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How the COVID-19 microchip shortage has brought Canada's car industry to a halt — again – CBC.ca

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Even before the pandemic, 2020 was always going to be an uncertain year for Canada’s automotive industry.

The Big 3 automakers — General Motors, Ford and Chrysler (now known as Stellantis) — were set to negotiate multi-year work agreements with their main unions, after the previous agreements with their workers had expired.

Then COVID-19 hit, and everything changed. Buyers weren’t coming to showrooms for fear of getting sick, so sales slowed to a crawl. Factories shut down to keep workers safe.

By the time consumers felt safe enough to take their first tentative steps back into dealerships this year, they were confronted by a new problem: There were no cars to buy.

That’s because when things slowed down in 2020, car companies slashed their orders from their suppliers for the components that go into them. When demand came roaring back, those same suppliers could not ramp up fast enough, especially the makers of the cheap little semiconductor microchips that are in just about everything these days.

“Automakers in Canada initially thought that demand would be very slow recovery over the course of the pandemic, so they cut their chip orders,” said Rebekah Young, an economist with Scotiabank.

WATCH | How microchips worth $1 each can halt production of a $40,000 car: 

The microchip crisis explained

20 hours ago

Economist Rebekah Young with Scotiabank explains how the global shortage of microchips has led to major delays in the supply chain for the car industry 0:57

It’s not just the car companies, either. Makers of everything from iPhones, to gaming consoles and even refrigerators can’t find microchips right now, which is a global supply crunch for just about everything.

A typical car rolling off the line today likely contains dozens of semiconductor microchips that control everything from the headlights to the entertainment system to GPS navigation. 

They’re relatively inexpensive, adding a few dollars apiece to the cost of a typical car. But they’re also highly customized, which means it’s next to impossible to find alternatives on short notice. But without that custom-made $1 microchip, a car company can’t finish a car that might sell for $40,000 — and the industry is scrambling to get its hands on what’s available.

“Do you remember the toilet paper shortage in March and April of 2020?” automotive journalist Stephanie Wallcraft said in an interview. “That’s pretty much what we’re going through right now in terms of semiconductors.”

“Everybody’s trying to get semiconductors all at once and there’s just not the supply to get that inventory out,” she said.

Car companies aren’t necessarily at the front of the line, so they’re waiting their turn same as everyone else. That’s causing them to idle factories in Canada until they can get the components to start building again.

GM’s facility in Ingersoll has been down for most of the year, and Ford’s main Oakville plant has been idled at times, too. The Stellantis facility in Windsor was offline for two months up until May before it reopened at limited capacity.

As recently as last year Stellantis was floating the idea of expanding production there but this week the company waylaid staff with news that it would be closing one line entirely and laying off 1,800 workers.

WATCH | Stellantis workers in Windsor react to job loss news: 

Stellantis workers react to news of a shift cut

2 days ago

Frustration, fear for Stellantis workers thinking about their futures. 1:23 

In the labour deals they hammered out late last year, Canada’s big car makers made it clear that the future of the automotive industry in Canada will be in making electric vehicles, but most of those won’t be rolling off the lines until some time in 2024 at the earliest.

Until then, Canadian car plants don’t have a lot to do, and a big part of the problem is that the vehicles Canadian plants are set up to make aren’t the ones that are selling.

“What they’re doing is they’re allocating the minimum chips to their most profitable vehicles,” Unifor president Jerry Dias said in an interview with CBC News.

“If you’re looking at the industry in North America that would be predominantly pickup trucks and SUVs.”

Young, the economist, says Canada is on track to produce about 1.2 million vehicles this year. That would be the lowest annual total since 1982 — below the 1.4 million the country made in pandemic-stricken 2020, and well off the 2.2 million annual pace that the country had been cranking out for the decade leading up to 2019.

Chip makers, mostly in Asia had been ramping up production through the first part of 2021, before the delta variant put a chill on everything again. Malaysia makes about one seventh of the world’s semiconductors, and factories there have been idled for September and October. Vietnam is another major supplier, and they too are about three months behind because of COVID lockdowns.

For both car buyers and the people who make them, the good news is that the experts think things will get back to normal at some point.  But the bad news is it could take a while.

“Demand for vehicles is very strong this year, and that could have easily closed pre-pandemic gaps this year if there were enough vehicles to buy,” Young said.

But without enough chips to go around “we see that being pushed out not only to 2022, but in fact 2023.”

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Whitehead becomes 1st CHL player to verbally commit to playing NCAA hockey

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Braxton Whitehead said Friday he has verbally committed to Arizona State, making him the first member of a Canadian Hockey League team to attempt to play the sport at the Division I U.S. college level since a lawsuit was filed challenging the NCAA’s longstanding ban on players it deems to be professionals.

Whitehead posted on social media he plans to play for the Sun Devils beginning in the 2025-26 season.

An Arizona State spokesperson said the school could not comment on verbal commitments, citing NCAA rules. A message left with the CHL was not immediately returned.

A class-action lawsuit filed Aug. 13 in U.S. District Court in Buffalo, New York, could change the landscape for players from the CHL’s Western Hockey League, Ontario Hockey League and Quebec Maritimes Junior Hockey League. NCAA bylaws consider them professional leagues and bar players from there from the college ranks.

Online court records show the NCAA has not made any response to the lawsuit since it was filed.

“We’re pleased that Arizona State has made this decision, and we’re hopeful that our case will result in many other Division I programs following suit and the NCAA eliminating its ban on CHL players,” Stephen Lagos, one of the lawyers who launched the lawsuit, told The Associated Press in an email.

