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The financial troubles of a 70-year-old auto parts supplier have prompted a dispute between the Canadian Auto Workers and General Motors Corp. that includes a union blockade of one of the parts maker's plants.

The difficulties at privately held SKD Automotive, which was founded in Windsor, Ont., in 1937, led GM to terminate its contracts with the parts maker in late December and send moving trucks to SKD's Brampton, Ont., plant to remove the equipment that makes parts for GM's Hummer sport utility vehicles and passenger cars assembled in Fairfax, Kan.

But as GM attempted to remove the tooling, the CAW blockaded the plant.

The auto maker is seeking an injunction to eliminate the blockade, but an Ontario Superior Court hearing on the issue that was scheduled for Tuesday was put off to later in the week. The blockade will remain in place until the court rules, CAW officials said Tuesday.

The Brampton plant also supplies Chrysler LLC, Ford Motor Co. and Honda Motor Co. Ltd. assembly operations and is the most recent flashpoint of the crisis afflicting the auto parts sector, which has led to several bankruptcies and tens of thousands of job cuts at auto suppliers in North America.

As vehicle production in the first quarter in Canada, the United States and Mexico falls to levels not hit in decades, parts makers that are already struggling are expected to topple into bankruptcy protection.

“Even if the worst-case scenario of an abrupt bankruptcy by GM or Chrysler is avoided, weaker suppliers still face major liquidity challenges for the foreseeable future,” rating agency Standard & Poor's warned in a Dec. 22 report.

SKD is in serious financial trouble, lawyers for GM said in court filings.

“SKD has acknowledged it is insolvent, has insufficient financing and has ceased operations,” Kim Ferreira, a lawyer with GM's Toronto law firm ThorntonGroutFinnigan LLP, said in an affidavit filed last week in support of the injunction request.

But CAW officials said company executives have made no such statements to them.

The parts company reached a deal with other customers on Monday that gave it three days to come up with new financing, the union leaders said.

“Honda, Chrysler and Ford – they were all in agreement to work toward an accommodation agreement,” said Dave Hall, chairman of the CAW unit at the Brampton plant.

SKD also has operations in the Ontario cities of Mississauga and Milton as well as Michigan and Mexico.

Officials from SKD and its parent company, National Material LP of Chicago, did not return calls Tuesday seeking comment.

The parts company makes stamped metal components such as floor pans, control arms and speaker brackets.