TORONTO - Improving demand for General Motors vehicles built in Canada is allowing the automaker to rapidly expand capacity, the company's Canadian president said Tuesday as he announced the second major investment in a southern Ontario plant in just over a month.
"Strong customer demand for our new vehicles is driving improved financial results and the rapid capacity expansion under way," stated Kevin Williams, the new president of GM Canada.
The automaker said it will spend $245 million to build a new line of fuel-efficient six-speed transmissions at its St. Catharines, Ont., 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 St. Catharines operations used to employ thousands of workers before a series of cuts over the last decade or so pared the workforce significantly.
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 the plant's 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.
"Businesses know that General Motors is now here for 15 to 20 years with these two product announcements. They may look at investing in their businesses and creating more jobs in the community, so it's a win-win for everybody," he added.
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.
"Thanks to the support we received, we've transformed our business and have a strong foundation for success going forward," Williams added.
Gates said Tuesday's announcement proves taxpayer investments can pay off.
"Without their support, without their help, this announcement and this good news for the Niagara region would never have happened, so we're very grateful for that," he said.
The new transmission will supply GM's assembly plants in Oshawa, Ont., 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.
Sagging demand for larger, gas-guzzling vehicles hit the company particularly hard, costing thousands of jobs across North America. GM Canada shed about 2,600 jobs with the closure of a truck plant in Oshawa last year. It also announced plans to shut down a transmission plant in the southwestern Ontario city of Windsor this year, affecting more than 1,000 workers.
However, the company's Canadian operations, all based in southern Ontario, have rebounded dramatically. 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 in November the company 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.
GM Canada will announce its May sales numbers Tuesday afternoon.
