Industry predicts auto supplier cutbacks due to GM layoffs

The Canadian Auto Workers (CAW) union and automotive industry analysts are predicting a domino effect on auto parts suppliers, in the wake of General Motors Corp.‘s announcement that it would cut production at six North American plants.

General Motors of Canada announced that it would cut more than 1,000 jobs at its Oshawa, Ont. truck plant. The company said it would cut production of the Chevrolet Silverado and GMC Sierra pickup trucks from three shifts to two.

Four plants in the U.S. and one plant in Mexico will also face layoffs, according to GM.

“This will result in the loss of over 1,000 direct jobs at the plant in addition to the 3,000 jobs that will be lost in the fall of 2008 when the car plant number two in Oshawa closes,” the CAW said in its response to the Canadian layoffs. “This means at least 4,000 jobs will be lost within the next year. This is a devastating blow to thousand of families in the Oshawa-Durham region.”

Additionally, the CAW predicted that the cutbacks would work their way down the supply chain, and further add to the loss of volume.

“In addition to the jobs lost at GM, several hundred other jobs will be immediately lost in the region, as companies which supply GM (with parts, seats, and components) also scale back employment,” the union noted.

Parts analyst David Leiker of Milwaukee, Wis.-based Robert W. Baird & Co. predicted in a report that GM’s lowered output would affect parts suppliers such as Southfield, Mich.-based Lear Corp. and Aurora, Ont.-based Magna International Inc.

Speaking to a major Canadian newspaper, the president of Canadian Auto Workers Local 222 suggested that the layoffs may affect employees at “major region suppliers” such as Milwaukee, Wis.-based supplier Johnson Controls and Woodbridge, Ont.-based polyurethane producer The Woodbridge Group.