Closing Oshawa Could Violate GM's Bailout Conditions

Derek Kreindler
by Derek Kreindler
closing oshawa could violate gms bailout conditions

As part of their bailout package, General Motors agreed that at least 16 percent of its North American production would take place in Canada. The closing of the Oshawa consolidated line may cause GM to be in violation of those terms.

A report in the Globe and Mail states that unless GM can find more capacity, whether at the Oshawa flex line or elsewhere, GM will only be building 13 percent of its North American-produced vehicles in Canada once production of the Impala and Equinox moves to factories in the United States. Currently, the two Oshawa lines and the CAMI plant in Ingersoll, Ontario account for a 21 percent share.

GM says it intends to honor its commitments, but no government officials would divulge the penalties or mechanisms in place to ensure that GM complies. Negotiations with the CAW are scheduled to begin this summer, and the union is hoping to save the roughly 2,000 jobs at stake by reversing GM’s decision on the consolidated line and convincing them to add a third shift to the Oshawa flex line, something that GM says is not in the cards.

Join the conversation
6 of 45 comments
  • George B George B on Jun 22, 2012

    I see a fleet-only Impala Classic in our future. Police departments and rental car companies would appreciate a big sedan for a low price and producing some old Impalas would delay paying penalties to Canada until the economy starts to grow again.

  • El scotto El scotto on Jun 22, 2012

    It should get interesting when GM and the Canadian Government start arguing over the numbers. GM is kinda like Las Vegas; mike one huge bet or lose money all night?

  • Dusterdude Dusterdude on Jun 22, 2012

    I basically agree the Canadian /Ontario government were under serious pressure to kick in the billions for the bailout -- but am I to presume that there weren't serious guarantees with the billions of $'s ?? How is it that GM could talk about closing a plant 3 mere years after this bailout commitment ? I didn't hear that the Mexican government kicked in any money -- they aren't closing any plants in Mexico ...hmm ??

    • 28-Cars-Later 28-Cars-Later on Jun 23, 2012

      Its all about the currency wars... Fed is purposely inflating our currency to weaken the dollar vs other currencies in order to make US exports more attractive, among other things (such as exporting their inflation to the Chinese who peg the yuan to the dollar). The peso is still weaker than the dollar... 1 US dollar = 13.8330 Mexican pesos according to the googles, while 1 US dollar = 1.0249 Canadian dollars at the same time. You've heard "its the economy, stupid" in this case "its the currency, stupid". Also Impala's don't exactly fly off the shelves at attractive prices to justify the increased production costs due to the Dollar to CDN rates...

  • Oboylepr Oboylepr on Jun 30, 2012

    Oshawa's manufacturing loses to date: GM North plant: 2 stamping plants, Injection moulding, RIM, paint shop, brake parts, window regulators and more. Rad/trilink Truck plant: The best one they had. Battery plant: Supplied many OEM's besides GM One of the two car plants. What's left will go the way of the above, no doubt about it.