need to raise production by more than 10 per cent relative to current levels,” the report said. “Based on the average production capacity of 225,000 units for existing assembly plants, that would mean roughly six new plants would be required.”

Five automakers build vehicles in Ontario. Among the vehicles assembled in that province, three are their respective brand’s top-selling vehicle in the U.S., according to the Automotive News Research & Data Center in Detroit.

The Toyota RAV4, imported from Woodstock, is the brand’s best seller south of the border. The same can be said for the Honda CR-V, from Alliston, and the Lexus RX, from Cambridge. Meanwhile, the Honda Civic, also from Alliston, is the best-selling compact car in America while the Chrysler Pacifica, built in Windsor, is the top-selling minivan there.

“Canadian production of the RAV4, Civic, and CR-V help prop up sales of those models in the U.S. Finding U.S. production space would not come quickly or easily,” Sam Fiorani, vice-president of global vehicle forecasting at AutoForecast Solutions, based in Pennsylvania, previously told Automotive News Canada.

Honda, for example, likely doesn’t have enough additional capacity at its U.S.-based Civic and CR-V plant in Greensburg, Ind. According to the Automotive News Research and Data Center, Honda built 193,626 Civics in Ontario through the first 11 months of 2024. It assembled 66,470 in Indiana during the same time frame. Meanwhile, the automaker built 200,044 CR-Vs in Ontario and 162,330 in Greensburg through November.

All told, Honda made 228,800 vehicles at the Indiana factory through November. It has the capability to build 250,000 vehicles annually. That means Honda couldn’t simply move production south to the companion plant.

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The numbers to bring this manufacturing stateside are mindbogglingly big, big to the point where they make Trump’s entire plan seem stupid.

Looking beyond North America, TD Economics estimates it would require a 75- per-cent boost in U.S. auto assembly and cost automakers more than $50 billion in new investment if they moved all current non-U.S. production to America.

“This doesn’t factor in onshoring/expanding parts production in the assembly of those vehicles,” the report warns. “Failing that, the U.S. would increase its reliance on parts imports.

“This would come at a hefty price tag for U.S. domestic producers.”

[...]

“By some estimates, average U.S. retail car prices could rise by roughly $3,000, though that would depend on retaliation actions by both trading partners [Canada and Mexico],” the report said. “ In the event of strong counteractions, severe trade dislocations and significant economic consequences would occur, leading to collapsing demand in all three countries.”

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God damn, I’m so pissed at all of you. Everything is so fucked up now. I hope your eggs are cheaper, at least. That’s all that really matters anyway.

2nd Gear: Trump Doubles Down On EU, China Tariffs

President Donald Trump reiterated his plans to hit the European Union with tariffs, and he’s discussing a 10 percent punitive duty on all Chinese imports. He says it’s because of fentanyl being sent from China to the U.S. via Mexico and Canada. You’re all smart enough to know that’s bullshit, right?

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Anyway, he voiced these threats to reporters at the White House just a day after taking office. On the campaign trail, he promised to impose tariffs on countries around the world immediately, but that hasn’t happened quite yet. From Reuters:

Trump said the EU and other countries [...] had troubling trade surpluses with the United States.

“The European Union is very, very bad to us,” he said, repeating comments made Monday. “So they’re going to be in for tariffs. It’s the only way ... you’re going to get fairness.”

Trump said on Monday that he was considering imposing the duties on Canada and Mexico unless they clamped down on the trafficking of illegal migrants and fentanyl, including precursor chemicals from China, across their U.S. borders.

Trump had previously threatened a 10% duty on Chinese imports because of the trade, but realigned that with the Feb. 1 deadline.

China said it was willing to maintain communication with the U.S. to “properly handle differences and expand mutually beneficial cooperation”. It sought to promote stable and sustainable ties with the U.S., the foreign ministry said.

“We always believe that there is no winner in a trade war or tariff war. China will always firmly safeguard its national interests,” ministry spokesperson Mao Ning told reporters at a regular press briefing on Wednesday.

White House trade adviser Peter Navarro told CNBC early on Tuesday that Trump’s Canada and Mexico tariff threat was to pressure the two countries to stop illegal migrants and illicit drugs from entering the U.S.

“The reason why he’s considering 25, 25 and 10 (percent), or whatever it’s going to be, on Canada, Mexico and China, is because 300 Americans die every day” from fentanyl overdoses, Navarro said.

Trump on Monday announced a sweeping immigration crackdown, including a broad ban on asylum.

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On day one of his new administration, Trump signed a broad trade memorandum that ordered federal agencies to complete comprehensive reviews of a range of trade issues by April 1.

These include analyses of persistent U.S. trade deficits, unfair trade practices and currency manipulation among partner countries, including China. Trump’s memo asked for recommendations on remedies, including a “global supplemental tariff,” and changes to the $800 de minimis duty-free exemption for low-value shipments often blamed for illicit imports of fentanyl precursor chemicals.

The reviews ordered create some breathing room to resolve reported disagreements among Trump’s cabinet nominees over how to approach his promises of universal tariffs and duties on Chinese goods of up to 60%.

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We’re all so boned, man. I mean, everything we buy is about to get even more expensive.

3rd Gear: Two Fatal Crashes Prompt Investigation Into Ford BlueCruise

The National Highway Traffic Safety Administration is boosting its investigation into Ford’s BlueCruse hands-free driving tech after reports of two fatal Mustang Mach-E crashes while the technology was engaged. Regulators say they are moving the status of the probe to “engineering analysis,” which is a necessary step before NHTSA can issue a recall.

