GM says it wants Canada plants but sees tough talks

Tue Jun 12, 2012 2:34pm EDT
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(Reuters) - General Motors Co (GM.N: Quote), which said this month it would shut down an assembly line at an Ontario plant, still wants to keep production in Canada, its chief executive said on Tuesday.

But he cautioned that high manufacturing costs in Canada mean upcoming contract talks with the Canadian Auto Workers (CAW) union will be tough.

Canada is now the most expensive place in the world to assemble a motor vehicle, GM CEO Dan Akerson said, adding that the company's investments must make economic sense.

Asked if the planned closure next year of an assembly line employing about 2,000 workers at GM's Oshawa, Ontario, plant was a sign of what could happen if unionized Canadian workers take a hard line in contract negotiations, Akerson said:

"Everything's in the mix. They're an important part of our manufacturing footprint in North America, in the globe, and we'd like to keep it that way."

GM announced on June 1 that it expects to shut down one of two assembly lines at the Oshawa plant by June 1, 2013.

The line was originally slated to cease production in 2008, but the operation was extended due to market demand for the Chevrolet Impala and the Chevrolet Equinox crossover, which have been assembled in Oshawa, GM said.

The Globe and Mail newspaper has reported that GM will switch assembly of Equinox crossovers from Oshawa to GM's former Saturn plant in Spring Hill, Tennessee.

The idled Spring Hill plant is reopening because the United Auto Workers agreed to allow GM to hire a large number of workers for the plant at wages of about US$14 an hour and minimal benefits. That compares with a typical hourly rate of about C$32 ($31.09) at Oshawa, the paper said.   Continued...