General Motors Canada will take $10.5 billion in aid from the federal and Ontario governments and pump some of that money back into operations, boosting research and development and launching five new vehicles, including a popular hybrid gasoline-electric car.
The aid is part of the parent company’s bankruptcy restructuring filing yesterday, and will be used to maintain 16 per cent of GM’s North American manufacturing output into the future.
“In recent months there’s been a lot of anxiety around the kitchen tables of families working in the auto sector, whether those moms and dads work in assembly plants, parts manufacturing, dealerships or any of the over 400,000 jobs dependent on the making of cars and trucks in Ontario,” Premier Dalton McGuinty told a news conference in Toronto.
“We’re here today to put GM on a sound footing, to build a base for growth and prosperity in Canada and to give all those families reason to be hopeful.”
McGuinty agreed GM would have quickly moved its production out of Canada if the Canadian governments did not agree to participate in the bailout. This in turn would have affected hundreds of Canadian parts suppliers and the other auto manufacturers that rely on them.
GM has promised to maintain the Canadian proportion of its North American manufacturing capacity at 16 per cent. According to an analysis by AutomotiveCompass LLC, that’s down from 22 per cent in 2007.
GM Canada will spend $2.2 billion on capital and $1 billion on research and development between now and 2016 and its three remaining plants — in Oshawa, St. Catharines and a joint-venture plant with Japanese carmaker Suzuki in Ingersoll — will see a host of new products.
