New bridge to help carmakers

Traffic hurting auto industry

By Theophilos Argitis And Andrew Mayeda, Bloomberg News

Chrysler Group LLC says traffic delays at the Canada-U.S. border are driving up costs for the world’s seventh-largest carmaker, which sends 2,000 finished cars and trucks a day across an 83-year-old bridge linking Detroit to Windsor.

Prime Minister Stephen Harper wants to change that, announcing an investment of at least $550 million to build a bridge to speed shipments across the busiest commercial border crossing in the world’s biggest trade relationship.

“The name of the game with respect to our manufacturing operations is just-in-time inventory, not just-in-case inventory delivery,” said Reid Bigland, chief executive officer of the Canadian unit of Chrysler, majority owned by Fiat SpA, in a telephone interview.

The span would supplement the Ambassador Bridge, which has connected the two cities since 1929.

More than $130 billion in shipments and 8,000 trucks cross the Detroit-Windsor border each day, according to Canadian government data.

The crossing carries 25 per cent of truck commerce between the countries, and more than seven million vehicles a year, according to the Public Border Operators Association.

Delays in sending shipments across the existing bridge have added “unnecessary costs” for automakers, Bigland said.

Sales to the U.S. by Linamar Corp., a parts maker based in Guelph, increased 29 per cent last year to $188 million.

While U.S. revenue has increased, some automakers have cited bottlenecks at the crossing as a drawback to sourcing supplies in Ontario, said Mark Stoddart, chief technology officer and executive vice-president of marketing at Linamar.

Harper called the bridge the “most important piece of international infrastructure that this government will complete while I’m prime minister.”

“We are prepared to do everything in our power to make it happen on the Michigan side,” he told reporters at a news conference June 15 in Windsor.

U.S. President Barack Obama and Harper in December agreed to take steps to speed the flow of goods and people across the border in a bid to counter weakening trade ties.

Border regulations cost Canadian businesses about $16 billion annually, the Canadian government estimates.

The complete project, including customs plazas on either side of the border, is estimated to cost $3.5 billion to $4 billion, Transport Canada spokesman Patrick Charette said.

Canada has committed as much as $550 million to pay for infrastructure on the Michigan side, and costs for other parts of the project are “still being refined,” Charette said. Michigan isn’t providing any funding.

Tolls collected on the Canadian side will be paid to the private company that will design, build and operate the bridge. Part of the tolls will help the Canadian government recoup its investment, Charette said.

Construction will provide about 12,000 jobs annually for four years, the Center for Automotive Research said.

BOWER’S BRIDGE

The four-lane Ambassador Bridge was completed in 1929 by banker Joseph Bower. At 7,490 feet (2,283 metres), it was the world’s longest suspension bridge at the time, according to the bridge’s website.