The lawsuit was filed on behalf of Riley Masterson, of Fort Erie, Ontario, who lost his college eligibility two years ago when, at 16, he appeared in two exhibition games for the OHL’s Windsor Spitfires. And it lists 10 Division 1 hockey programs, which were selected to show they follow the NCAA’s bylaws in barring current or former CHL players.

CHL players receive a stipend of no more than $600 per month for living expenses, which is not considered as income for tax purposes. College players receive scholarships and now can earn money through endorsements and other use of their name, image and likeness (NIL).

The implications of the lawsuit could be far-reaching. If successful, the case could increase competition for college-age talent between North America’s two top producers of NHL draft-eligible players.

“I think that everyone involved in our coaches association is aware of some of the transformational changes that are occurring in collegiate athletics,” Forrest Karr, executive director of American Hockey Coaches Association and Minnesota-Duluth athletic director said last month. “And we are trying to be proactive and trying to learn what we can about those changes.

Karr was not immediately available for comment on Friday.

Earlier this year, Karr established two committees — one each overseeing men’s and women’s hockey — to respond to various questions on eligibility submitted to the group by the NCAA. The men’s committee was scheduled to go over its responses two weeks ago.

Former Minnesota coach and Central Collegiate Hockey Association commissioner Don Lucia said at the time that the lawsuit provides the opportunity for stakeholders to look at the situation.

“I don’t know if it would be necessarily settled through the courts or changes at the NCAA level, but I think the time is certainly fast approaching where some decisions will be made in the near future of what the eligibility will look like for a player that plays in the CHL and NCAA,” Lucia said.

Whitehead, a 20-year-old forward from Alaska who has developed into a point-a-game player, said he plans to play again this season with the Regina Pats of the Western Hockey League.

“The WHL has given me an incredible opportunity to develop as a player, and I couldn’t be more excited,” Whitehead posted on Instagram.

His addition is the latest boon for Arizona State hockey, a program that has blossomed in the desert far from traditional places like Massachusetts, Minnesota and Michigan since entering Division I in 2015. It has already produced NHL talent, including Seattle goaltender Joey Daccord and Josh Doan, the son of longtime Coyotes captain Shane Doan, who now plays for Utah after that team moved from the Phoenix area to Salt Lake City.

___

AP college sports:

The Canadian Press. All rights reserved.



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Calgary Flames sign forward Jakob Pelletier to one-year contract

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CALGARY – The Calgary Flames signed winger Jakob Pelletier to a one-year, two-way contract on Friday.

The contract has an average annual value of US$800,000.

Pelletier, a 23-year-old from Quebec City, split last season with the Flames and American Hockey League’s Calgary Wranglers.

He produced one goal and two assists in 13 games with the Flames.

Calgary drafted the five-foot-nine, 170-pound forward in the first round, 26th overall, of the 2019 NHL draft.

Pelletier has four goals and six assists in 37 career NHL games.

This report by The Canadian Press was first published Sept. 13, 2024.

The Canadian Press. All rights reserved.



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Kingston mayor’s call to close care hub after fatal assault ‘misguided’: legal clinic

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A community legal clinic in Kingston, Ont., is denouncing the mayor’s calls to clear an encampment and close a supervised consumption site in the city following a series of alleged assaults that left two people dead and one seriously injured.

Kingston police said they were called to an encampment near a safe injection site on Thursday morning, where they allege a 47-year-old male suspect wielded an edged or blunt weapon and attacked three people. Police said he was arrested after officers negotiated with him for several hours.

The suspect is now facing two counts of second-degree murder and one count of attempted murder.

In a social media post, Kingston Mayor Bryan Paterson said he was “absolutely horrified” by the situation.

“We need to clear the encampment, close this safe injection site and the (Integrated Care Hub) until we can find a better way to support our most vulnerable residents,” he wrote.

The Kingston Community Legal Clinic called Paterson’s comments “premature and misguided” on Friday, arguing that such moves could lead to a rise in overdoses, fewer shelter beds and more homelessness.

In a phone interview, Paterson said the encampment was built around the Integrated Care Hub and safe injection site about three years ago. He said the encampment has created a “dangerous situation” in the area and has frequently been the site of fires, assaults and other public safety concerns.

“We have to find a way to be able to provide the services that people need, being empathetic and compassionate to those struggling with homelessness and mental health and addictions issues,” said Paterson, noting that the safe injection site and Integrated Care Hub are not operated by the city.

“But we cannot turn a blind eye to the very real public safety issues.”

When asked how encampment residents and people who use the services would be supported if the sites were closed, Paterson said the city would work with community partners to “find the best way forward” and introduce short-term and long-term changes.

Keeping the status quo “would be a terrible failure,” he argued.

John Done, executive director of the Kingston Community Legal Clinic, criticized the mayor’s comments and said many of the people residing in the encampment may be particularly vulnerable to overdoses and death. The safe injection site and Integrated Care Hub saves lives, he said.

Taking away those services, he said, would be “irresponsible.”

Done said the legal clinic represented several residents of the encampment when the City of Kingston made a court application last summer to clear the encampment. The court found such an injunction would be unconstitutional, he said.

Done added there’s “no reason” to attach blame while the investigation into Thursday’s attacks is ongoing. The two people who died have been identified as 38-year-old Taylor Wilkinson and 41-year-old John Hood.

“There isn’t going to be a quick, easy solution for the fact of homelessness, drug addictions in Kingston,” Done said. “So I would ask the mayor to do what he’s trained to do, which is to simply pause until we have more information.”

The concern surrounding the safe injection site in Kingston follows a recent shift in Ontario’s approach to the overdose crisis.

Last month, the province announced that it would close 10 supervised consumption sites because they’re too close to schools and daycares, and prohibit any new ones from opening as it moves to an abstinence-based treatment model.

This report by The Canadian Press was first published Sept. 13, 2024.

The Canadian Press. All rights reserved.



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