TORONTO (Reuters) - General Motors Co said on Friday that it expects to shut down an assembly line employing about 2,000 workers at its Oshawa, Ontario plant by June 1, 2013.
The consolidated line, one of two assembly lines at the Oshawa plant, was originally slated to cease production in 2008, but production was extended due to market demand for the Chevrolet Impala and Chevrolet Equinox crossover, GM said.
The company, which first announced plans to close the line in November 2005, will shift Impala production to its flex assembly line in 2013. The flex line currently builds the Chevrolet Camaro, Camaro Convertible, Buick Regal and Cadillac XTS.
Some of the 2,000 workers may be hired by the flex line, if market demand for the Impala necessitates a third shift, but the sector is bracing for major job losses.
As many as one-quarter of the jobs could move to the other line, said Scotiabank economist Carlos Gomes, translating to approximately 1,500 lost jobs.
"I don't really think it's an indication of the health of the sector," he said. "Nevertheless, it's never a positive when you see those kinds of job losses."
General Motors of Canada communications director Faye Roberts said it was too early to predict job losses because some employees could retire or go on "indefinite layoff".
GM notified Canadian Auto Workers (CAW) employees on Friday that one of three shifts on the consolidated line will be removed in the fourth quarter of 2012.
A second shift will stop in the first quarter of 2013 and the consolidated line will cease entirely when production of the current generation Chevrolet Impala ends, likely in June.
While the news was not a surprise, it is still disappointing, said Chris Buckley, who heads CAW Local 222, which represents the plant workers.
"General Motors has made their intentions extremely clear over the last year or so, but we were hoping they would change their position," he said.
"It's disheartening that they've decided to close this plant. What's even more disheartening is they're not even giving us an opportunity to see if we can do something creative to attract new investment."
CAW President Ken Lewenza called GM's decision short-sighted, saying the company's best course of action may be to use its existing capacity to meet growing demand for vehicles.
"The decision to close this very productive line and put 2,000 more workers out of a job is ill thought-out and could damage the company in the long run," Lewenza said in a statement.
"It is also a betrayal of the tremendous work and sacrifices by our members that went into keeping General Motors afloat in 2008-2009, when the company was on the verge of bankruptcy."
The current contract for CAW members at GM expires this September, with negotiations for a new three-year deal expected to start in July.
The line closure will be "front and center" during bargaining, Buckley said.
Reporting By Susan Taylor, with additional reporting by Allison Martell in Montreal; Editing by Janet Guttsman, Jeffrey Benkoe and Tim Dobbyn