Linda Hasenfratz: You can’t unscramble the eggs on auto trade

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Every Canadian I meet has scoped the impact on potential tariffs that vary in scope and size with the wind. What should we do? Stay calm, confident, and focus on facts.

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The US government’s approach to negotiations is to disturb opponents. Don’t let this happen. We control our feelings, no one else.

Tariffs have been imposed, removed, imposed, deleted, and added to certain qualifiers. Don’t panic every time you issue a new announcement, and it may even change that day.

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Second, let us take a moment to restore our confidence in the great country.

Today, Canada is in an enviable position, a cliff with an era of special growth and prosperity. Why do you think the United States is interested in acquiring us?

We have a lot of critical minerals and fresh water, as well as a green grid of over 80% green, which means that the things we make here don’t have a heavy carbon footprint.

We have a great education system where our student scores are consistently tracked in international comparisons, always before the United States

We have freedom of speech and a society that values ​​women and diversity in all forms.

We are one of the few global centers and are considered the world leader in manufacturing and technology, especially AI, which powers our world’s leading advanced manufacturing companies that make the world impossible to live without.

We are very productive. what you say? Canada’s business productivity? Yes. The Canadian productivity statistics reported to you do not reflect the productivity of Canadian operations because they include workers who do not generate sales, such as government and nonprofit workers. They reflect our overall demographic. If we exclude these workers from the calculations and just look at the Canadian business, you can see strong growth in productivity, up more than 50% over the past 25 years. Over the past 15 years, the growth of Canadian manufacturing productivity has steadily increased in the U.S. productivity.

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We want to unleash Canada’s prosperity potential. The government must reduce the regulatory burden to accelerate sales time, reduce personal and corporate income taxes to make us more attractive to talent and investments, and reduce severe government bureaucracy. Our politicians seem to understand these requirements, given that both sides are currently running for certain versions of the strategy.

Finally, when we negotiate with the United States to come up with an award-winning solution, we need to focus on facts.

Let’s take the automotive industry as an example.

The largest automotive industry in the United States to date has the largest automotive industry on the mainland, where workers in the automotive industry employed 50% more than the next largest employer. This means that if production drops, it will hurt American workers more than any other country. More.

The United States produces 9.9 million cars each year, accounting for 66% of the total North America. The U.S. population is 67% of the entire North America.

Mexico produces 4 million cars each year, accounting for 26% of the total North American population. Mexico accounts for 25% of the population of North America.

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Canada produces 1.2 million cars each year, accounting for 8% of the total North America. Canada accounts for 8% of the population in North America.

It seems reasonable.

North America’s automotive industry is highly integrated. Parts usually cross the boundary in one form or another and then enter the lane as new vehicles. We are all very dependent on each other. Mexico-made vehicles have 40% of U.S. content. If you shut down imports from Mexico to the U.S., there are about $72 billion unmade parts and about 360,000 American workers are out of work.

You can’t eliminate eggs. The cost is huge, the timeline is long, and the return on investment is zero.

Transferring height engineering parts or subassemblies cannot happen quickly. This takes 12 to 18 months, and new vendors can make a lot of investment in tools and perform all the necessary testing and verification. Meanwhile, the automaker’s fee is 25%. The math doesn’t work properly.

Transferring production did not save nor did it bring in additional revenue. Where is the business return? Avoid tariffs that may be eliminated tomorrow? Still sorry, was that yesterday?

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Let’s take the vehicle components as an example. The U.S. government certainly seems to want to build all the vehicles in North America

Although Canadians and Mexicans have purchased vehicles as well and may just want to put in some production, let’s explore the idea.

The cost of a factory that manufactures 250,000 vehicles is $2.5 billion to $5 billion, and it takes two to three years to produce. Five million cars will be $75 billion. Three years from now on, vehicles in the United States for three years and 294 days From now on, the new government will take office in the United States without reducing costs, no additional revenue, no return.

Instead, let’s focus on how to build and sell more vehicles worldwide. North America bought 19.2 million cars, with a global market of 89 million, which means 80% of global car sales are outside North America – let’s aim for that.

If Mexico is the most labor-intensive part of the car, Canada makes the most energy-intensive part of the car (remember our 80% clean energy grid), the U.S. makes the rest, and we fairly separate vehicle production (perhaps the population). Dig into the world leading North American technology and push amazing innovation to these cars. Then we may only have the most innovative, lowest-cost and greenest cars in the world.

Finally, cooperation drives prosperity, not division. When did you strengthen the chain by breaking it?

Let’s work together in North America and win together, and then we all become more prosperous.

Meanwhile, Canada, let us stay calm, keep us confident and most importantly, let us focus on the facts.

Linda Hasenfratz is the Executive Director of the Linama Corp. Board of Directors.

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