“The fact is that everyone in the auto industry is looking to consolidate their supplier list and to pressure the parts manufacturers to lower their prices,” says Wolf. “This is not an easy thing to do without substantial improvements in productivity, a low Canadian dollar and stable raw material costs – none of which is the case in today’s market.”  

Recent reports have highlighted the woes facing this vital sector of the Canadian economy, which includes many of Ontario’s largest employers. Many parts makers are struggling to meet the demands of their largest Canadian customers: GM, Ford, Daimler-Chrysler, Toyota and Honda.

Soaring steel and energy prices have hurt the industry at all levels, but it is the smaller parts manufacturers that are in the greatest jeopardy. Auto makers demand lower prices from their primary suppliers, which then pass the demand for cost savings down the line to the lower-tier suppliers. Many of these smaller companies are simply unable to slash prices and meet their contract commitments at the same time.

As well, the declining market share of Ontario’s biggest automakers bodes ill for Ontario’s vast network of suppliers. Vehicle inventories of all but the most popular models are high, and a downturn in production by the Big Three would put further pressure on the parts industry, which has already seen employment levels drop.

“The weakest will fall by the wayside,” says Wolf. “There’s no question.”

Known as Canada’s Global Business School™, the Schulich School of Business at York University is ranked among the best business schools in the world. Innovative and diverse, Schulich offers programs at undergraduate, graduate, postgraduate and executive education levels.

York University is the leading interdisciplinary teaching and research university in Canada. York offers a modern, academic experience at the undergraduate and graduate level in Toronto, Canada’s most international city.  The third largest university in the country, York is host to a dynamic academic community of 50,000 students and 7,000 faculty and staff, as well as 180,000 alumni worldwide. York’s 10 faculties and 21 research centres conduct ambitious, groundbreaking research that is interdisciplinary, cutting across traditional academic boundaries.  This distinctive and collaborative approach is preparing students for the future and bringing fresh insights and solutions to real-world challenges.

For more information, or to arrange an interview, the media should contact:

Jeff Ball, Media Relations, York University, 416-736-2100, x22086 / jball@yorku.ca

 -- 30 –