General Motors Co. has cast a dark cloud over 3,700 high-paying manufacturing jobs and the future of its Oshawa, Ont., operations, saying it will shift production of the Chevrolet Camaro to a plant in Michigan.
The move, announced abruptly Wednesday, raised fears among union leaders and industry analysts that vehicle production could cease in Canada's Motor City, which was once one of the brightest jewels in General Motor's crown.
"Unless Oshawa gets a new product to replace this one, the future for Oshawa looks very bleak," said industry analyst Bill Pochiluk, president of AutomotiveCompass LLC.
The next generation of the sports car is scheduled to be produced at an assembly plant in Lansing, Mich., beginning in October, 2015.
GM's Oshawa operations, which employed 23,000 people as recently as the 1980s, have been a crucial engine of the Ontario and national economies for decades and the source of tens of thousands of spinoff jobs in the region east of Toronto and elsewhere in Canada's manufacturing heartland.
The announcement sparked strong criticism from the federal and Ontario governments, which warned that GM will be held to commitments it made when Canadian taxpayers contributed $10.6-billion to a bailout of the auto maker in 2009.
Federal Industry Minister Christian Paradis issued a statement reminding GM of the bailout and the promises it made in 2009 that Canada would produce 16 per cent of the company's vehicles in North America through 2016.
"We are concerned about the implications of this announcement on the men and women whose livelihoods depend on General Motors," Mr. Paradis said. "It is up to General Motors to provide Canadians with an explanation for their decision today and I expect them to do so."
Premier Dalton McGuinty telephoned Kevin Williams, the president of GM's Canadian operations, on Wednesday to express his concern and ask about the impact on workers at the plant.
Mr. McGuinty reminded Mr. Williams that his government supported GM "even when it was a public challenge to do so," according to a government source. Mr. McGuinty also told him that GM and the government have a "shared commitment" to strengthen Ontario's economy.
Ontario Economic Development Minister Brad Duguid noted the taxpayers' contribution to the rescue and how an earlier $435-million contribution helped GM build the flexible assembly line in Oshawa.
"Given our partnership with GM, we expected a greater level of commitment to Ontario and to Ontario auto workers," Mr. Duguid said in a statement, adding that he will hold the company to promises it made in 2009 in return for the Canadian governments' bailout money.
During negotiations on a new contract this summer, GM officials provided no hint that Oshawa was in danger of losing the Camaro, Canadian Auto Workers president Ken Lewenza said Wednesday.
The 100,000 Camaro models assembled annually represent about one-quarter of the output of two assembly lines in Oshawa. Eliminating that number of vehicles likely means wiping out a shift of production at the plant, he said.
"A fully utilized plant today is on three shifts," he said. "If this 100,000 units drops it to two shifts – which I anticipate it does – without any replacement vehicles, then the next move is one shift and [then] gone."
The Camaro was the first car to be assembled on the flex line, which began operations in 2008 after the CAW agreed to special provisions that cut hourly labour costs and the federal and Ontario governments made their contribution.
At the 2006 news conference on that investment, Premier McGuinty and other dignitaries were chauffeured into the Oshawa plant in vintage Camaro models.
Mr. Lewenza said the decision to shift Camaro production represents a betrayal of the Canadian taxpayers' rescue of GM.
Apart from the potential job cuts at GM, suppliers whose only business is to supply parts for the Camaro will be forced to shut down, Mr. Lewenza and other union officials said. They pointed to a Johnson Controls Inc. plant in Whitby, Ont., which makes seats for the Camaro, as being particularly vulnerable.
In addition, a GM engine and transmission plant in St. Catharines, Ont., supplies V6 and V8 engines for the car, so the ripples from the decision will expand beyond the Oshawa region.
GM Canada spokeswoman Faye Roberts said any assessment of how the decision might affect jobs is speculation.
Ms. Roberts said the decision was based on a "comprehensive business case" that includes consolidating rear-wheel-drive car production in Lansing – except for the Chevrolet Corvette, which will continue to be made in Bowling Green, Ky.
With files from reporters Steven Chase in Ottawa and Karen Howlett in Toronto.