TORONTO (Reuters) - Canada’s auto industry should turn a profit of $155 million (C$154 million) this year, despite a drop in production from waves of plant closings and job cuts, the Conference Board of Canada said on Tuesday.
“Continued savings on labor and material costs and increased production should help boost industry profits starting in 2009,” Sabrina Browarski, an economist at the Conference Board, said in a statement.
The board’s outlook comes as General Motors (GM.N) announced that its Oshawa, Ontario, truck plant would be one of four operations it plans to close.
“The Canadian automobile industry is profitable, so the Conference Board’s numbers seem to be in the ballpark,” Jim Stanford, chief economist at the Canadian Auto Workers union, told Reuters.
The Conference Board said Toyota Canada’s (7203.T) new assembly plant in Woodstock, Ontario, along with new models from Chrysler CBS.UL and GM, would boost output in 2009 and offset a drop in production resulting from the closure of the Oshawa plant.
Stanford said the Canadian auto industry stands to lose 10,000 jobs this year and another 2,600 in 2009 if GM carries out plans to shut the truck plant. The CAW has vowed to fight GM’s decision.
Reporting by Lionel Perron; editing by Rob Wilson