The Windsor Star
Chris Vander Doelen
There’s a popular misconception that Ambassador Bridge owner Matty Moroun is blocking construction of a competing public bridge just to protect the tolls he collects.
There’s a lot more to border profits than tolls.
The Morouns – Mr. and Mrs., plus son Matthew – do rake in tens of millions of dollars every year by charging some of the world’s highest tolls for crossing their private bridge over the Detroit River.
But the toll millions could be peanuts compared to the real money being made. The family’s “border play,” as a speculator might call it, is really all about controlling the truck traffic that feeds the auto industry.
That truck traffic doesn’t have anywhere else to go. And the Morouns own an estimated 150 trucking companies of their own. It’s as if the family owns the only hotel, the only saloon and is mayor of a small town in an old western movie. (I’m thinking of the Brian Dennehy part in Silverado, 1985.)
By some rough calculations made by Michigan state bureaucrats, tolls might only be the fourth largest source of income the Morouns earn from their near monopoly of Windsor-Detroit industrial trade.
In addition to the tolls, they make a very pretty penny on the sale of liquor, cigarettes and luxury goods from two duty free shops (they also control the Ammex on the U.S. side of the Windsor-Detroit tunnel.)
Those sales would presumably take a hit if a majority of traffic opts to take a new bridge linked directly to Highway 401 and Interstate 75, as the new Detroit River crossing would.
On top of the booze, smokes and overpriced eau de toilette, the bridge also sells duty free gasoline and diesel. How much, few outside the Moroun family probably know.
Some officials for the State of Michigan say privately they believe profits from fuel sales could be much higher than the $80 million annual figure usually cited as the bridge’s annual take on tolls and duty free goods combined.
With an estimated profit of 60 cents per U.S. gallon on every sale (as calculated by the Detroit Free Press in 2011), the Ambassador Bridge would earn a profit of $1.2 million per day on fuel if every one of the 10,000 transport trucks that cross 300 days per year fill their 200-gallon fuel saddlebags. If even every third truck filled up, the duty free diesel profits alone would still reach $120 million per year, not counting gasoline.
Michigan believes it could be losing that much and more to the Morouns from its road building budget every year. Every time a trucker or commuter crossing the bridge fills up there, that’s 60 cents per U.S. gallon diverted from state coffers. The taxes go straight into their road fund.
Even bigger money, some believe, flows through the Morouns’ trucking empire. Controlling the only link between the factories of North America’s largest industry means they also control the lifeblood of that industry: parts.
As everybody connected to the auto industry knows, the heavily integrated business straddles the international border in ways that require a massive and complex web of logistics. An army of just-in-time truckers and shippers link all the stamping plants, parts makers, engine plants, seat plants, and final assembly halls.
Some components are said to cross the border up to seven times before a consumer finally drives her new car home. And 60 to 70 per cent of the traffic must traverse Moroun’s Ambassador Bridge.
The bottom line: if you are Ford, Chrysler, General Motors, Toyota or Honda – each of which has multiple plants both in Ontario and in the U.S. Midwest – your logistics people must go cap in hand to Moroun’s trucking companies in order to keep their plants humming.
Sure they could use other companies – but the trucks of other companies wait in line behind Moroun’s. Which ones do you think cross first when the lineups are long?
This is the real crime of those shamefully dishonest television ads the Morouns have flooded the airwaves with: blocking the new bridge is not only anti-democratic, it’s anti-competitive, anti-industry and anti-job.
Keeping the tolls isn’t as important as maintaining control of the multibillion-dollar flow of auto parts. If another, larger, better-connected bridge is built that can’t be forced to do business with his trucking companies, the real value in Moroun’s monopoly evaporates overnight.
Let’s hope Michigan voters are smart enough to smell the naked self-interest evident in those TV ads. Passing Proposal 6 would cement permanent control of the border in the hands of the Morouns.
After that, few investors will ever again want to plunk a new manufacturing plant in a region where the international movement of nearly all goods is controlled by one greedy, mean-spirited family.
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