TORONTO - In the latest blow to the country's struggling auto industry, General Motors said Monday it will close its transmission plant in Windsor, Ont., by mid-2010 in a move that will affect 1,400 people.
GM said Monday the closure will occur when current production mandates expire for the four-speed automatic transmissions produced at the plant.
"Despite efforts and discussions with GM's labour and government partners, the company has determined that its North American market outlook and product plans, including the shift from four-speed to more fuel-efficient six-speed transmissions, do not offer replacement products for the Windsor plant in the 2010 time frame," the largest North American automaker said in a statement.
"Accordingly the plant will close in the second quarter of 2010."
The move is the latest in a series of closures in the auto sector in Canada as the high loonie and loss of market share to Asian automakers have crippled the auto manufacturing industry, centred in Ontario.
The rapid change comes as the Detroit Three auto companies - General Motors, Ford and Chrysler - continue to lose market share to Japanese rivals in North America and cut tens of thousands of jobs in response.
Rising gasoline prices have also squeezed demand for bigger SUVs and pickup trucks, vehicles on which the North American companies had focused their business in recent years, essentially surrendering the small-car market to rivals.
GM announced earlier this month it was slashing 900 jobs at a truck assembly plant in Oshawa, Ont., because of falling demand due to soaring fuel prices - an announcement that came on the heels of a slowdown at the plant in January, when GM announced it would cut a shift and 1,000 jobs.
"It's always a big deal when you close a plant, it's not something that we like to do, (but) it's based what product is available for this plant and there just isn't any," said GM spokesman Stew Low.
He said the workers will have the right to go to other GM plants "if there are openings and if we needed the people" but it was much to early to provide specifics.
While GM, Ford and Chrysler have been shutting Ontario parts plants and curtailing assembly output, non-unionized carmakers Toyota and Honda have been expanding their assembly operations in central and southwestern Ontario, aiming to cash in on the market share gains in the United States.
Buzz Hargrove, president of the Canadian Auto Workers union, said he's frustrated and angry over the planned GM closure, but would continue bargaining with GM until at least Wednesday.
Hargrove says the union is trying to negotiate buyouts for the affected workers, many of which are close to retirement.
"We could end up setting aside bargaining Wednesday," Hargrove told a news conference in Toronto. "We may have to strike over getting a close-out agreement, not product".
But he said the CAW still wants new product in GM's St. Catharines, Ont., plant, which will be impacted by the Windsor closure."
Lack of new product at St. Catharines, he added, will still be a strike issue.
The CAW also began early barganing talks with Chrysler on Monday after negotiating a new contract with Ford Canada.
Earlier this month, Hargrove said GM wouldn't get a settlement "unless we can solve the product allocations problem at all three locations," Oshawa, Windsor and St. Catharines.
But Low said he didn't expect the Windsor closure to affect the ongoing negotiations.
"We all know what we have to do in bargaining, and we'll continue on work towards the deadline that the union has set up for Wednesday at six."
The CAW said it has been in labour negotiations with GM since Thursday on the Windsor plant, where GM announced last year that a new transmission would not be produced.
The union typically reaches an agreement with one of the North American automakers and then uses that deal as a framework for deals with the other two automakers where it has collective agreements.
It has already completed a deal with Ford Canada, affecting nearly 9,000 employees.
Premier Dalton McGuinty told the Ontario legislature he spent "some of my weekend devoted to this bad news," trying to persuade GM officials in the U.S. to keep the Windsor plant open.
"I spoke with (GM Canada president) Arturo (Elias) and I spoke to Buzz Hargrove and I asked if there was anything at all that we might do here in Ontario to stave off this job loss and the elimination of this product," he said.
"To make a long story short, the answer came back No."
GM Canada president Arturo Elias said the automaker has "worked extensively with our labour and government partners but have been led to the unavoidable conclusion that there are no available replacement products in the relevant time frame for this location."
Ontario Finance Minister Dwight Duncan, who represents the riding of Windsor-Tecumseh, said his government has been talking with GM and the Canadian Auto Workers about a new "product mandate" for the affected plant.
"We need a federal partner as well," he said. "Mr. Flaherty's continually turned his back on the automotive sector. The most recent example is the Ford Essex engine plant in Windsor, where because of our investment, will be seeing new jobs."
Built in 1963, the Windsor plant builds front-wheel-drive transmissions shipped to plants in the United States and Mexico for use in medium-sized and compact GM vehicles including the Chevrolet Malibu and Cobalt, Pontiac G5 and G6, and Saturn Vue and Aura.
Ontario NDP leader Howard Hampton complained about the closure, saying it shows the Liberals had failed at securing jobs.
"General Motors gets over $250 million of Ontario taxpayers money and then tells over 1200 manufacturing workers in Windsor: 'See ya. We're not going to reinvest in you, we're not going to reinvest in Windsor, we're not going to reinvest in Ontario,"' Hampton said.
"Is this your idea of a successful strategy to maintain manufacturing jobs?"