A Peterbilt truck at a dealership in Bolingbrook near Chicago, Ill., in 2014. Peterbilt Motors Company is owned by Paccar Inc.Jim Young/Reuters
American truck maker Paccar Inc. PCAR-Q is putting the brakes on production in Canada and laying off more workers ahead of a 25-per-cent U.S. import tariff scheduled to start next month.
The manufacturer, based in Bellevue, Wash., told employees at its truck factory in Sainte-Thérèse, Que., on Wednesday that it will repatriate production of trucks sold in the United States back to its U.S. plants, said Daniel Cloutier, Quebec director of Unifor, which represents the plant workers. He said about 300 jobs will be lost at Sainte-Thérèse, leaving about 500 workers remaining.
“They’re going to keep Canadian production in the plant,” Mr. Cloutier said, referring to trucks sold in Canada, but that represents a smaller percentage of overall output. The plant was building 96 trucks a day at one point but will now go to a daily rate of 18, he said.
Paccar representatives declined to confirm the news or provide further information on Wednesday. During a conference call on Tuesday to discuss financial earnings, Paccar chief executive Preston Feight characterized U.S. import tariffs as a positive development for the company and its customers.
“I think it helps Paccar significantly,” Mr. Feight said. “It gives us a competitive leg up from where we’ve been.”
Opinion: Canada needs to start thinking about an auto sector without U.S. automakers
Opinion: Canada’s costly EV scheme stalls out again
U.S. President Donald Trump said earlier this month that all medium- and heavy-duty trucks shipped into the United States will face a 25-per-cent tariff rate starting Nov. 1, further ramping up his protectionist effort to strengthen U.S. industry. The President later confirmed the order in writing and added a 10-per-cent duty on buses.
The President is applying the tariffs under Section 232 of the Trade Expansion Act, which penalizes imports deemed to threaten national security. Tariffs under the same section have hit Canada’s steel, aluminum, automobiles, copper and lumber sectors, with many companies selling into the United States freezing investments and scrambling to recast their strategies.
On Tuesday, General Motors Co. announced it will end production of the Chevrolet BrightDrop electric parcel van in Ingersoll, Ont., amid a slowdown in the EV sector, costing more than 1,100 hourly workers their jobs. Earlier this month, Stellantis said it is transferring production of the Jeep Compass to Belvidere, Ill., from Brampton, Ont., as part of a plan to boost production in the United States by 50 per cent by 2029.
“The reality facing workers right now is grim,” Bea Bruske, president of the Canadian Labour Congress, said in a statement on Wednesday. “The trade war continues, with no end in sight. Concessions we’ve made to appease Donald Trump haven’t worked.”
Stellantis shifts Jeep Compass production to Illinois from Brampton
Paccar builds the majority of its trucks at plants in Texas, Ohio and Washington State. It also has operations in Mexico.
Employees at the Sainte-Thérèse facility have already been through two rounds of layoffs in the past year as the economic uncertainty surrounding tariffs crimped demand. The plant, which makes Class 5, 6 and 7 model trucks sold under the Kenworth and Peterbilt brands, employs more than 1,400 people at peak capacity.
Mr. Cloutier said the union will hold talks with the Quebec and federal governments to try to quickly boost purchases of domestically made vehicles. He urged Quebec’s Coalition Avenir Québec government to issue a directive ordering provincial Crown corporations to prioritize locally made vehicles in their procurement.
Without such a policy, Paccar’s Quebec plant risks closing because its fixed costs are meant for much higher-production volumes, the Unifor leader said. “Let’s not pretend global trade hasn’t changed” with this President, he said. “We need to stop twiddling our thumbs.”
In addition to the truck factory, Quebec is home to two bus manufacturers that stand to be hit by the new import tariffs on buses. Prevost makes motorcoaches while Nova Bus makes transit buses. Both are wholly owned subsidiaries of Volvo Group.
Officials with the units say they’re still working through the implications of the new U.S. levies.