Brace for These 5 Ripple Effects If Protests Continue
It’s been approximately 3 weeks since Canada mandated vaccines for truckers crossing the border, and there doesn’t seem to be an end in sight to the backlash.* In fact, many theorize that the blockades and protests will grow.
If continued, these protests can cascade into problems that will hit close to home for many Americans:
- Manufacturing Job Cuts/Reduced Capacities
The focal point of the protests, Ambassador Bridge, is responsible for roughly 1/3rd of America’s auto industry supplies. Car plants, including some of Toyota’s and GM’s, have already been cutting back on shifts since the protests began, sometimes days at a time. If the standoff continues, expect more canceled shifts, reduced capacities, and layoffs in worst case scenarios.
- Delayed Order Deliveries
Like any pre-pandemic supply chain, the continual back-and-forth processes of shipping raw materials, manufacturing components, and implanting into cars was relatively seamless when it came to crossing North American borders. If protests continue, this process stalls, extends production times, and pushes back order delivery dates.
- Small Business Vulnerabilities Exposed
With disrupted supply chains, auto manufacturing, delivery, and profitability are all adversely affected. Unlike giant automakers and freight companies, independent truckers who get paid by the workload and smaller auto suppliers have less room to raise prices without losing customers to those who can afford to do so. Not being able to raise prices would shutter businesses that operate on a thin profit margin to begin with.
- Local Economic Damage
It’s a known fact that many small towns in the Midwest rely on the big automaker plants, to the point where their whole economy is heavily dependent on those jobs. As supply chains get stuck and production slows, even the biggest plants can be affected. Once bottom lines get hit, the domino effect caused by layoffs can pretty much leave whole towns in ruin, as the money that would’ve been otherwise circulated is now being saved or nonexistent.
- High Driver Turnover
Though the driver shortage has been going on before the protests, these recent events may actually deepen it. Since many drivers might refuse to work on the basis of their vaccination status or even be penalized for protesting, the door is now opened to a new crop of potential employees who are willing to be vaccinated. Fleets may have to adjust accordingly to the influx of new hires, and might have to make some concessions when it comes to hirees’ driving records.
*at the time of publishing, protesters have been ordered to disperse, but whether supply chains will continue to be affected is yet to be determined
