Bridge opponents want us to believe the auto industry is dead

Opponents of the New International Trade Crossing (NITC) would lead you to believe that the manufacturing and auto industries in the U.S. and Canada are in such decline that there is no need for another bridge between the U.S. and Canada. These claims could not be further from the truth. It turns out that the auto industry could be the savior of the U.S.-Canada trading relationship and vice versa; a bridge would facilitate lower overhead for auto manufacturers while generating the power to drive Michigan, U.S., and Canadian economic growth.

The bottom line: the auto industry is anything but dead, a bridge would help the auto industry reduce manufacturing and shipping costs, and our trade relationship with Canada in other sectors would improve. U.S. auto manufacturers General Motors, Ford Motor Company, and Chrysler experienced sales increases during the month of August at an average of 12.3 percent. Furthermore, the Public Borders Operators Association (PBOA) traffic figures of cross-border travel over the U.S.-Canada border reveals a traffic increase of approximately 4% from 2011 to 2012 (with a few months still remaining in 2012). Truck traffic is projected to increase 128% over the next 30 years as local and global economies recover. All of these factors indicate that constructing the NITC would be a pragmatic move in order to handle future volume increases and to ensure the availability of necessary transportation capacity.

In addition to sustaining the high level of economic integration between the U.S. and Canada (over 8,000 trucks and $1.7 billion in goods cross the border daily), constructing the NITC would substantially help the operations of the Big Three U.S. auto manufacturers. Studies show that the auto industry does not have the capacity to meet projected market demands without employing Canadian production facilities – a 2012 Center for Automotive Research report indicates that GM will run out of capacity for pickup truck production by 2015. Coupled with the projected increases in auto traffic both to and from Canada, if the bridge is not built, manufacturers would have to cut production, battle transportation delays, and navigate other externalities of the increased competition for limited amounts of highway. Moreover, this is discounting the fact that they would still need to factor in complications related to negotiating customs, a serious consideration in the post-9/11 era.

Logistical delays are the scourge of many industries’ production and feasibility; according to General Motors and Chrysler, increased transportation delays and traffic congestion also add unnecessary production costs and gridlock manufacturing. Economic modeling of border delays by the University of Waterloo, Ontario, revealed that a hypothetical across-the-board 1% delay in the delivery of goods and services resulted in a corresponding 1% decrease in the Canadian Gross Domestic Product. Contemplating the application of this model to the delivery of U.S. goods and services is a somewhat frightening idea. However, complementing the Ambassador Bridge with the NITC would greatly bolster the lateral support between the U.S. and Canada, and adapt the corresponding transportation infrastructure to the contemporary market.

Bridge opponents are quick to point to recently decreasing traffic numbers as a justification for opposing the bridge. The U.S.-Canada traffic numbers have slumped over the past few years as a result of the recession and post-9/11 security measures. This argument is myopic when analyzed in light of the growth projections previously presented. It should also be noted that according to Canadian publication The Globe and Mail: “economists expect auto exports to fare better in future months…” and “…auto exports are up more than 21 percent since July of last year.” Furthermore, trade between the two countries has increased in spite of the economy, to the tune of 5.52% during the period from January to July 2012 when contrasted with the same 2011 time period.

If every truck could cut their travel time by just fifteen minutes with a freeway to freeway connection, that would save more than 450,000 hours of lost efficiency, saving businesses millions every year. The NITC would allow auto manufacturers, and all other manufacturers and producers, to cut overhead in their supply chain management operations and speed their goods to market more efficiently. Constructing the NITC as a complement to the Ambassador Bridge would be a data-driven and decisive step toward securing Michigan’s economic revitalization, and improving trading relations with our single biggest trading partner.