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Workers at the General Motors Oshawa assembly plant in August, 2013. Chrysler Canada Inc. has raced in front of GM in vehicle production and stands about 18,000 vehicles ahead in output through the end of August after outpacing GM in July and August.Moe Doiron/The Globe and Mail

General Motors of Canada Ltd., is poised to lose its title as the largest producer of vehicles in Canada this year amid fears about the future of its assembly plants in Oshawa, Ont., beyond 2016.

Chrysler Canada Inc. has raced in front of GM in vehicle production and stands about 18,000 vehicles ahead in output through the end of August after outpacing GM in July and August.

GM has been the largest auto producer in Canada since 1987 and there were just a handful of years when another auto maker topped the charts in data going back to 1960. The Oshawa-based auto maker was also the annual sales leader with few exceptions during those years until losing that title in 2010.

So far this year through the end of August, two assembly plants in Oshawa and GM's Cami Automotive Inc. factory in Ingersoll, Ont., have produced 370,491 vehicles. Chrysler's plants in Windsor and Brampton have turned out 388,208.

The numbers hint at a troubling scenario looming later in the decade as parts suppliers, politicians and union leaders grow increasingly worried about the future of GM's Oshawa complex, which in some years during the past two decades cranked out more than 900,000 vehicles a year.

When the federal and Ontario governments contributed $10.8-billion to the bailout of General Motors Co. in 2009, the auto maker agreed that its Canadian plants would produce 16 per cent of its North American-built vehicles through 2016.

GM has so far surpassed that threshold – 17.7 per cent in the first half of 2014, compared with 19.4 per cent a year earlier – but output is scheduled to begin falling next year when assembly of the Chevrolet Camaro is shifted from the flex plant in Oshawa to a plant in Lansing, Mich. The flex plant has been shut a few weeks this year because of slow sales.

The neighbouring consolidated plant is scheduled to close in 2016, which will mean the end of production of the Chevrolet Impala Limited sedan and the Chevrolet Equinox crossover utility vehicle. The other vehicles assembled in the flex plant, the Buick Regal, Cadillac XTS and a newer version of the Impala, are scheduled to be shifted to other plants or replaced by vehicles built in U.S. or Mexican plants, industry sources and analysts have said.

"All GM products built in Canada are already built elsewhere or planned to be built elsewhere," said Joe McCabe, president of automotive consulting firm AutoForecast Solutions LLC of Chester Springs, Penn. "They have capacity at other plants that could absorb the production volumes."

The firm's forecast shows no new or replacement vehicles scheduled to be assembled in Oshawa.

Jerry Dias, president of Unifor, which represents about 3,800 workers at the two Oshawa plants, said he has been assured by GM officials several times that he should not be worried about the future of the plants.

"I'm worried as hell," Mr. Dias said Wednesday. "That's why it's going to be the most important issue in 2016 bargaining. I can take [GM's] comments at face value, but we went through bargaining with GM in 2008 and then shortly afterward they announced the closing of the [Oshawa] truck plant."

GM Canada spokeswoman Adria MacKenzie said the auto maker has nothing to announce about future production allocation for Oshawa, although she noted the vehicles built in the flex plant will be built "based on market demand, for the foreseeable future."

Industry analyst Adam Jonas, who follows GM for Morgan Stanley, said in a note to clients he expects GM's U.S. market share to fall by almost two percentage points between 2013 and 2020.

Ontario NDP Leader Andrea Horwath said Wednesday that the Ontario government needs to stay involved in any discussions about the future of GM and the auto sector as a whole.

"It's very, very clear you can't simply say, 'We're not going to participate in any way as a government in attracting that investment' because we know that other jurisdictions are doing exactly that," Ms. Horwath said.

With files from Adrian Morrow

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