General Motors is investing C$63 million ($46 million) at its Oshawa Assembly plant in Ontario to prepare for the next generation of its gas-powered full-size pickup trucks.
The investment comes despite high tariffs on imports to and from the United States, which have forced the company to reduce shifts at the facility where the Chevrolet Silverado is assembled.
According to GM Canada, it will allow the company to “upgrade stamping operations, supporting preparations to build the next generation of gas-powered full-size pickups and enhancing capability in the service parts business.”
Oshawa Assembly has received CA$1.5 billion ($1.1 billion) in investment since 2020, GM stated.
Production Cutbacks
A month ago, the Detroit automaker confirmed a previously announced layoff of 750 workers at the Canadian plant, affecting more than 1,500 additional jobs throughout the supply chain.
The layoffs, first announced last May, had been delayed due to strong demand for the Silverado pick-up.
This was the second major reduction in GM‘s Canadian production in just a few months.
Last October, GM‘s CEO revealed at the third-quarter earnings call that the company was halting “BrightDrop production at CAMI Assembly,” which also affected over 1,000 jobs.
Amid production cutbacks, the Canadian Government announced reductions to the annual remission quotas on imported vehicles for both GM and Stellantis.
GM was subjected to a 24.2% reduction, after its moves in both Oshawa and Ingersoll.
Still, and according to a new statement released by the company, “CAMI Assembly continued to be assessed for future opportunities.”
Additionally, St. Catharines Propulsion, where the automaker produces engines, “continues to play a key role — today and into the future — and will produce GM‘s next-generation of V8 engines, which power our high-demand full-size trucks and SUVs.”
Regarding the Oshawa plant, it remains unclear whether General Motors will introduce a third shift again.
All these plants are located in Ontario, where most of the Canadian auto industry is.
Manufacturing
Earlier this month, the Canadian government announced a series of new measures set on transforming the country’s auto industry.
Ottawa announced the allocation of CA$3 billion from the Strategic Response Fund and up to CA$100 million from the Regional Tariff Response Initiative to help the auto industry “adapt, grow and diversify to new markets” alongside the United States.
Amid concerns over manufacturing jobs — with the auto industry mostly located in Ontario — the Government vowed to “protect Canadian auto workers and businesses from immediate pressures.”
They aim to provide a ‘Work-Sharing’ grant, a tool to prevent layoffs and support worker retention as businesses plan for the future, as well as employment assistance and reskilling support for up to 66,000 workers across Canada, including displaced auto workers, through a $570 million investment.
The plan also includes the establishment of “a new workforce alliance of industry, labour, and training partners to address bottlenecks and catalyse private investment.”
International Partners
Ottawa recently reaffirmed it will maintain counter-tariffs on auto imports from the US to “ensure a level playing field for Canadian automotive manufacturers in the domestic market.”
While traditional automakers seemed to be backing out of Canada, Ottawa turned to other international partners to sustain its auto industry.
Canada signed a deal last month with China that lets up to 49,000 electric vehicles be imported each year at a reduced tariff of 6.1%, in exchange for lower rates on agricultural goods exports.
The agreement has attracted criticism from politicians and automakers, both in the US and Canada.
Ontario’s Premier Doug Ford called it an attack on the Canadian auto industry and warned that the deal could jeopardize Canada’s trade relationship with the US, its largest export market for vehicles.
General Motors‘ CEO Mary Barra has also criticized the deal, a Wall Street Journal report revealed last month.
“I can’t explain why the decision was made in Canada,” Barra said during an internal meeting with employees, according to the outlet. “It becomes a very slippery slope.”
