Canada's auto industry took another hit Thursday after Progressive Moulded Products Ltd., a Toronto-area manufacturing company, announced it would be slashing 2,000 jobs.
The job cuts came after 11 Toronto-area plants, which made plastic trim parts for General Motors, Ford and Chrysler, were abruptly closed by the company this week.
Progressive, which is facing more than $500 million in debt, announced two weeks ago that it was seeking protection from its creditors.
Debt-restructuring talks failed, and two of three Progressive plants located in the U.S. were also shut down, resulting in the loss of 300 jobs.
"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," company spokesman, Michael Daniher, told The Canadian Press.
"Obviously, the fact that upwards of 90 per cent of the company's revenue has just left does not augur well for the future."
Plant workers complained they about the closure from news reports and claimed that they had received no severance from the company. Some had more than two decades of experience under their belt.
"We had no idea the company was going out of business. These people don't respect us. They don't care about us," Evette Anderson, a machine operator told The Canadian Press.
All day on Thursday, transport trucks left the company's headquarters in Vaughan, located north of Toronto, throughout the day with salvaged equipment.
Meanwhile, security guards kept a constant vigil as suppliers waited for any opportunity to retrieve tools and other equipment.
The dilemma facing the workers punctuates the issues that Ontario's economy is confronting. Government numbers, released on Thursday, show that it shrank by 0.3 per cent during the first quarter of 2008, with the manufacturing sector bearing the brunt.
Canadian Auto Workers Union President Buzz Hargrove blasted the Ontario and federal governments for not acting on the industry's crisis. "We're just losing literally thousands and thousands of jobs in both assembly and parts -- closures, shift reductions -- but our government says don't worry about it," he told the Canadian Press.
Progressive is the latest casualty of the drop in demand for SUVs and other large vehicles made by the Big Three automakers in central Canada's auto parts industry.
General Motors, Canada's largest automaker, announced it could no longer justify operating the Oshawa plant past 2009 because of a gloomy sales forecast. The plant manufactured a number of trucks. About 2,600 jobs will be lost as a result of the closure.
Soon after, Magna International, Canada's largest auto parts manufacturer, announced it would have to slash 400 jobs as a result of cutbacks at their St. Thomas, Ont. plant. The company also blamed lagging truck sales.
Recent statistics show car and light-truck sales dropped significantly in the past year. June sales dropped 5.7 per cent from this time last year and 13.6 per cent from previous months, according to DesRosiers Automotive Reports.
