General Motors of Canada Ltd. will begin producing a new, fuel-efficient transmission at a plant in St. Catharines, Ont., in 2012, the auto maker will announce Tuesday, another in a string of investments it has made since its parent company emerged from Chapter 11 bankruptcy protection last year.
The latest announcement is a $245-million plan to build six-speed transmissions to supply assembly plants in Oshawa, Ont., and Ingersoll, Ont., both of which have already boosted or plan to increase vehicle production amid a market recovery and heavy demand for the company’s Chevrolet Equinox and GMC Terrain crossover utility vehicles.
GM has scheduled a news conference at the St. Catharines plant Tuesday morning that will be attended by company president Kevin Williams, federal Industry Minister Tony Clement and Canadian Auto Workers president Ken Lewenza.
The move follows GM’s announcement in April that its St. Catharines engine plant will assemble the next generation of the company’s V8 engines at a new flexible assembly line. That investment will amount to $235-million.
The transmission announcement comes one year after General Motors Corp. plunged into Chapter 11 bankruptcy protection in the United States, but emerged six weeks later, backstopped in part by $10.5-billion in financial help from the federal and Ontario governments.
It comes about one month after the company said the St. Catharines engine plant had been awarded the next generation of V8 engine production and a $235-million investment to build a flexible assembly line.
In return for the government assistance, GM reconfirmed last year the transmission investment for St. Catharines, which was first announced in September, 2008, on the eve of the last federal election.
The transmission work will secure about 400 jobs at GM’s St. Catharines operations, which consists of an engine plant and a parts-making operation.
The transmission work was promised by GM in September, 2008, as part of a deal with the federal and Ontario governments to avoid early repayment of support from the two governments originally promised as part of the auto maker’s 2005 Beacon project, which included investments in Oshawa and Ingersoll.
The two governments provided more than $400-million to GM for the Beacon project, but a decision earlier in 2008 to close the Oshawa Truck plant meant the auto maker was no longer meeting employment targets set out in that agreement.
In return for the transmission project, a commitment to produce a hybrid car at the Oshawa car plant and increase research and development in Oshawa, the governments agreed not to claw back money from GM.
