Canada’s battered auto sector won’t see even the hint of a profit for at least three years and emerge from radical restructuring a shadow of its former self, a new report says.
The Conference Board of Canada said the days when the car was king in North America are over, even when the economy recovers.
“The auto sector in Canada and the U.S. is going to be much leaner and smaller than it was in the past. It’s not feasible, given the current business model, to operate large companies right now,” said report author Sabrina Browarski, who is an economist.
“We’re not going to see employment ever return in the near term to what we’ve seen in the past.”
The report, part of the think-tank’s spring industrial outlook series, says the short term for the auto sector is one of contraction, crumbling sales, red ink and massive layoffs.
The Conference Board estimates the Canadian automakers — particularly troubled General Motors Canada and Chrysler, but also Ford, Toyota and Honda — will lose $2.1 billion this year after dropping a cumulative $2.7 billion in 2008.