From Canadian Press
OSHAWA, Ontario — A $2.5-billion investment from General Motors to strengthen its Ontario operations was hailed by politicians and labor leaders alike Wednesday as a move that makes Canada a bigger player on the global automotive map.
“We’re confident that we are really asserting ourselves as a major player in the auto sector on the international scene,” said Ontario Premier Dalton McGuinty, whose government committed $235 million, alongside $200 million in federal funding, to seal the deal.
“Canada’s largest automotive manufacturer is giving Ontario and its workers a resounding vote of confidence.”
Dubbed the Beacon Project, the GM investment creates 500 jobs in the province and should ensure the stability of 16,000 existing ones. It follows years of industry calls for governments to help secure more auto sector work by making it more enticing to invest in Canada. U.S. states regularly offer hundreds of millions of dollars in incentives and tax breaks to lure factory work to their jurisdictions.
Ontario’s foray into that game won’t stop with GM, McGuinty said. The province is in talks with Toyota, which already has booming operations in Cambridge, Ont., and is in talks this year on where to construct a new assembly plant in North America.
“It’s no secret that we’re sending a signal out to the world, far and wide, we want to do business,” he said. “We’re talking to Toyota and many others.”
To that end, Ontario set up a $500 million auto sector investment fund last year to improve the province’s attractiveness to automakers.
The GM announcement and the province’s commitment on the auto industry file was well received by the Canadian Auto Workers (CAW).
“This announcement puts Canada back on the map for global automotive investment,” said CAW economist Jim Stanford. “I’m hoping that it’s just the beginning and there’s more to come, not just from General Motors, but from the other companies who play a role in this industry.”
GM’s investment will result in major upgrades of the automaker’s assembly operations in the province and establish new auto research and training centers.
“In today’s economy, the best jobs go to the best workers and we want our workforce to be prepared to manage every generation of innovation,” said Joe Cordiano, the province’s minister of economic development and trade.
Those 500 jobs will be created in the southern Ontario communities of Ingersoll, Oshawa and St. Catharines – which isn’t that large of a number given the size of the investment. By comparison, DaimlerChrysler is adding double that amount by adding a third shift this spring at its Brampton, Ont., sedan plant.
Still, the GM deal secures current manufacturing work in the province by the world’s largest automaker and “will help Canada remain at the forefront of the automotive sector and secures the future of the site and related employment for years to come,” said Joe Volpe, federal minister of citizenship and immigration.
“All Canadians depend on a thriving auto industry. All Canadians depend on the industries that are associated with it,” said Volpe, who attended the event on behalf of Industry Minister David Emerson.
GM confirmed that its Plant 1 in Oshawa will build the 2006 Chevrolet Impala and Monte Carlo mid-sized cars. GM will also invest in flexible manufacturing at its Plant 2 in Oshawa and build a new paint shop in the city.
“This $2.5-billion investment demonstrates GM’s strong commitment to Canada’s automobile industry,” said Michael Grimaldi, president of GM Canada.
GM will spend $557 million at its CAMI plant in Ingersoll, where the new 2006 Pontiac Torrent compact SUV will be built. The investment will create 400 new jobs.
The automaker will also spend $23 million on its powertrain plant in St. Catharines, where it will build a new V-8 engine to reduce fuel consumption and set new environmental standards.
The Beacon Project will establish an automotive “center of excellence” at the University of Ontario Institute of Technology, in Oshawa. It is designed to improve links between auto suppliers, universities, researchers and students in auto engineering, design and innovation.
In addition, Hamilton’s McMaster University will establish a center for corrosion engineering research and a center for engineering design. The university will also receive a $60 million in-kind contribution for design and analysis tools and software from GM.
Other post-secondary institutions across Canada will take part in an automotive innovation network as part of the project.
GM is the second automaker to benefit from new funding allocations by Ontario and Ottawa for auto sector investments.
Last fall, Ford Canada announced a $1-billion expansion of its Oakville, Ont., plant that had the backing of $100 million each from both the province and the federal government.
Copyright 2005 Canadian Press, 2005. All Rights Reserved.
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