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Auto industry due for a 'slowdown' says Laval International president

As the automotive industry is in the third week of a General Motors strike in the U.S., the chair of the Canadian Association of Moldmakers is worried GM will start to look at other options.

'Both sides will get more and more desperate the further we get into this' says Jonathan Azzopardi

Jonathan Azzopardi, president of Laval International and board member of the Auto Parts Manufacturers Association of Canada said the money being wasted during the strike is troublesome. (Dale Molnar/CBC)

As the automotive industry is in the third week of a General Motors strike in the U.S., the chair of the Canadian Association of Moldmakers is worried GM will start to look at other options.

Jonathan Azzopardi, president of Laval International and board member of the Auto Parts Manufacturers Association of Canada said the money being wasted during the strike is troublesome. JP Morgan analyst Ryan Brinkman estimated Tuesday the strike has cost the company just over $1 billion so far. 

If you look at GM and the footprint they have in Michigan alone, it's huge," said Azzopardi. "In perspective, the Chrysler plant was a two billion investment for us."

Azzopardi said the longer the strike continues, the less likely it is that GM will continue to invest in North America. 

"There are other ways to resolve [these issues]. If you're proactive, you think ahead," said Azzopardi. "Investment is key ... we're going into a slowdown for the auto industry. GM is trying to negotiate the best contract, and the auto workers feel like they're losing leverage. We saw this coming."

Right now, GM is still putting "regular orders" into their tier one suppliers, according to Azzopardi, who thinks the parts are likely being stockpiled for when work resumes.

If you're proactive, you think ahead. We saw this coming.- Jonathan Azzopardi

Azzopardi said the strike will "accelerate" the automotive industry into a slowdown. The current 17-million-vehicles a year in sales is a "hard expectation" to maintain. 

"What happens with GM will have to be dealt with for Ford and FCA," said Azzopardi. "We're on a seven year curve — we were due for a slowdown a few years ago and we didn't get it. We don't know how long it will go, but we should get one in the next few years."

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