General Motors Returns To Oshawa, Denies Report It Could Reduce Production

General Motors Canada denied reports Wednesday that suggests the big automaker could reduce production at its Canadian plants when it adds new car models over the next few years.

The car company was reacting to industry reports that it plans to build a new version of the Chevrolet Impala and a new Cadillac at its Oshawa, Ont., assembly complex but will reduce production to below 400,000 units – down from earlier projections of 500,000.

The company said a report from the Automotive Parts Manufacturers’ Association is inaccurate, and the company does not expect a reduction in Canadian production.

GM said 2009 production in Canada was about 350,000 units – 250,000 in Oshawa and 100,000 at its CAMI plant in southwestern Ontario – and it expects volume to increase going forward. Most of that production is shipped to the United States market.

“Going forward, we will fully comply with our commitment to the Ontario and federal governments that we will maintain 16 per cent of GM’s North American vehicle assembly capacity in Canada,” the company said in a statement from its Canadian headquarters in Oshawa, east of Toronto.

“In fact, we recently confirmed that the Buick Regal will be built in Oshawa starting in the first quarter of 2011 and we have also committed to two additional models for Oshawa.”

GM did not comment on a Canadian Auto Workers union estimate that the new models could require up to 1,000 new jobs in Oshawa, where the company employs about 5,000 people.

The carmaker also said it is running its CAMI plant in Ingersoll, Ont., on three shifts and full overtime to keep up with demand for the Terrain and Equinox models.

Late last year, GM acquired full control of that plant, buying out its Japanese partner Suzuki, ending a joint venture set up in the late 1980s.

On Tuesday, December auto sales figures showed that four of the five biggest automakers saw substantial Canadian sales declines last year, with General Motors taking the biggest hit with a 29.1 per cent drop.

However GM clung to its top spot in terms of market share in 2009, selling 17.2 per cent of vehicles bought in Canada. Ford was second with 15.4 per cent, Toyota third with 13 per cent, Chrysler fourth with 11.1 per cent and Honda fifth with 8.4 per cent.

The face of the North American auto industry has been changing for years, but the pace of that change accelerated dramatically over the last 18 months when the financial crisis and global recession hit.

Many of the world’s biggest automakers suffered from a steep reduction in sales as a result of tight credit conditions for consumers and dealers as well as a general economic slowdown that clamped a lid on new auto sales in North America and around the world.

GM and Chrysler both filed for U.S. bankruptcy protection last spring, and managed to survive with tens of billions of dollars in U.S., Canadian and Ontario government loans.

GM Canada pared back its Canadian operations to deal with the new market reality, cutting a truck plant in Oshawa, with the loss of about 2,600 jobs. The company also plans to shut down a transmission plant in the southwestern Ontario city of Windsor, affecting another 1,400 jobs.