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Closed Mexico Border Could Cost Carmakers $70 Million per Hour
President Donald Trump’s threat to completely close the Mexico border would idle much of the U.S. auto industry in days, according to the Center for Automotive Research in Ann Arbor, Mich.
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President Donald Trump’s threat to completely close the Mexico border would idle the much of the U.S. auto industry in days, according to the Center for Automotive Research in Ann Arbor, Mich.
Kristin Dziczek, CAR’s vice president for industry, labor and economic, notes that parts shortages would ripple across the industry and quickly disrupt production. Last year some $113 billion in vehicles and parts flowed from Mexico to the U.S., and $36 billion did the same in the opposite direction.
Dziczek estimates that each idled auto assembly line in the U.S. would cost its owner about $1.3 million per hour. A shutdown of all 54 major auto plants in the U.S., a highly unlikely scenario, could cost carmakers $70 million per hour, or $5.6 billion per week.
Dziczek’s estimate doesn’t include the impact on U.S.-based suppliers or the country’s auto dealer network.
She predicts that wiring harnesses would quickly become a major choke point for vehicle production. That’s because almost 80% of such parts used in the U.S. normally cross the Mexico-U.S. border from production facilities in Mexico or Central and South America.
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