By December, GM Canada's main assembly operation is expected to have 2,600 hourly employees — down from 3,600.
GM Canada says it's working with the Unifor union, formerly known as the Canadian Auto Workers, to offer retirement incentives to eligible workers.
The downsizing is being timed to the end of production of the Chevrolet Camaro sports car, now officially scheduled for Nov. 20. The company says it remains committed to Canada, and will continue to produce five other vehicles in Oshawa.
Unifor has been bracing for a significant downturn since GM announced in late 2012 that it would end production of the Camaro.
"We knew the announcement was coming but it still doesn't make it any better," said Jerry Dias, national president of Unifor, adding the union was working to mitigate job losses with a voluntary early retirement program.
He also raised questions about the federal government's recent sale of GM shares to Goldman Sachs for $3.3 billion.
"The selling of the shares, both by the province and the feds, certainly took away bargaining power," Dias said.
"Shareholders have rights, shareholders have power, and they just gave it away, which to me was completely foolish. Before they sold any of their shares, they should have solidified General Motors' footprint in Canada. But they were all about balancing the budget."
A decision on another product for Oshawa won't be made until after the next labour contract with Unifor, GM says. That contract will be negotiated next year.
In addition to the Oshawa manufacturing operation, GM Canada owns the CAMI assembly plant in Ingersoll, Ont., which recently received an $800-million investment commitment from the company.
In Oshawa, where General Motors has its Canadian headquarters and a research operation as well as the vehicle assembly operations, the company will continue to operate two plants.
The so-called flex plant will drop to two shifts from three after Camaro production ends, while the other plant will continue to have one shift.
The vice-president of GM Canada said recent announcements show the company remains "very very bullish on Ontario and Canada as places to invest."
"The whole industry is clearly looking at some very radical changes as cars get integrated into mobile networks and we're building on some of that experience that we have in Ontario," David Paterson said. "There's an awful lot going for Ontario and we intend to be here for the long term. We're just going through a process and we're going through it in the time frame that we're going through."
Brad Duguid, Ontario's minister of economic development, said he remains "disappointed" by GM's decision to cease production of the Camaro.
"As always, my immediate concerns are with the impacted employees and their families," he said in a statement. "It remains my top priority to work closely with GM, Unifor, and the federal government to secure a future mandate for GM’s Oshawa facility beyond 2016."
General Motors announced Thursday that it plans to spend US$5.4 billion to improve its U.S. factories during the next three years, creating about 650 new jobs. In December, the company said it planned to invest US$5 billion to modernize and expand its four factories in Mexico.
Dias says Canada should take notice.
"That is just a prime example of why we so desperately need an auto strategy here in Canada because the government clearly has lost touch with the industry," he said.
Tony Faria, co-director of the Office of Automotive Research at the University of Windsor, said Canada needs to become more competitive in trying to attract automotive investment.
"The federal and Ontario governments have got to decide to what degree they want to maintain an automotive industry in Canada," he said. "Certainly Canada cannot compete with Mexico on wages....but Canada has to at least be competitive wage cost wise with the U.S."
In addition to labour costs being lower for automotive companies in the U.S., Canada also has higher energy costs and strict business regulations, Faria said.
"Ultimately, if we don't hang on to our automotive assembly, we're probably going to loose automotive technical investment as well," he said.
— By Paola Loriggio in Toronto.
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