August 4, 2011 / 3:03 PM / in 6 years

GM invests $117 million in Canada for new Cadillac

VANCOUVER (Reuters) - General Motors Co said on Thursday it will invest $117 million to ready its assembly plant in Oshawa, Ontario, to build the new Cadillac XTS luxury sedan, securing 400 jobs at a factory that had been hard-hit by layoffs.

<p>General Motors auto workers prepare rows of the new Chevrolet Camaro for delivery, at the company's Oshawa Ontario facility April 8, 2009. REUTERS/Fred Thornhill</p>

Production is planned to start in the first half of 2012 at the plant, which laid off more than 1,000 workers during the brutal downturn in the North American auto sector in 2008 and 2009, when GM filed for bankruptcy protection.

“Adding the Cadillac XTS affirms GM’s commitment to a strong manufacturing base in Canada, ensuring Oshawa will have a critical role in the ongoing transformation of Cadillac,” said Kevin Williams, president and managing director of General Motors of Canada.

The Canadian Auto Workers union welcomed the announcement but Local 222 president Chris Buckley said it was no surprise as “the Cadillac is a vehicle we bargained for”.

“Our major obstacle is that we have a consolidated plant that produces the Chevrolet Impala and Equinox, which will be idled in 2013... We need new products at the consolidated plant else we will suffer,” Buckley told Reuters.

GM said that over the past year, the Oshawa plant has added two new shifts and 1,300 employees to its assembly line, along with production of its Chevrolet Equinox, Chevrolet Camaro convertible, and Buick Regal.

The new investment will let the plant create or retain 400 jobs, GM said. The plant employs 4,500 workers and is GM’s biggest facility in Canada.

GM was given $9.5 billion in Canadian loans in 2009 to help it avoid liquidation. At the time, the company said it would maintain just under 20 percent of its U.S.-Canada production in Canada, and spend C$2.2 billion ($2.25 billion) on capital projects in the country through 2016, as well as C$1 billion on research and development.

Separately, GM said earlier on Thursday it will make a new luxury compact Cadillac sedan next year that is aimed at taking market share from foreign nameplates such as BMW.

($1=$0.98 Canadian)

Reporting by Nicole Mordant; editing by Peter Galloway and Rob Wilson

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