OTTAWA - Canada's trade minister is warning the collapse of struggling automakers General Motors and Chrysler could have a domino effect on more stable car companies.
Stockwell Day spoke with Honda executives during his two-day trade mission to Japan and said Thursday they share his concern that if one automaker goes down, even those on a firmer footing could follow.
"We agreed that the supply chain in North America really serves all of the automakers and, if a main company goes down, it will pull supply chains down with it," Day said.
"That will affect other automakers whose position may not be as precarious."
The trade minister spoke by teleconference from Japan, where he wrapped up his trade mission to Tokyo and Nagoya.
His remarks followed Industry Minister Tony Clement's candid admission this week that no automaker is too big to fail.
"If -- again, underline the if -- if there started to be failure, that would affect all auto companies," Day said. "It's important that the industry survives, because what hurts one could hurt the other."
GM and Chrysler have been teetering on the brink of bankruptcy for months because of falling sales, high costs, heavy debts and a broad-based shortage of credit from commercial lenders.
Their position became even more precarious in late March after they failed to meet conditions laid out by Washington and Ottawa for tapping into billions of dollars of taxpayer aid to help them retool.
The two governments have given Chrysler until the end of April -- and GM until the end of May -- to re-submit restructuring programs to help their long-term survival.
Meantime, the Conservative government will provide nearly $1 billion in guarantees aimed at restoring confidence to skittish consumers and parts suppliers that deal with struggling car companies.
But some argue other car manufacturers, including Ford, will stay standing even if GM and Chrysler go down. Auto analyst Dennis DesRosiers estimates such a collapse will result in the loss of 100,000 jobs, at most.
