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00:00As U.S. President elect Donald Trump pushes on with his anti trade rhetoric the auto sector north of the border is bracing for potential consequences. Earlier in an exclusive interview Linda Maurer CEO Linda Hasson Frost weighed in on what's at stake for her industry and her company. I think it's an issue broadly for the industry not just for the automakers but for the suppliers as well. So the contemplation of a border tax I think would be hugely detrimental to the entire automotive industry in North America simply because the whole ecosystem is so intertwined between our countries. I mean we've had free trade for a very long time and there's an enormous amount of investment in all three countries and parts going back across the border multiple times. So you know overall it means adding a huge amount of cost which ultimately in my mind ends up by hitting the consumer which could be detrimental to vehicle volumes. So you know overall I just I think we can't look at it in isolation that's not one little slice. You have to look at the consequences of these kinds of decisions broadly and I think the consequences will be very negative. Given that fact and given how intricate the supply chain is have you been surprised by the OEM response to some of this rhetoric from somebody who's not even in office yet . Yeah I mean I think we've seen of a variety of responses most of which by the way have been look where you know we have capacity in Mexico we have capacity in Canada we're committed to investments in those regions and we're going to continue with them because you know I think there's not clarity on what's going to happen in terms of the new administration. So I don't think anybody wants to jump the gun and start making big strategic decisions on something that may or may not happen to me there's way too much emotion and not enough fat. I mean we should be making decisions based on facts. Policies should be built on facts not emotion of what we think and hope will create jobs. I mean the fact is the average auto part crosses the border in North America seven times before it ends up in a vehicle. You can add 10 percent tax time seven. That's an enormous amount of cost. And you know who's going to pay for that. The OEMs don't want to pay for it the suppliers Sure sure as that can't pay for it. You know who's going to pay for all that additional cost and what what are we doing putting additional cost into our industry when we're trying to be globally competitive. I mean only 20 percent of global vehicle volumes are in North America 80 percent or outside of it. And we're going to add all this cost and inefficiency to our system or cut off access to technology great technology in these three countries. I mean how does that make sense. We're trying to be competitive. All of us the whole industry on a global from a global perspective and you know limiting access to technology and adding cost is not the way to do it. It's something that will affect affect all of us. And we need to understand the numbers you know let's understand the dollar level of trade let's understand the billions and billions of dollars of investment that this is not something you can just shift just say oh you know what. I'm not going to buy all this stuff in Canada or in Mexico anymore I'm going to suddenly build it in the US who's going to pay the tens of billions hundreds of billions of dollars to to reinvest to shift all this production to the US. And you know ultimately who pays for that in the long run. And I do believe that who pays for it is the consumer . And that will be a good thing. We need that measure and then to make fact based decisions. OK let's turn then to another government that you may have a message for because one thing that President Trump has promised is a lower tax base for corporations in America makes it more attractive to do business there that may make your Canadian plants disadvantage adding higher energy costs in parts of this country. What do what's your message to our government about needing to stay competitive because you're one of the few parts suppliers that have shown you can be productive and build here in Canada. Is that going to continue. Yeah I mean absolutely. That's a good point. We need to make sure that we are keeping a competitive environment . In terms of costs in Canada I think it's great that the US is looking to reduce their their their tax rate. I think that their tax rate is way too high and impedes the competitiveness of American manufacturing. I think that's a good move to reduce those those taxes. We need to make sure that we are keeping our tax bases competitive in Canada. So I mean we've got a competitive tax rate today. Let's make sure we're not adding to those costs. Let's make sure we're keeping them at or lower than the level that they are. Energy costs you pointed out is is a concern depending on the industry year you are in it can be more or less of a concern. But without doubt we're seeing higher energy costs. So you know we need to figure out a way to manage that. And I think our governments can play an important role in how we do that. And and I don't think that lower energy costs and sustainable energy are necessarily at odds with each other. I think that there's ways that we can we can have reasonably cost reasonable energy costs that are also sustainable .

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Linamar CEO: Border Tax Could Hurt The Consumer

Linda Hasenfratz, CEO of Linamar Corp joins Bloomberg TV Canada's Amanda Lang to discuss what Trump presidency means for the Canadian auto sector. (Source: Bloomberg)