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Canadian Auto Parts Maker Closes 11 Plants

Progressive Moulded Products, maker of plastic instrument panels, confirmed the shutdown of 11 small plants, costing 2,000 jobs.

TORONTO (CP) -- Another 2,000 jobs in Canada's auto industry have been gobbled up with the shutdown of 11 small plants operated by a Toronto-area company that makes plastic instrument panels.

Progressive Moulded Products Ltd., confirmed early Thursday that it had ceased operations at the plants in Concord and Rexdale during the last two days.

"As a result of a number of major customers electing to move their business elsewhere, we are undertaking immediate and drastic reduction in our operations and workforce," said company official Michael Daniher.

The company filed for court protection two weeks ago and was in ongoing discussions with major customers and lenders to find solutions to its financial problems.

Daniher says those talks failed.

"The vast majority of the company's employees have been terminated in recent days," he said. "There are still hundreds of employees on the job working to complete a number of other existing production assignments."

He said those employees "tying up loose ends" will also be out of a job soon too.

Daniher blamed a heavy debt load, declining vehicle sales, the increasing cost of commodities and currency fluctuations in North America.

He says there was no overriding reason for the closures, but acknowledged that the decision by General Motors to close a truck manufacturing plant in Oshawa, Ont., had an impact.

"Certainly unfolding circumstances in the auto industry played a significant factor in bringing the company to the unfortunate position of recent days," he said.

Progressive has 11 facilities in the Toronto area and three plants in the United States. Two of the American facilities were also closed, with the elimination of 300 jobs.

The company designs and manufacturers interior plastic systems for vehicles, mostly making integrated consoles and instrument panels for cars.

The auto parts industry is feeling the pinch from soaring fuel costs and a corresponding drop in demand for gas-guzzling vehicles and it is having a devastating effect on southern Ontario's auto manufacturing sector,

Last month, GM announced that the truck assembly plant in Oshawa would be among four North American plants being closed in the next few years. About 2,600 people work at the Oshawa facility.

Also last month, Magna International Inc., Canada's largest auto parts manufacturer, announced it would be cutting 400 jobs at its plant in St. Thomas, Ont., due to flagging truck sales.

A number of smaller companies that supply parts to car and truck makers have also closed or slashed jobs.

New statistics suggest sales are not likely to improve in the near future.

Overall Canadian sales of cars and light trucks fell to 159,529 vehicles in June, down 5.7 percent from the same month last year and down 13.6 per cent from the previous month, according to DesRosiers Automotive Reports.

General Motors, Canada's largest automaker, was particularly hard-hit as sales plunged 23.8 percent from a year ago.

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