TORONTO - The rising loonie has put GM Canada in a "difficult" position, and the automaker needs to work hard to drive down costs at its operations in Ontario to ensure they would be considered for future investment, the head of GM Canada said Monday.
"We have some work to do, our costs have gone up," Kevin Williams, president and managing director of GM Canada told reporters after a lunch time speech to the Canadian Club of Toronto.
"The Canadian dollar doesn't help us in that regard, particularly being a net exporter of products from Canada, and we've got to continue to work collaborative with the (Canadian Auto Workers union) and with the government to put ourselves in a much better light than we are today."
The company employs more than 9,000 Canadians at Ontario plants in Ingersoll, St Catharines and Oshawa.
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., in 2009, shedding about 2,600 jobs, and closed its transmission plant in Windsor, Ont., last July, putting about 1,000 more people out of work.
Canada faces some significant challenges ahead as it tries to remain competitive on the world stage, Williams said. Those include the impact of a strengthening dollar, high commodity costs, high labour costs and, in some cases, a non-harmonized regulatory environment.
However, Williams suggested Canadian exporters should look to GM's turnaround as a model on how to remain competitive.
After filing for bankruptcy in the U.S. in 2009, the company rapidly turned to profit last year as it cut debt and costs with the help of government financing from the U.S., Ontario and Canadian governments.
The company has re-emerged as a streamlined global operator -- a move that was crucial to become a competitive player in key growth markets around the world, Williams said.
"It's not just companies that need to step back and re-engineer themselves in the global context," Williams said in the speech.
"Countries like Canada must be doing the same thing to ensure longer-term economic growth, economic strength, economic stability," he said.
Williams said Canada, the company's sixth largest market, is declining in influence as a key auto market.
Meanwhile, four key emerging economies countries -- Brazil, Russia, India and China -- could soon represent 75 per cent of the world market for vehicles.
Those four-- the so-called BRIC countries -- are seeing some on the most rapid economic growth in the world, and with that comes a larger middle class and increased demand for vehicles.
Williams said it's part of the new industry reality in which GM is competing.
"Today's automakers are racing to establish global reach and global capabilities," Williams said.
"If you're not playing seriously in the emerging growth markets of the world, you will be left behind."
GM -- for years the top-selling automaker in Canada -- was in third place last month with April sales on par with last year at 22,622 vehicles sold. But being number one at all costs, is no longer GM's primary goal, Williams said, adding that the company's Canadian growth rate is still outpacing most retailers.
General Motors avoided a formal court-supervised restructuring in Canada, while it filed for a Chapter 11 bankruptcy restructuring in the United States.
Since then, the giant automaker has streamlined its products, brought in new smaller and more fuel efficient cars popular with drivers and is expanding its share of key Asian markets in India and China. The company is also putting its future in its Volt electric car and other new technologies.
Once the world's biggest car producer, GM closed 14 of its 47 plants -- including some in Ontario -- shuttered or sold off its Hummer, Saturn, Saab and Pontiac brands, and slashed its debt from about $46 billion to about $8 billion.
The company has since repaid the loans it has received from the governments but they remain shareholders. The Canadian holding has dropped below 10 per cent while the U.S. government continues to own about 25 per cent of GM's shares.
The Ontario government took a four per cent stake in the troubled automaker while the federal government took another eight per cent after they together lent it $10.5 billion. About $9 billion of that loan was converted to equity when the so-called "new GM" emerged from bankruptcy protection, while the rest has been paid back.
