Welding group warns steel tariffs hurting industry
- September 18, 2018
The CWB Association has voiced its concern about the impact of US steel tariffs on the Canadian welding industry.
Those tariffs, plus the retaliatory tariffs introduced by Canada, are negatively impacting Canadian welding companies, which employs thousands in manufacturing and construction jobs across Canada, the Association says.
Canada’s welding industry is severely affected by the impact the tariffs are having on the cost and availability of steel, increased prices on other materials and loss of work, “creating an uncertain climate for all those involved,” the Association said in a statement. It is also warning that these impacts have so far not been mitigated by government support measures introduced in June.
In August the CWB Association conducted a survey and in-person discussions with welding companies across Canada to get their input on the negative consequences of the tariffs. Fully 98 per cent of respondents said their businesses have been negatively impacted, the majority in a “major” way. There are substantial negative impacts on top and bottom lines and also on employees. One executive admitted to sleepless nights because of the uncertainty.
Michelle Stanford, senior vice president of operations at CWB Group, reports “Our clients, big and small, are struggling. The CWB Association is advocating for the engagement and support of the federal government to tangibly address the significant impact of tariffs by partnering with us, our clients and the industry in driving solutions to address the needs of the welding industry that we represent.”
The four key issues identified:
Revenue Loss – Work has slowed for most welding companies. Customers are delaying and cancelling work. Welding companies selling into the US feel forced to shift manufacturing there, while the momentum for “Buy America” has some US customers no longer using Canadian manufacturers.
Profit loss – Bottom line losses have increased the cost of production for existing and new contracts. “Steel pricing has increased approximately 30 per cent, and it is also becoming increasingly difficult to source special grade steel,” said one manufacturer. “All of which has caused my company significant financial hardship over the past number of months.” Another Association client said they were going to take a multi-million-dollar loss this year on an ongoing contract for a US customer solely due to the increased cost of the steel inputs.
Operational challenges – Material shortages are creating project scheduling issues and costly delays. Uncertainty around pricing makes bidding risky and complex.
Loss of jobs – Fewer contracts means fewer people needed. Layoffs and shutdowns resulting in loss of jobs and skills are now as high as 20 per cent in some regions. Given the CWB Association forecasted a shortage of 14000 welders by 2025, the sustainability of the industry is at risk if talented and experienced welders are unemployed.
The CWB Association is pressing for immediate consultation with the federal government to devise measures to mitigate the negative impacts the tariffs are having on the industry.
The full results of the CWB Association’s survey and discussions will be presented at the CanWeld conference next week in Winnipeg.