Linamar Says Canadian Plants Are Winning Record New Business Despite U.S. Trade War

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For a Canadian auto supplier operating in the middle of a bruising North American trade fight, Linamar is telling a surprisingly upbeat manufacturing story. The Guelph, Ontario-based company says customers trying to pull production back from Asia and Europe are creating significant opportunities across North America, including at its Canadian factories.

By the midpoint of 2026, Linamar said its Canadian plants had already secured roughly 90% of the value of all the new business they won during 2025 — itself their strongest year for new-business wins in three years. That momentum is unfolding while tariffs, shifting U.S. trade rules and political pressure to manufacture more in America are disrupting much of the automotive industry. Linamar’s experience shows why the outcome of the trade war is proving more complicated than a simple movement of factories from Canada to the United States.

Canadian Plants Are Winning Work Faster Than Last Year

The most striking number in Linamar’s recent results is not simply sales growth. By the end of the first half of 2026, the company said its Canadian facilities had already won about 90% of the dollar value of the new business secured during all of 2025. That matters because 2025 was already the strongest year for Canadian plant wins in three years. Executive Chair Linda Hasenfratz said Canadian facilities were continuing to secure a significant amount of work and were performing disproportionately well compared with their share of Linamar’s worldwide manufacturing footprint.

The pace suggests that the U.S. push to localize manufacturing is not automatically pulling every contract south of the border. Linamar is also winning substantial business for its American and Mexican operations, making the broader pattern one of North American localization rather than exclusively U.S. localization. For communities around Linamar’s Ontario operations, that distinction is significant. A trade environment built around shortening supply chains can still favour Canadian factories when those factories sit inside an integrated continental production system and have the technology, equipment and workforce required for a particular job.

CUSMA Is Giving Auto Parts a Critical Shield

A major reason Linamar can compete for this work is that most of its automotive parts remain sheltered from the tariffs creating problems elsewhere in the economy. The company reported in August that more than 90% of its total sales were tariff-free. Its automotive components make up a large share of that protected business because CUSMA-compliant auto parts can currently enter the United States without the 25% sectoral auto-parts tariff. Linamar has emphasized that virtually everything it ships from Canada and Mexico on the mobility side meets the applicable North American trade rules.

That creates an important distinction between producing in Canada and importing components from outside North America. Manufacturers buying parts from Asia or Europe can face additional tariff exposure, encouraging them to reconsider where components are sourced. Canadian production does not need to be brought “back” into North America because it is already there. That is why Hasenfratz has argued that Canada can benefit from onshoring even when American political rhetoric focuses heavily on bringing manufacturing back to the United States. As long as Canadian products continue qualifying under CUSMA and avoid separate sector-specific duties, geographic proximity becomes an advantage rather than a liability.

Record Mobility Results Give the Strategy More Credibility

The new-business story is arriving alongside unusually strong financial results. Linamar reported record consolidated quarterly sales of $3.14 billion in the second quarter of 2026, an increase of 18.8% from a year earlier. Its Mobility segment, which includes automotive operations, generated a record $2.36 billion in sales, up 20.5%. Normalized operating earnings in Mobility climbed 28.6% to a record $194 million, while the segment posted an 8.2% normalized operating margin. Linamar also said it gained market share in every region.

Those figures make the Canadian wins more consequential than a collection of potential contracts that may or may not develop. The company is already converting launches, acquisitions and stronger program volumes into higher revenue. Free cash flow reached $236.5 million during the quarter, and Linamar reported about $2 billion of liquidity. That financial flexibility matters in manufacturing because winning a major automotive program normally requires spending on machinery, tooling, engineering and production preparation well before the first full year of revenue arrives. Strong cash generation gives Linamar more room to fund those launches even while trade rules remain unpredictable.

Productivity Is Helping Canada Compete With Lower-Cost Locations

Linamar has repeatedly argued that its Canadian facilities survive global competition because of productivity rather than protection. Hasenfratz told a House of Commons committee in 2025 that 29 of the company’s 75 plants were located in Canada and that its Canadian factories were the most productive in its global network by a wide margin. Using Linamar’s measure of value-added sales per employee, productivity at those facilities had risen 54% over the previous decade. The company also said Canadian operations were receiving well over half of its capital expenditures that year.

That matters when customers are deciding where a newly localized component should be manufactured. Labour cost alone is only one part of the calculation. A plant capable of running machinery more efficiently, improving cycle times, reducing scrap and launching complicated components reliably can overcome differences in hourly wages. Automotive suppliers also operate under relentless pricing pressure. Linamar has said customers typically expect annual price reductions of around 2%, forcing factories to continually find productivity gains simply to protect margins while wages and other costs rise. In that environment, experienced teams can become a measurable competitive advantage.

One Major Contract Shows Why Work Can Still Land in Canada

Linamar offered an unusually concrete example during its second-quarter earnings call. Chief Executive Jim Jarrell said the company had secured what he described as a massive program for which the customer initially wanted production placed in the United States. Linamar argued that its process capability and ability to launch the job were stronger at a Canadian operation. According to Jarrell, the company and customer eventually agreed that the Canadian facility was the better location because that was where the relevant expertise existed.

The anecdote illustrates the limits of treating manufacturing decisions as purely political. Automakers and major suppliers have to launch components on schedule and at the required quality, cost and volume. Moving a program to a location with less experience can create expensive production problems that overwhelm potential tariff savings. Linamar’s footprint also gives it unusual flexibility: management can offer customers plants in Canada, the United States and Mexico and then match the work with existing expertise and capacity. In this case, the company says the final decision favoured Canada even though the customer initially preferred the United States.

