DETROIT — Linamar Corp. CEO Linda Hasenfratz said political uncertainty is "creating a lot of noise" in an otherwise healthy auto industry, and urged executives to speak more forcefully against steel and aluminum tariffs.
Linamar CEO urges industry execs to fight tariffs
Hasenfratz, speaking last week at the Automotive News World Congress here, said the industry should lobby North American lawmakers to push for an end to the tariffs. If they're not lifted by midyear, the industry could lose between 2 million and 2.5 million annual sales in North America, she warned, citing industry analysts.
"All of us have a voice, and we should be using that voice to talk to our governments to get that solved," Hasenfratz said. "This is something that we can control. There [are] a lot of recessions and downturns we can't control."
The U.S. in July implemented a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports, which were soon followed by retaliatory tariffs from Canada. Canada has since issued exemptions to some steel and aluminum imports to give relief to Canadian companies that have been hurt.
Hasenfratz said even though 23 of Ontario-based Linamar's 60 factories are in Canada, the impact of the tariffs on the company's bottom line has been minimal. But the tariffs risk increasing new-vehicle prices over the long term, leading to decreased demand and business for suppliers such as Linamar.
"I'm more worried about the impact to the automakers' bottom lines. Both GM and Ford talked about $1 billion of impact," she said. "They can only absorb those costs for so long before prices start to go up and demand goes down."
Despite tariff concerns, Hasenfratz said the industry has major opportunities for growth, citing strong economies and the emergence of new technologies.
"I feel like this is the most opportunistic time I've ever seen in the automotive industry," she said. "I think if we stay flexible, we focus on the big picture and focus on facts and look past the noise of all this trade/tariffs stuff that's going on and keep innovating and focus long term, we can certainly be successful."
She said she also sees Canada remaining a viable market for auto manufacturing, citing the country's skilled work force. Still, she urged the country's leaders to lower corporate taxes to become more competitive with the U.S. in the wake of the corporate tax cuts enacted in late 2017.
Hasenfratz said, "I do believe that manufacturing in Canada is very competitive."
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