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article imageReport says Canadian Auto parts firms will cut 37,000 jobs

By Bob Ewing     Jun 18, 2009 in Business
A report from the Conference Board of Canada says auto parts makers will cut 37,000 jobs as the North American industry undergoes massive restructuring.
Over the years the auto parts sector has been slowing losing jobs, however, the losses this year are expected to top the total of the last four years combined.
Ontario, which has the most auto parts companies, will be hardest hit.
The Conference Board's report says the sector will also record its second consecutive year of losses this year, totaling $173 million as a result of production cuts of 39 per cent. The parts makers lost $109 million last year.
Sabrina Browarski, an economist with the Ottawa-based think tank and author of the report said "This year alone, we're looking at about $7.5 billion in nominal cost cuts for the motor-vehicle parts sector, and going forward to about 2013, I would say these cuts in the parts sector, and also in the vehicle sector as well, are necessary changes that need to take place so profitability can be a reality again going forward."
"It looks like the vast majority of small parts producers are facing significant financial pressure, and bankruptcy may be an option for the majority of small and medium-sized firms in the sector," she added.
On another note, the report says things are actually looking up for the industry as parts manufacturers are expected to return to a profitability in 2010 as U.S. demand for autos ramps up.
The reports adds the sector will realize a profit of $212 million next year, building to over $1 billion in 2013, slightly more than where it stood in 2007 and the sector is expected to start needing more workers starting in 2011.
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