November 7, 2008 / 8:07 PM / in 9 years

GM to temporarily cut 500 jobs at Ontario plant

TORONTO (Reuters) - General Motors of Canada said on Friday it will temporarily lay off 500 workers at its Oshawa, Ontario, car plant as the U.S. economic slowdown slashes sales of cars and trucks.

<p>A General Motors employee inspects Chevrolet Impalas on the production line in Oshawa, Canada August 21, 2006. REUTERS/J.P. Moczulski</p>

“Because of the tough U.S. market, what we’re doing is slowing the line rate of the Impala line at the Oshawa car plant, and that impacts 500 people that will go on temporary layoff until we have recovery in the U.S. economy,” GM Canada spokesman Stew Low told Reuters.

“We ship 95 percent of what we build to the United States, so we’re directly impacted by the health of their economy and, as I think everybody knows, it’s pretty brutal right now,” Low said.

Parent company General Motors Corp reported a $4.2 billion operating loss for the third quarter, and Ford Motor Co a $3 billion operating loss, as U.S. auto sales collapsed to 25-year lows.

The Oshawa layoffs will take place the first week of 2009.

The Impala line runs on three shifts and normally makes about 56 cars an hour. That will be cut back to 45 an hour, for production of a little over 1,000 a day.

Ken Lewenza, president of the Canadian Auto Workers union said in a statement he believes this latest round of job cuts should prompt the Canadian government to give more backing to the auto sector, similar to what it did for the country’s banking sector.

“Today’s news is devastating to our members in Oshawa,” said Lewenza. “If there is a silver lining it’s the fact that these are temporary and not permanent layoffs.”

Right now about 5,000 people work in the Oshawa plant.

($1=$1.19 Canadian)

Reporting by John McCrank; editing by Rob Wilson

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