Employers in Morden-Winkler manufacturing hub planning to pivot, prioritize workers amid tariffs

CBC

20-03-2025

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From cabinet making to tractor cab manufacturing, the Morden-Winkler area in southern Manitoba is a manufacturing hub known for its innovation and resourcefulness.
Now, the twin cities and their industries employing thousands of workers about 80 km southwest of Winnipeg face a common problem: American levies on Canadian goods and this country's retaliatory tariffs.
U.S. President Donald Trump said last month he was pausing his 25 per cent levy on some Canadian goods until April 2.
Canada is applying its own tariffs to about $60 billion worth of American goods as payback for Trump's border- and metals-related levies, with another roughly $100 billion worth to follow if Trump goes ahead with a third round of what he's calling "reciprocal" tariffs on goods from around the world in early April.
In the Morden-Winkler area, the on-again, off-again dates have added to the concerns and frustrations felt at Decor Cabinets, but Morden's largest employer says it's committed to prioritizing its workers despite the ups and downs of business and the recent news cycle.
"It's really stressful, not only just the...financial impact would be huge, right, but just the stress of wondering, is it going to be or isn't it going to be?" CEO and president Stan Pauls said.
He recently gave CBC News a tour of his facility, where alder, maple and walnut wood gets crafted into custom bath and kitchen cabinets.
Pauls glides from station to station, greeting employees by name and recalling stories from his 36 years with Decor.
The company, founded in 1977, now employs about 540 people, who make and ship about 100,000 cabinets each year, Pauls says. That comes out to approximately 20 kitchens a day.
He says half their customers are in the United States.
"If they had to pay 25 per cent more for our product, it would virtually stop us from selling into [the] U.S."
And so, Decor has arranged to equally share the cost of the 25 per cent levy with its American dealers if the tariff goes ahead April 2, Pauls said — a plan that would be temporary.
He says the price tag per cabinet on both sides of the border will likely increase.
Tariffs, counter-tariffs top of mind for manufacturing hub in southern Manitoba
3 minutes ago
Duration 3:43
Winkler's Tektite Manufacturing Inc. — another of the approximately 80 manufacturers in the area, according to Statistics Canada — is dealing with uncertainty, too.
American customers account for about 30 per cent of their tractor cab sales, and competition in the U.S. is stiff, general manager and president Ted Mahood said Tuesday.
In the last month, they've expedited orders to clients, but Mahood fears those requests could dry up quickly in the face of American tariffs, he said.
"Were that to happen, you know, then you've got the consequential results of likely a very hard recession in Canada, and of course, then that's going to affect our domestic sales as well, so it's troubling," he said.
From cutting to welding, his crews assemble as many as 850 cabs for compact and smaller tractors each year, selling to clients, including John Deere, mostly in eastern Canada and the U.S., Mahood said.
Tektite gets most of its parts from Canada, except for glass, which they source south of the border, he said.
Mahood worries Canada's retaliatory tariffs could eventually hurt them, too.
"We're always looking at alternative sources. I mean, COVID taught us that. You know that you can't rely on one source," he said.
Layoffs last resort: Decor
The Winkler Chamber of Commerce says Winkler alone has at least 4,500 people working in the sector.
President Doug Eidse says the last couple of months have demanded a lot of preparation, with calls frequently going out to border brokers and experts to grasp the impact and scope of the tariffs.
Some local companies are already dealing with a 25 per cent American levy on aluminum and steel, which came into effect March 12, Eidse said Tuesday.
Although he believes they may still be able to compete given the increased steel prices in the U.S., Eidse said he's concerned even more sweeping tariffs could lead to companies downsizing and customers opting for products elsewhere.
"Another 25 per cent across-the-board tariff would definitely cause layoffs," Eidse said. "That would affect everybody importing or exporting."
As a small specialized business with 25 employees, Mahood says he wants to avoid that — as does the larger but close-knit Decor team.
Pauls says they have about 50 couples on staff, along with many newcomers.
"We're supporting the whole family, the whole household. I feel a weight, right? We have to make sure that these people, we're doing all we can to give them, continue to give them jobs, right?" Pauls said.
"We take that one very personal."
For now, he says sales are strong, but they're exploring all options, such as cutting costs and delaying a large expansion project, along with looking for other markets and taking advantage of a federal work-share program for affected businesses announced earlier this month.