The three corners of the North American economy are Real Estate, Personal Spending and Automobile Industry. All the three in trouble in USA and this is getting reflected in the Canadian Economy. It is predicted that Ontario might slip into Recession in 2007.

Magna owned by our Ms.Belinda Stronach needs to focus upon her business to pull it out of trouble. If not the economies of Mississauga, Brampton, Malton, Oakville and Burlington will all be affected due to this as Magna is the biggest employer around these areas.

Hope this will not reflect upon the real estate prices in these areas.

------------------------------------------------------------------------------------

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1165531811164&call_pageid=968332188492&col=968793972154&t=TS_Home

Thousands losing auto-parts jobs
Magna-owned plants trim 3,000 workers in GTA as Big 3 troubles trickle down
Dec. 8, 2006. 05:24 AM
TONY VAN ALPHEN
BUSINESS REPORTER


Auto-parts powerhouse Magna International Inc. has cut about 3,000 employees — primarily in the Toronto area — because of falling business from its key customers.

Although the parts industry has run into trouble during the last few years, there have been few reports of the human toll at Aurora-based Magna, Canada's biggest auto-parts maker and the third-largest supplier in the world.

Magna plants are mostly non-unionized and generally small, with workforces between 100 to 200 employees. Magna's layoff numbers usually fall under the radar screen of disclosure requirements to the Ontario government's labour ministry.

Many company plants also use other names to identify themselves such as Dortec, Toralcast, Maple Stampings and Plydex.

Statistics show employment in Canada's auto-parts sector, which is concentrated in southern Ontario, has plunged by about 10,000 jobs since the start of last year to less than 90,000.

Industry insiders say that, despite Magna's strong financial health, pressures have left the company no choice but to cut its workforce significantly.

\"They are in the middle of laying off 3,000 people and I understand it is in the GTA,\" said one industry insider familiar with recent company moves.

Another source said he received information that Magna's Intier division, which makes interior parts including seats and instrument panels, has cut about 1,000 jobs.

The sources said it is unclear whether the layoffs have occurred since the start of the year or in recent months as tough industry conditions persist.

A senior Magna official denied yesterday that the company has experienced major layoffs this year but acknowledged there have been job cuts at some plants.

Magna spokesperson Tracy Fuerst added the company will not disclose the number of overall job losses in Canada or the region.

\"Some plants are increasing in employees, others decreasing. And of course, there is an ebb and flow to our business that results in changes to employee levels from time to time,\" said Fuerst, director of corporate communicatons and media relations for Magna International of America Inc.

Magna has been traditionally reluctant to disclose layoffs, closures or other negative developments.

One plant manager in Newmarket said yesterday there have been \"some\" layoffs, and then immediately referred questions to headquarters.

The layoffs at Magna are the latest blow to the GTA's manufacturing base, which has been reeling from vicious competition during the last few years.

Magna alone operates 60 plants with a workforce of more than 20,000 in southern Ontario. Most of those operations are in the Toronto region.

In the auto sector, numerous suppliers here and across the continent have sought bankruptcy court protection, have closed plants, shrunk operations and reduced staff. They are stuck in a classic business squeeze where prices and demand for their products have dropped while the costs of production and materials rise.

Furthermore, Canadian parts suppliers who are big exporters have experienced an appreciating dollar which makes their products more expensive.

Magna, whose profits fell 41 per cent in the third quarter to $94 million U.S., also faces the problem of relying heavily on the struggling North American-based automakers for its business.

Almost two thirds of its sales are with General Motors, Ford and DaimlerChrysler, which are reducing production because of declining demand and stiff competition from Asian rivals.

Although Magna is trying to diversify and win more business from Asian-based auto makers, the company said in its third-quarter report to shareholders that it \"may further rationalize\" some production facilities.

\"In the course of such rationalization, we will incur further costs related to plant closings, relocations and employee severance costs,\" the company added.

Gerald Fedchun, president of the Automotive Parts Manufacturers Association, said extensive layoffs at Magna would not surprise him.

\"It's only a matter of time before companies even as strong as Magna have to adjust to the new reality,\" he said.

Al Power, a former chief executive officer of Magna subsidiary Decoma International, said although he had no knowledge of the company's employment situation, less business from the Big Three would result in reductions.

\"It is inevitable that Magna would have to downsize in order to offset the declining production of the Big 3,\" he said.

-----------------------------------------------------------------
Speech by Thomas Friedman of The New York Times....

"When we were young kids growing up in America, we were told to eat our
vegetables at dinner and not leave them. Mothers said, 'think of the
starving children in India and finish the dinner.' And now I tell my
children: 'Finish your maths homework. Think of the children in India
who would make you starve, if you don't.'"

Interesting article indicating the trend which is going to hit ON inevitably.

desis be careful esp. when buying houses with highly inflated rates .

One bust ( several layoffs) and people will be scrambling to sell them at much less price


Better not to pay exorbitant prices for houses keeping in view of the slowdown coming in 2007 ( predicted by many financial analysts of big 5 Banks )

-----------------------------------------------------------------
Non illigitamus carborundum

Arent prices dropping already ..well it would be worth waiting till end of 2007 to 2008 to get possibly lower rates for financing houses and may be a shade cheaper .
Some experts in the field say that the cycle is going to come full circle in 2 years time ..
Any comments

Right now houses stays on market for more days however new homes already booked before so looks strong. Is it worth to hold back buying a house around Mississauga, Brampton or Malton area untill summer 2007 or beyond? Any comment