Ottawa, Ontario – Canada’s auto parts manufacturers will implement major structural changes in 2009, including the elimination of some 36,000 jobs in 2009, according to a new report by the Conference Board.

According to the board’s Canadian Industrial Outlook: Canada’s Motor Vehicle Parts Manufacturing Industry Spring 2009, the companies will trim the workforce by one-third, as part of a 34 per cent reduction in industry costs this year.

“Conditions will be undeniably difficult in 2009, and many small and medium-sized firms could potentially go out of business,” said economist Sabrina Browarski, author of the study. “The larger manufacturers, however, stand to increase their global market share when U.S. demand for automobiles starts to recover in 2010.”

Canada’s auto parts makers will lose money for the second consecutive year in 2009, but the industry is expected to return to profitability beginning in 2010. The industry posted a $109 million loss in 2008, and is forecast to lose an additional $173 million in 2009 as production is expected to fall by 39 per cent.

Extensive cost-cutting and the start of an anticipated rebound in U.S. auto sales next year will allow the industry to return to profitability quickly. The report forecasts a profit of $222 million in 2010, and the industry should return to historical norms by 2013. The medium-term outlook is based on the assumption that General Motors will successfully exit bankruptcy protection, and that Chrysler will be restructured under a stable partnership with Fiat.

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