TORONTO - A parts shortage that shut down two Chrysler plants in Ontario this week is a harbinger of things to come if governments don't take immediate steps to protect the auto parts industry, suppliers say.

Chrysler's assembly plants in Brampton, west of Toronto, and Windsor, across the U.S. border from Detroit, remained closed Friday due to a shortage of die-cast aluminum engine and transmission mounts, and the company said both plants would be down Monday too.

Some reports say Chrysler -- which had to depend on $250-million from the federal and Ontario governments to make its Canadian payroll commitments this week -- was behind on its payments to the supplier, although the company hasn't confirmed or denied this.

Chrysler said it has received court permission to remove its tooling from the plant so it can move production of the parts to its casting plant in Toronto.

However, some of the machines are missing and laid-off workers are blockading the suppliers' facility to protest inadequate severance and back pay.

"If not resolved, this parts interruption could affect production at other Chrysler facilities in North America," Chrysler said in an emailed statement.

An Ontario court ordered Transcast Precision Inc. on Friday to supply sufficient parts to Chrysler, General Motors, Magna and Gates for 14 days of production. Another hearing is required within that two-week period to settle matters regarding ongoing price and supply.

"We are hopeful that the courts will recognize the established pricing and negotiations tactics that exist in market -- ones predisposed to the unfair treatment of smaller auto parts manufacturers and suppliers that rely on relatively few, but very large customers," said Dean Topolinski, President and Director of Transcast Precision Inc.

Transcast had wanted to increase the price it charged Chrysler for five days to help offset costs related to a restructuring that it wanted to pursue that would have seen the company sell existing assets to Chrysler.

However, Transcast said instead the automakers took the company to court to seek the return of tooling and parts.

The dispute is one more indication that the auto parts industry is running on empty, said Linda Hasenfratz, CEO of major Canadian parts supplier Linamar Corp. (TSX:LNR).

If the parts companies don't meet the terms of their lending agreements, the banks are calling the loans and the suppliers don't have the option to continue under bankruptcy protection, she in an interview.

"They can't get credit anywhere else, so they're out of business," Hasenfratz said. "I expect to see more of it."

Hasenfratz said it has been reassuring to see the United States taking steps to stimulate auto sales and assist suppliers, but the parts industry desperately needs Canada to follow suit.

On Monday, U.S. President Barack Obama said General Motors and Chrysler hadn't met the requirements for long-term bailout loans, and gave GM until the end of May to come up with a new plan.

Chrysler has until the end of April to cement an alliance with Italian automaker Fiat.

In the meantime, the Obama administration has taken several steps to boost the industry, including $5 billion in the form of guarantees for receivables, or payments owed for parts already delivered.

The U.S. government also said Monday it will back new car warranties in the hopes of easing consumer fears that one or both troubled companies could go bankrupt, and it committed to find funding for a vehicle scrappage program.

In Canada, the federal and Ontario governments joined the United States in demanding further concessions, and agreed to extend $4 billion in stop-gap funding for the companies' Canadian arms.

However, Canada has done very little for the parts industry, thus putting Canadian suppliers at a significant disadvantage, Hasenfratz said.

She said Export Development Canada does have a program to insure receivables, but it's more expensive than the American version and the federal agency has stopped insuring new deliveries to Chrysler entirely.

"So we're really disadvantaged unless the Canadian government puts a similar program in place," Hasenfratz said.

Gerry Fedchun, president of the Automotive Parts Manufacturers' Association, also called on the Canadian government to develop a scrappage program and provide suppliers with guarantees on receivables.

But he said suppliers also need a "direct infusion of cash" from the government to make it through the year.

"I have parts manufacturers that need some government loans just to meet payroll," he said.

"These are good, long-standing companies but they've just run out of cash because production levels have been half, 40 per cent of what they usually are and they can't go to their bank and get more cash."

Fedchun said that without government assistance, the parts shortage currently affecting Chrysler's Canadian plants is "just the tip of the iceberg" for parts suppliers and their customers.

"You get another 15, 20 bankruptcies and you're going to see most of North America down, because these people don't just supply Chrysler, they supply everybody," he said.

Rick Laporte, president of Canadian Auto Workers Local 444, said he represents five supplier plants as well as Chrysler's Windsor plant, where the company makes all its minivans for the North American market, and his members are nervous.

"The rumours suggest that this is only the beginning for supplier plants, so this puts workers on edge," he said. "Everybody's scared for their jobs these days because there's no security anywhere."