GM Canada to make C$850 million R&D investment
OSHAWA, Ontario (Reuters) - General Motors (GM.N: Quote) said on Tuesday it is investing C$850 million ($833.62 million) in research and development in Canada to meet a condition it agreed to in order that was part of the Canadian portion of a bailout of the automaker in 2009.
The money, spent between 2009 and 2016, will go towards investments in producing lighter-weight materials for vehicles, as well as software and communications, "cutting-edge" technologies that are "critical to the development of tomorrow's vehicles and the sustainability of Canada's automotive sector", GM Canada said in a statement.
In making the investment, GM Canada is living up to its part of a C$10.5 billion dollar bailout package provided in 2009 by the governments of Canada and the province of Ontario, in addition to a U.S. bailout package, after the U.S.-based automaker filed for bankruptcy.
A condition of the bailout was that "GM would increase research and development in Canada", said Canadian Prime Minister Stephen Harper, who attended the announcement at GM Canada's regional engineering center in Oshawa, in southern Ontario.
"Today's announcement honors that promise and demonstrates the company's long-term commitment to value-added manufacturing in our country," said Harper, who was joined by Finance Minister Jim Flaherty and Ontario Premier Dalton McGuinty.
Canada's auto assembly sector is once again making profits but is a far cry from its heyday in the 1990s when it was the fourth biggest auto maker in the world before costs surged due to a stronger Canadian dollar.
It has since fallen out of the top 10.
($1 = 1.0197 Canadian dollars)
(Reporting by Julie Gordon, Writing by Nicole Mordant in Vancouver; Editing by Peter Galloway)
© Thomson Reuters 2017 All rights reserved.