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(Reuters) - General Motors of Canada (GM.N) said on Friday it will add a third shift to the flexible manufacturing line at its assembly plant in Oshawa, Ontario, so that it can meet demand for its Chevrolet Impala sedan.
The shift addition is in line with a contract agreement the company reached last month with the Canadian Auto Workers (CAW) union.
If there is enough demand, GM said it will also extend the life of one shift on the "consolidated" line at the Oshawa plant for a year until June 2014. GM had planned to shut down the three-shift consolidated line in June 2013.
The company said as well it may add a third shift at its St. Catharines, Ontario, powertrain operation to produce more six-speed front-wheel-drive transmissions if there is sufficient demand.
The announcement came some two weeks after GM reached a new four-year labor agreement with production workers represented by the CAW.
The union said on September 20 that GM had agreed to add a third shift to its "flex" line in Oshawa, worth 900 jobs, and to create 100 positions at the St. Catharines facility.
Canadian auto production, about 80 percent of which is exported to the United States, has been given a boost in recent months as U.S. auto sales soar to 4-1/2 year highs on the back of cheap financing and rising consumer confidence.
In Canada, sales of GM vehicles, which include Chevrolet, Buick, GMC and Cadillac brands, rose 12 percent last month.
Existing GM Canada workers agreed to a wage freeze for three out of the four years covered by their new contract. New workers will receive less, and will take longer to reach full pay than under the previous contract.
Reporting By Nicole Mordant in Vancouver; Editing by Peter Galloway