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TORONTO — General Motors of Canada Ltd. is seeking a fresh infusion of government funding for new projects in Ontario, even as it slashes 2,300 jobs at two other operations in the province.
GM is planning to invest about $700-million in its engine plant in St. Catharines, where it will make a six-speed, rear-wheel drive transmission, and in new projects at its research and development centre in Oshawa. The company is asking the federal and Ontario governments to kick in about 20 per cent of the total cost of the projects, David Paterson, vice-president of corporate and environmental affairs for GM Canada, confirmed yesterday.
"That is a level that is consistent with the competitive amount of incentive support that is generally seen in North America," he said in an interview.
Government support equalling 20 per cent would amount to $140-million. But GM is asking for further aid at a time when the Ontario government is coming under fire for grants it has already given to the company, only to see it slash thousands of jobs.
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GM said this week it will shut its transmission plant in Windsor in 2010, putting 1,400 people out of work in the battered motor city. The announcement was made two weeks after GM said it will eliminate one shift at a plant in Oshawa that assembles pickup trucks, wiping out 900 jobs.
The job cuts would not deter the Ontario government from handing out more money to GM, because it wants the company to do more business here, Sandra Pupatello, Minister of Economic Development and Trade, said yesterday.
"We would look at them and say, 'GM has been a great employer in Ontario. The more business they do here, the more we get a chance to show their headquarters this is where they should be doing more business,' " she said.
The company has been the single biggest beneficiary of the McGuinty government's auto-sector fund. Of the $500-million earmarked for the sector, GM received $235-million in 2005 for its $2.5-billion Beacon project. It also received $200-million in federal funding for that project, which includes plans to transform its two Oshawa car plants into one flexible manufacturing facility, invest in its Cami Automotive Inc. joint venture in Ingersoll and begin several research and development programs.
Premier Dalton McGuinty has been on the defensive all week for not extracting more stringent job guarantees from auto makers in return for funding that led to $7-billion in investments.
"The more money this government invests in a company, it seems the more jobs are lost," Progressive Conservative MPP Bob Runciman said.
New Democratic Leader Howard Hampton said the Detroit Three auto makers have collectively announced 10,000 job cuts since 2004, when the McGuinty government introduced its auto fund.
"If you are going to hand out hundreds of millions of dollars, you have to get job guarantees," he said.
Mr. McGuinty said the province's auto companies would be in much worse shape if his government had not "planted our flag" in the sector.
"We've had some bad news," he told reporters yesterday. "But I want you to imagine where we would be if we had not obtained that $7-billion of new investment."
Mr. Paterson said GM has made a number of investments since the Beacon project, including $500-million in its Oshawa truck plant last year, without any government help.
With a report from Rhéal Séguin in Quebec City
