GM Canada Restructuring Plan Detailed

Even if the General Motors' destiny in the United States has already been decided, people are still wondering what would be the course of action in other large markets such as Canada. Well, the American automaker today detailed its Canadian restructuring plan, revealing that the country's government will inject an additional $C10.6 billion in General Motors in exchange for a significant equity position in the new GM.

That's right, we're again talking about a New GM, similar to the one in the United States, that would step out of bankruptcy protection as a clean company and expected to get back to profitability in the next few years.

The New GM will be also focused on four core brands, Chevrolet, Buick, GMC and Cadillac, and will rely on greener and less-polluting models that would better tackle the recession. More specifically, the automaker will launch 5 new vehicles and will start the production of a new hybrid model at GM Canada assembly plants in Oshawa and Ingersoll. On the other hand, the St. Catharines facility will become responsible for the production of a 6-speed front-wheel drive assembly while the St. Catharines Powertrain will build V6 and V8 engines.

General Motors also plans to align some of its structures with the other automakers in Canada. For example, following the recently-agreed contract with the CAW, GM Canada's labor costs will be closer to those of Toyota Canada, often referred to as the main rival in the country. GM plans to invest almost $C1 billion over the next seven years in green research, development and innovation through its Oshawa-based Engineering Centre.

Overall, the American automakers promises to make substantial investments in Canadian production facilities for the next seven years, emphasizing that no plant closures will take place for the time being.

“GM Canada’s restructuring has been challenging and has required sacrifices by all of our stakeholders including our employees, retirees, the CAW, our dealers and others. We are confident that these sacrifices will lead to positive results. We appreciate the support of the Governments of Canada and Ontario that will enable us to complete our restructuring and allow for a more competitive, stronger new GM Canada,” said Arturo Elias, President, GM Canada.

“Our customers can confidently continue to purchase new vehicles and obtain service and take full advantage of GM’s leading warranty coverage throughout this process. The new GM Canada will be even more focused on our customers.”