DETROIT -- Linda Hasenfratz, CEO of Linamar Corp., believes that suppliers from Canada, Mexico and the U.S. need to come together and make a case against import tariffs to the incoming Trump administration.
Hasenfratz, speaking Wednesday at the Automotive News World Congress here, made it clear that the so-called border tax that President-elect Donald Trump has threatened against automakers such as Ford, General Motors and even Toyota would be detrimental to business.
“The prospect of trying to put some trade barriers up between those countries is extremely troubling,” she said, noting that the average automotive part crosses a border seven times in North America before it ends up in a consumer’s driveway.
“Can you imagine adding a border tax seven times to these products that are passing back and forth between our borders?” asked Hasenfratz. “It would add enormous cost that no one can bear.”
Ultimately, Hasenfratz said, the consumer would pay for that cost.
She said adding cost and complexity in the auto industry has one result: decreased global competitiveness.
“We need to make sure the administration understands, fully, the consequences of proposed actions,” she said. “The [administration’s] goal is increased jobs and prosperity, and I think that’s attainable if we work together.”
While much of Trump’s focus has been on Mexico, Hasenfratz stressed the importance of the country, especially given the amount of investment and technology development there.
“To just slice Mexico out of the equation, I think, would be a mistake because collectively, we’ve created a fantastic, efficient infrastructure with good cost, great technology, and you know, a seamless integration across three countries,” she said.
Linamar has five plants in Mexico doing work ranging from machining and assembly to light-metal casting.
The Guelph, Ontario, supplier makes engine components including camshafts, connecting rods, cylinder heads and blocks as well as other parts such as fuel rails, transmission gears and clutch modules.
Hasenfratz acknowledged that if a case is to be made, it needs to be sooner rather than later.
“I think you need to get out in front,” she said. “I think it would be a mistake for us to wait for policy and decisions to be made and then try to get them reversed. Let’s try and get in ahead of the game and make sure the right policy decisions are made from the start.”
She’s also hopeful that the administration would listen.
“The facts are compelling,” she said. “The numbers are compelling in terms of the amount of trade, the number of jobs, technology that exists in the way that this ecosystem is put together. I think it’s a compelling argument and we need to put it together and make sure it’s being heard.”
Linamar ranks No. 56 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $3.9 billion in 2015.