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The analysis covers 2021-2024 model year Mach-Es. That comes out to about 129,200 of the electric crossover. From the Detroit Free Press:

In its analysis, NHTSA will investigate Ford’s system limitations and “evaluate drivers’ ability to respond to scenarios that exceed system limitations,” NHTSA said in documents. During the analysis, regulators will evaluate vehicles equipped with BlueCruise, review additional technical information, and perform additional analysis of related crashes and noncrash reports, it said.

[...]

The BlueCruise system uses a camera-based driver monitoring system to determine driver attentiveness. It is available on 97% of U.S. and Canadian highways on stretches with no intersections or traffic signals. Ford introduced the technology in model year 2021 and made it available in certain Ford and Lincoln vehicles.

NHTSA said it opened its investigation into BlueCruise in April 2024 after it received notice of two fatal accidents that involved BlueCruise-equipped Mach-Es. Based on those crashes, NHTSA started investigating the 2021-24 model year Mach-E vehicles equipped with BlueCruise.

According to a Reuters report last year, in February, a Ford Mustang Mach-E driver in San Antonio was using BlueCruise when the Mach-E rear-ended a stationary Honda CR-V on a highway, killing the 56-year-old Honda driver. BlueCruise also may have been in use in a second fatal crash, between a Mach-E and two stationary cars in Philadelphia in March, Reuters reported. In that incident, the Mach-E hit two stationary vehicles on the highway, killing two people.

In June 2024, regulators asked Ford to provide information pertaining to both crashes, noncrash reports and technical specifications that relate to BlueCruise, as well as other Ford partial driving automation systems that offer lane and speed maintenance, NHTSA said in a statement.

[...]

In both fatal collisions, the Mach-E vehicle was traveling over 70 mph on a highway at night in BlueCruise mode and crashed into a stationary vehicle, NHTSA said. Data from the vehicles’ event data recorders showed the drivers did not apply brakes or take evasive steering action, and no deceleration was initiated by either the BlueCruise system or Pre-Collision Assist before impact.

Through the agency’s crash analysis, it found four additional frontal crashes where a Ford vehicle hit a stopped or slow-moving car or another stationary object. Two of these involved BlueCruise-equipped Ford Mustang Mach-Es.

Based on NHTSA’s analysis, it said system limitations relating to the detection of stationary vehicles while traveling at highway speeds and in nighttime lighting appear to be factors in collisions under investigation and some “near-miss, non-crash reports,” it wrote. The agency said it will further investigate these limitations and drivers’ ability to react to such scenarios.

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A spokesperson for Ford told Freep that the automaker was “working with NHTSA to support its investigation.”

What a mess. Every time stories like these come up, all I can do is think about how driving down a highway isn’t actually that difficult, and the money spent developing these programs would be better used on driver education and training.

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4th Gear: Car Hauler Plant Closes Facility After Ford Cancels Trucker Contract

Jack Cooper, a car hauling company, is set to close up shop at its Wayne, Michigan facility just a few weeks after Ford canceled its long-standing contract with the firm. Ford has yet to offer a specific reason for the decision. From the Detroit Free Press:

In a Worker Adjustment and Retraining Notification Act notice filed with the state, Jack Cooper’s head of human resources said the company is permanently terminating its operations in Wayne and 89 employees associated with the facility there are expected to be let go on Feb. 2. Of those, 75 are union jobs.

Jack Cooper also has a facility in Dearborn with eight employees, five of whom are union-represented. There is no WARN filing on that facility yet, but earlier this month the company told the Detroit Free Press it is likely to see job loss as well. No one from the company immediately responded to a request for comment on the closure of the Wayne facility.

As the Detroit Free Press reported on Jan. 8, Ford ended its decadeslong contract with Jack Cooper, a move that angered the Teamsters union — which indicated it will fight for the 1,400 union jobs at the hauling company. Given that Ford was Jack Cooper’s second-largest client behind General Motors, losing the contract created what its CEO told the Detroit Free Press is an “existential crisis” for the company, endangering its future.

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This doesn’t mean Jack Cooper is completely shuttering. A spokesperson for GM told Freep that the automaker would still be using the company to haul its vehicles. Still, a big chunk of its workforce is being hit by this decision.

Outside of Michigan, the affected facilities include: Avon Lake, Ohio; Liberty, Missouri; Cottage Grove, Minnesota, and Louisville, Kentucky. A WARN notice filed in Missouri earlier this month shows the company is permanently closing its facility in Liberty, affecting 406 jobs, according to KMBC news in Missouri. In Ohio, local publications reported the company is closing a facility near Avon Lake, affecting 53 jobs.

The contract with Ford was not set to expire on Feb. 2, but it did have a clause that would allow Ford to end it sooner. The automaker offered no explanation for its decision, people at Jack Cooper told the Free Press.

“I am disappointed to see the end of a 40-year partnership and I’m disappointed for the employees it will impact and the jobs that will be lost,” Jack Cooper CEO Sarah Amico said at the time.

Ford spokeswoman Ursula Muller declined to confirm or deny the change in Ford’s relationship with Jack Cooper, telling the Free Press in a statement earlier this month, “We do not comment on our contracts or relationships with individual suppliers. We manage supplier relationships in line with our sourcing strategy, designed to enable us to best serve our customers.”

But according to a person familiar with Ford’s decision, the move to terminate the contract is not related to union representation or the hauler’s performance. Rather, Jack Cooper’s history of financial distress and instability — it filed for federal bankruptcy protection in 2019 — has been among Ford’s concerns, this person said. The person asked to not be named because they are not authorized to speak publicly on the matter.

Jack Cooper is working to arrange new financing. Leaders fear the Ford move could disrupt that process.

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A spokesperson for the Teamsters union has previously called Ford’s decision “shameful” and “un-American.”

Reverse: We Are Regressing As A Country

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