Tuesday, December 09, 2014

Bailout agreement expiring 2016 for GM in Canada

General Motors Canada
General Motors Canada (Photo credit: Wikipedia)
Canada could soon see one of its largest automakers, General Motors
, dramatically decrease operations in Ontario, an auto analyst says.

The warning comes at a time when the auto parts industry, autoworkers union Unifor and others dependent on the auto sector are saying Canada is missing out on its share of new auto investment.
Investment in plants and equipment by the Canadian automotive industry is in the range of $1.5 billion annually, down from an average of at least $3 billion each year during the early 2000s, according to a recent study from the Canadian Automotive Partnership Council.
CAPC, a partnership of auto assemblers, parts suppliers, federal and provincial ministers and union representatives, warned that Canada is losing out to the U.S. and Mexico for new investment.
Wynne Tour 20140207
Ontario Premier Kathleen Wynne tours the General Motors Oshawa Assembly Plant with then-president of GM Canada Kevin Williams, centre, on Feb. 7. An analyst is sounding the alarm about how long GM will remain in Oshawa. (Galit Rodin/Canadian Press)
Canada makes 2.4 million vehicles a year, about 15 per cent of North American production, but won’t keep that share in the years to come, the study warned. Canada may make 15 per cent of autos, but it is no longer getting 15 per cent of investment. Now, it's more in the range of five per cent.
On Wednesday, Joe McCabe, president of AutoForecast Solutions, sounded a fresh warning on General Motors, saying he expects the auto giant to pull out of Oshawa and reduce its Ingersoll, Ont., plant to a single shift, perhaps by 2019.

Bailout agreement expiring

GM’s promise to maintain 16 per cent of its production in Canada in return for its 2008 bailout expires in 2016.
McCabe said the automaker is not making plans for continued production in Oshawa.
"We talk to suppliers, the people who are responsible to bid on new programs at these facilities, and they are looking two to four years in advance, they are not hearing anything from GM," he said in an interview with CBC's The Exchange with Amanda Lang.
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