September 16, 2003
Closure of Windsor-Detroit Ambassador Bridge could cost billions says report
Detroit, Michigan – A new research study titled “Economic Effects of Interruption of Capacity on the Ambassador Bridge,” reports that short-term closures of the Ambassador Bridge would cause significant economic impact on the region. The new study estimates that a mere four-hour shutdown would cost the regional economy over $US15.4 million ($CA21.3 million). Extending the potential closure/disruption to two days ups the net loss to over $US130 million ($CA180.8 million). And, if the disruption should last just two weeks, the cost to the southeast Michigan and Ontario, Canada economies would reach over $US1.6 billion ($CA2.3 billion).
This illustration depicts the Detroit River Tunnel Partnership Jobs Tunnel. The Jobs Tunnel project doubles truck-handling capacity at the Detroit-Windsor gateway and can be up and running in just five years. Click image to enlarge
The study was released by Michael H. Belzer, Ph.D., Wayne State University and the University of Michigan in association with Global Insight, a leader in economic and financial information gathering and analysis. The new study provides an economic impact estimation analysis involving the Ambassador Bridge closings for four hours, two days, one week and two weeks.
The new research reports that in 2001, the total value of trade between the United States and Canada reached $US346.6 billion ($CA485.2 billion) and that the Ambassador Bridge carried approximately 25% of that value or $US86.7 million ($CA121.3 million). In addition, Global Insight forecasts that the total value of trade between the two countries will increase approximately two and one half times to $US866.5 billion ($CA1,213.1 billion) by the year 2021 in current dollars.
“As the recent blackout on August 14, 2003 demonstrated, the Ambassador Bridge is vulnerable to unplanned disruptions and can cause untold economic problems at the Detroit/Windsor gateway which is the world’s busiest border. Other things that might occur to shut down the bridge include fatal accidents on or near the bridge, water main breaks, structural failures, mechanical breakdown of cars or trucks on the bridge, and labour problems to name a few. Of course, security risks must also be taken into account,” said Dr. Belzer.
The auto industry located in southeast Michigan and Ontario, Canada would be hardest hit because it relies on Just-In-Time deliveries for efficient operation of its plants. The new study estimates that a two-week shutdown of the Ambassador Bridge would result in a net loss to the auto industry of over $US689.6 million ($CA965.4 million). One of the major conclusions of the report states, “The loss of a reliable truck border crossing between Windsor and Detroit would likely result in the eventual loss of automotive jobs in Windsor and in the corridor stretching between Windsor towards London.”
The study outlines other industries that would be affected in the region, too. For example, in a two-week shutdown of the Ambassador Bridge, the regional agricultural business would lose over $US155.1 million ($CA217.1 million), the regional building products industry would lose close to $US135.8 million ($CA190.1 million) and the metalworking industries in the affected area would have a net loss of nearly $US263.5 million ($CA368.9 million).
The Detroit River Tunnel Partnership Jobs Tunnel project commissioned the research report. Dr. Belzer is professor of industrial relations at Wayne State University College of Urban, Labor and Metropolitan Affairs and an adjunct research scientist at the University of Michigan Institute of Labor and Industrial Relations. The Detroit River Tunnel Partnership is a partnership between Canadian Pacific Railway and Borealis Transportation Infrastructure Trust, a subsidiary of the Ontario Municipal Employees Retirement System (OMERS).
For more information on the Jobs Tunnel project, please visit www.thejobstunnel.com.