The Canadian unit of a Mexico-based company will ship engine blocks to China in a small example of the reversal of the trend of automotive investment bypassing Canada.
Nemak of Canada Corp. will spend about $15-million, aided by a $1.5-million boost from an Ontario government economic development fund, to create 80 jobs over the next four years.
The plant in Windsor, Ont., will assemble aluminum engine blocks that will be shipped to a General Motors Co. affiliate in China.
The investment will increase employment in the plant to about 290 people.
The Nemak investment is the second announcement of new jobs being created in Canada's auto parts sector in a week, following the announcement by Linamar Corp. of Guelph, Ont., last Monday that it will create 1,200 jobs over the next 10 years.
The government's Southwestern Ontario Development Fund is providing the financing to support the investment by Nemak Canada, which is a unit of Tenedora Nemak SA de CV.
"We didn't have to drop our wages to $10 an hour," said Kevin Laframboise, plant chairman of Unifor Local 200, which represents about 210 hourly workers at the plant.
Wages range between $21 and $28 an hour, Mr. Laframboise said.
Instead of reducing wages, unionized employees agreed to change work rules to make them more flexible and work with management to solve problems, he said.
"Ontario is committed to creating strategic partnerships to attract jobs, increase investment and contribute to Ontario's economic growth," Brad Duguid, the province's Minister of Economic Development, said in a statement.
Glen Byczynski, Nemak Canada's technical manager, said the company "is forging a partnership within China's growing automotive industry."
Employment in auto parts rose 5.2 per cent as of the end of October, 2014, from figures one year earlier. However, the number of jobs in auto parts has fallen by almost 33,000 since the peak of 100,931 jobs in 2001. In 2007, before the recession hit, auto parts makers employed 87,417 Canadians.