MONTREAL / WASHINGTON (Reuters) – General Motors Co. ( GM.N ) will make a big announcement on Monday that will…
MONTREAL / WASHINGTON (Reuters) – General Motors Co. ( GM.N ) will make a big announcement on Monday that will affect its global business and threaten to turn off a major car assembly facility in Ontario , said a Canadian union on Sunday.
PHILOTOOTH: A series of cars are seen on a road after a change of exchange at General Motors car assembly facility in Oshawa on June 1
, 2012. REUTERS / Mark Blinch
Unifor, representing most unionized car drivers in Canada, said it had been informed by GM that there would be no product assigned to the Oshawa plant after December 2019, a development that would affect production at the factory.
The declaration came after a Canadian television news channel said GM was planning to close all operations at Oshawa, near Toronto.
A GM spokesman refused to comment on Sunday night.
GM has cut jobs to handle car sales in North America. The company has internally debated in months how to deal with decreasing demand for cars, a person who has been informed about the issue and the issue is sure to return when GM has contract negotiations next year with United Auto Workers Union.
GM is expected to announce as soon as week any involuntary payroll deductions after there were not so many volunteers to accept buyouts that were hoping, the person said.
GM said on October 31 that about 18,000 of its 50,000 North American officials are entitled to buyouts.
The increased cost savings and restructuring at GM, so many industry leaders and analysts predict that total US vehicle sales will decrease further in 2019 and 2020.
At the same time, China has the world’s largest auto market and GM’s largest market with car sales, has declined sharply in recent months.
Analysts have said that GM has too many North American plants to build long-selling sedans.
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GM shares are lowered 12 percent for the year and GM boss Mary Barra, in a message to employees last month, quoted the stagnant stock price as a reason for harder restructuring measures.
She said that automaker had a negative cash flow for the first nine months of the year and needed to cut costs.
GM has offered buyouts to North American officials and has said that it could put on officials if it does not hit a cost-saving goal.
The person informed about the matter confirmed that GM was planning an important message about the future of the Oshawa factory, but said that the automaker would notify its employees of their plans before leaving any announcements about the factory.
The total vehicle production at the Oshawa complex fell 60 percent in the first ten months of 2018 from the same period a year ago, according to data from Automotive News.
GM employs about 2,500 professionals in Oshawa, producing both Chevrolet Impala and Cadillac XTS sedans. It also complements the final assembly of the stronger sellers Silverado and Sierra pickup trucks shipped from Indiana.
Political pressure in Canada is already mounted on GM, which had accepted billions of dollars in support of governments in the US, Canada and Ontario after applying for bankruptcy protection during the global economic downturn in 2009.
“We are aware of the reports and we will work the next few days to determine how we can continue to support our car sector and workers, “said a Canadian government official.
“Many families work on the line,” said Colin Carrie, a member of the Oshawa Parliament. “The community across Ontario would be destroyed if this plant were to be shut down.
The United States based machine has other operations in Canada, including a facility in Ingersoll, Ontario, where it fits Chevrolet Equinox.
The notified plant closure is a Further blow to the Canadian automotive industry, who have lost jobs to the United States, where governments offer manufacturers rich incentives and Mexico, where labor costs are lower.
However, a new trade agreement concluded by the United States, Mexico and Canada in September leaves significant room for Canadian plants grow free of charge without customs.
Reporting by Allison Lampert in Montreal and David Shepherdson in Washington DC. Further reporting by David Ljunggren in Ottawa and Joseph White in Detroit; Writing by Denny Thomas; Editing Peter Cooney
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