ADF lays off workers temporarily after unsuccessful U.S. bids
March 27, 2018 by The Canadian Press
Mar. 27, 2018 – ADF Group Inc. said Tuesday it has temporarily laid off 50 employees after losing out on major project bids in the United States during the height of tariff tensions.
The move shows that uncertainty on trade policies with the U.S. is having an effect on Canada’s manufacturing industry, said Dennis Darby, CEO of Canadian Manufacturers and Exporters.
“It can’t be overstated that uncertainty with the U.S. about our trading relationship with our biggest trading partner is causing companies to rethink investment. The ADF Group is one of those decisions that companies are making every day.”
Most companies won’t be making public if they’ve lost out on contracts or seen other impacts from the U.S. trade uncertainty, but many are holding back or being more hesitant on spending decisions until there’s more certainty, said Darby.
“Do I expand my production in Canada, do I invest my next dollar of capital in the U.S., do I wait and see where it all ends? We’ve been hearing that from our members across the country.”
There’s been a Cloud of uncertainty for manufacturers and exports throughout the renegotiations of NAFTA, which was then heightened when U.S. President Donald Trump said in early March that he would impose tariffs on all steel and aluminum imports.
Trump has since walked back those positions, first allowing temporary exemptions for Canada and Mexico, followed by exemptions for the European Union, South Korea, Argentina, Australia and Brazil.
ADF Group, however, said it lost its bids on major U.S. projects before the U.S. government announced that Canada would be exempted from the tariffs.
Even with the temporary tariff exemption in place, there will continue to be business disruptions while NAFTA is being resolved, said Peter Warrian, a senior research fellow at the University of Toronto’s Munk School of Global Affairs.
“Even though we’ve got this temporary exemption, until the NAFTA deal is finalized you’ve got an uncertain environment, so how do you make order decisions? How do you make investment decisions?”
He said he wasn’t surprised to hear the ADF Group news given the uncertainty, and that China’s potential responses to tariffs and steel restrictions will mean more uncertainty going forward.
ADF Group, however, said it’s working on several more bids, including for large-scale projects in the U.S. The company said it will be able to recall employees targeted by the temporary layoff as new contracts are signed.
The company manufactures a range of steel products from I-beams to large complex structures. It has two fabrication plants and two paint shops, in Canada and in the United States, along with a construction division in the U.S.