TORONTO — General Motors Canada is expanding a southern Ontario parts plant for the second time in a month and suggesting more growth is on the way as the former bankrupt auto giant recovers and introduces new vehicles to the market.
The $245 million committed to build new transmissions at its St.Catharines, Ont. plant reflect a brighter future for GM and Canadians should “stay tuned” for further announcements, said new company president Kevin Williams.
“As we bring new vehicles and new technologies to the marketplace, certainly Canada will play a very important role in the future success of General Motors in that regard, and while I can’t announce any (specifics) I would say, ’Stay tuned,’ ” Williams said in an interview.
“Going forward we do believe in the workforce. We have a great relationship with our unions here and we have some of the best, most efficient plants in the world.”
Earlier Tuesday, the automaker said it will build a new line of fuel-efficient six-speed transmissions at its St. Catharines plant beginning in 2012. The investment will secure 400 existing jobs at the company’s operations in the industrial city in the Niagara Region.
The announcement follows on the heels of another major investment in late April that will see the company build a new generation of V8 engines at the same plant beginning in 2013. In total, GM has announced $480 million in new spending on the factory, securing about 800 jobs.
GM’s Canadian operations used to employ tens of thousands of workers before a series of cuts over the last decade or so pared the workforce significantly. The automaker shut down its truck plant in Oshawa, Ont., last year, shedding about 2,600 jobs, and will close its transmission plant in Windsor, Ont., in July, putting about 1,000 more people out of work.
“While those were difficult decisions I’m really happy that we’re able to demonstrate the ability to reinvest in the business where it’s meaningful,” said Williams, who took over as GM Canada’s new president in March, succeeding Arturo Elias.
Analysts said the most likely future investment GM Canada could make would be to expand vehicle production at its major assembly complex in Oshawa, Ont., where it builds the Chevrolet Camaro and Impala and will begin building a Chevrolet convertible and the Buick Regal next year.
“I think Oshawa is a very strong candidate for future investment,” said Bill Pochiluk, president of industry adviser AutomotiveCompass.
He said gasoline-electric hybrid versions of the Regal and the Impala could be built at Oshawa, or entirely new products could be introduced.
“As they add production of finished vehicles, of course that will mean the need for more engines from their engine plants, more transmissions from their transmission facilities, and so on,” added Tony Faria, co-director of the automotive research centre at the University of Windsor.
The recent investments guarantee that the St. Catharines plant will operate for at least another 15 to 20 years, said Wayne Gates, president of Canadian Auto Workers Local 199, which represents GM’s St. Catharines workers.
“I believe that within three to five years you’ll see the GM facility in St. Catharines actually hiring young people to come into our plants and I think that’s obviously great news for not only young people that don’t have a lot of opportunities in the Niagara Region but it’s also great news for the community,” Gates said.
Williams, along with politicians from the Ontario and federal governments, said the investments wouldn’t have been possible without the $10.5 billion in government aid the company received while it underwent a massive restructuring last year.
“The assistance we provided last year to GM Canada has enabled its transformation into a company that is poised for growth. We are encouraged by this further evidence that GM Canada is on the road to recovery, and its commitment to doing business in Canada,” stated federal Industry Minister Tony Clement.
The new transmission will supply GM’s assembly plants in Oshawa and Ingersoll, Ont. The investment was originally announced in 2008 but was put on hold due to the global recession and its impact on GM, which was forced to restructure under bankruptcy protection in the U.S. with the help of billions of dollars from governments on both sides of the border.
The company’s Canadian operations, all based in southern Ontario, have rebounded dramatically since then. In March, GM said it would add a third shift at its Oshawa assembly plant and increase production at its CAMI plant in Ingersoll, recalling more than 700 laid-off workers to meet hot demand for its Chevrolet Equinox and GMC Terrain crossovers.
Late last year, GM also recalled more than 600 workers to CAMI and said it would add a second shift in Oshawa in 2011 to support production of the new Buick Regal and Camaro convertible, bringing back 700 workers.
The St. Catharines operation currently employs about 1,800 people, but one of its plants will shut down this year. However, GM expects all its laid-off workers at St. Catharines to be recalled by 2014.
Also Tuesday, GM Canada said its May sales of its continuing brands — Chevrolet, Buick, GMC and Cadillac — increased by 15.4 per cent compared to a year earlier. However, the company’s overall sales including its discontinued brands fell 17.6 per cent.