Tariffs Are Still Hurting Part of Linamar’s Business

None of that means Linamar has escaped the trade war. The company’s Industrial segment has been exposed to U.S. Section 232 tariffs covering certain steel, aluminum and copper derivative products. Linamar said those measures reduced earnings growth in the second quarter, even as Mobility delivered record results. Canadian government guidance says covered metal and derivative products can face tariffs ranging from 15% to 50%, depending on their composition and classification, while various exemptions and reduced rates apply in particular circumstances.

The difference between Linamar’s businesses is important. CUSMA compliance protects most of its automotive parts from the U.S. auto-parts tariff, but it does not provide a universal shield from every American trade measure. Section 232 duties can still reach qualifying products regardless of broader free-trade treatment. Management nevertheless indicated that the second quarter would probably represent the largest dollar impact of those tariffs for 2026 because Linamar’s industrial operations are seasonally strongest during that period. The company has also been working on mitigation, including product classification, sourcing, manufacturing location and commercial arrangements with customers.

Canada’s Auto Sector Remains Highly Exposed to the United States

Linamar’s relative resilience stands out because the broader Canadian automotive industry remains deeply dependent on its southern neighbour. The federal government estimates that more than 90% of Canadian-made vehicles and roughly 60% of Canadian-made auto parts are exported to the United States. Statistics Canada has separately calculated that U.S. demand supported about 76% of payroll jobs in Canadian automobile and light-duty vehicle manufacturing in 2024. Those numbers explain why even targeted tariff changes can have outsized effects in Ontario manufacturing communities.

The integration runs both ways. Canadian factories also consume American-made materials and components, meaning tariffs imposed at one stage of production can ripple repeatedly through a cross-border supply chain. The risk is therefore bigger than whether a particular component pays duty at customs. Automakers may alter production schedules, delay investments or shift sourcing when uncertainty persists. Linamar’s strong Canadian order activity demonstrates that competitive suppliers can still win in that environment, but it does not eliminate the systemic exposure. Canada’s automotive manufacturing model was built over decades around access to the U.S. market, making predictable trade rules especially valuable.

Acquisitions Are Giving Linamar More Ways to Win Programs

Linamar’s success in securing new work is also connected to a broader expansion of its product portfolio. The company acquired Aludyne’s North American operations in 2025, adding aluminum casting, machining and structural-component capabilities such as knuckles, subframes, control arms and axle housings. Management has said the expansion into additional structural products is generating substantially more requests for quotation from customers. The company has also expanded its European manufacturing network, including acquisitions involving a Leipzig casting facility and Winning BLW operations in Germany.

The strategy gives Linamar something manufacturers increasingly value during trade disruptions: options. A supplier capable of producing multiple categories of propulsion and structural components at plants across several regions can respond more easily when customers suddenly want to change sourcing. Linamar has described several recent acquisitions as opportunities created partly by stress elsewhere in the supplier industry. That does not mean tariffs alone caused those transactions, but a difficult environment can weaken highly leveraged or narrowly focused suppliers. Companies with cash, manufacturing expertise and a stronger balance sheet can then buy capabilities that create additional opportunities when sourcing patterns change.

Canadian Investment Was Already Rising Before the Latest Wins

The current wave of business is landing on top of a substantial investment program in Ontario. In January 2025, Linamar, the federal government and Ontario announced an approximately $1.1-billion package of investments related to advanced automotive manufacturing. The federal government committed up to $169.4 million through the Strategic Innovation Fund, while the broader program was expected to protect nearly 10,000 existing jobs and create more than 2,300 positions. Federal officials said Linamar’s portion would include work on EV components, battery technologies and semiconductor packaging at facilities including Guelph, Salford, Welland and Windsor.

That spending provides physical capacity and technical capability that can help Canadian factories compete for the programs now being localized. Modern auto-parts plants do not win work merely because customers want a North American address; they need advanced equipment, engineering expertise and the ability to manufacture components at enormous scale with extremely tight tolerances. Linamar’s investment therefore helps explain why Canadian facilities are attracting work despite political pressure in Washington. Government support is only one factor in those commercial decisions, but the combined public and private spending has helped expand the technologies available at Canadian sites at a time when supply chains are being reconsidered.

Strong Wins Do Not Remove the Industry’s Biggest Risk

Linamar still sees an important threat beyond the tariffs directly charged on its own products: what those tariffs may do to its customers. Automakers have been absorbing billions of dollars in trade-related costs. Reuters reported in August that General Motors expected tariffs to cost as much as $3.5 billion in 2026, while Ford estimated roughly $1 billion. Higher production costs can eventually translate into more expensive vehicles, weaker margins, changed sourcing decisions or softer consumer demand. A supplier can therefore avoid paying a tariff itself and still feel the effects if customers build fewer vehicles.

For now, Linamar remains confident enough to forecast record sales and earnings for 2026. Management said in August that strong Mobility performance, new launches, acquisitions and new-business wins were outweighing the tariff drag on portions of the Industrial segment. The Canadian plants’ order momentum is therefore a meaningful counterpoint to predictions that the trade war must inevitably hollow out Canadian auto manufacturing. It is not proof that Canada is insulated from U.S. protectionism. Instead, it shows that productivity, CUSMA compliance, specialized expertise and an integrated North American footprint can still keep Canadian factories competitive even while the rules around them are becoming harder to predict.

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