TORONTO — General Motors Canada will slash its workforce by more than half by 2014 and close as many as 310 dealerships by the end of next year as part of a broad restructuring plan announced by the company Monday.
The troubled company’s Canadian arm will reduce its hourly workforce by 57 per cent, from 10,300 currently to 4,400 over the next five years. The company employed 20,000 Canadians as recently as 2005.
Many of the 5,900 jobs being eliminated under Monday’s latest streamlining plans were previously announced and include the closure of a truck plant in Oshawa, Ont., and a transmission plant in Windsor, Ont.
GM Canada spokesman Stew Low estimated that Monday’s announcement will affect about 1,500 jobs on top of those already announced.
The announcement didn’t surprise Canadian Auto Workers president Ken Lewenza.
“The reality is there’s been significant plant closure announcements in Canada that are going to take place within the next couple years, and we’re not totally surprised by the numbers although they’re a little bit more than we’d anticipated,” he said.
Lewenza said he expects most of the new job cuts will be through attrition.
Meanwhile, a spokesman for the Canadian Automobile Dealers Association estimated that the dealership closures — from 705 today to between 395 and 425 by the end of next year — could affect 12,000 Canadians.
“It’s very significant and that reflects the market share decline they’ve been experiencing for a number of years now,” said Michael Hatch, the association’s chief economist.
The company said it also plans further cuts to its white-collar workforce.
The announcement by General Motors Canada came as its Detroit-based parent company General Motors Corp. (NYSE:GM) said it would cut 21,000 U.S. factory jobs by next year and phase out its storied Pontiac brand.
The company released its new restructuring plan after governments in Canada and the United States said its previous plan was insufficient for the company to receive long-term government aid. GM has until the end of May to get its new plan approved so it can continue receiving billions of dollars in government assistance.
GM Canada said the new plan will move “faster and deeper” than its previous one and will “speed the reinvention of the company’s operations into a more customer-focused, leaner, and more cost-competitive automaker.”
Federal Industry Minister Tony Clement said the restructuring would be painful but is necessary to ensure GM’s long-term viability.
“It will take severe restructuring, there’s no doubt about it and the job losses are terrible,” Clement said Monday during Question Period.
“But at the end of the day we as a government cannot be supportive in terms of long-term loans unless there’s a viable restructuring plan.”
In a piece of good news, GM Canada will launch three of six new products at its Oshawa car plant and the CAMI joint-venture factory in Ingersoll, Ont., which the company runs with Japanese carmaker Suzuki.
These will include the Chevrolet Camaro, the Chevrolet Equinox and the GMC Terrain.
The Ingersoll plant currently produces the Pontiac Torrent, which will be phased out along with the rest of the Pontiac brand, but GM Canada said the Torrent would be replaced with the GMC Terrain.
But Lewenza said the elimination of the Pontiac brand will affect GM’s St. Catharines, Ont., plant, which builds Pontiac engines, and could possibly speed up the closure of its Windsor transmission plant.