TORONTO - An executive with Magna International Inc. predicts many distressed auto parts makers will collapse during the first quarter.
Co-chief executive officer Don Walker says a “rash of failures” will occur because of severe cuts in auto production during the quarter.
North American auto production was almost completely shut down last week and most Big Three plants will be shut throughout January.
Walker told a conference in Detroit that Magna is seeing growing troubles in its own supplier base and has established a team to monitor the situation.
There were more indications of trouble Wednesday in the auto-making heartland of Ontario.
Wescast Industries Inc., a top supplier of exhaust manifolds, said it will close a foundry in Wingham, Ont., by the end of the first quarter and eliminate 140 jobs.
“This decision has been made in light of recent announcements by Wescast’s major North American customers to significantly reduce production volumes,” the company said in a statement.
The Wescast shutdown came hours after the abrupt closing and bankruptcy of a small parts supplier in Peterborough, Ont.
Employment in the auto parts sector in Canada was on track as of October to tumble by more than 7 per cent last year to 80,887 jobs, the lowest level this decade, according to data compiled by DesRosiers Automotive Consultants Inc.