Ministers to push General Motors for renewed Canadian investment

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The federal and Ontario cabinet ministers who oversee the auto industry in Canada will meet with General Motors Co. chief executive officer Mary Barra in Detroit on Wednesday to press the case for new investment by the auto maker at its operations in Oshawa, Ont.

Federal Industry Minister James Moore and Ontario Economic Development Minister Brad Duguid will meet with Ms. Barra in part to discuss what the future holds for GM's Oshawa assembly plants. One plant is scheduled to close next year and industry sources say no new products have been allocated to the other factory, which puts its future in jeopardy later this decade.

"We've been there for them in tough times, we expect them to be there for Canada," Mr. Moore said in an interview at the North American International Auto Show in Detroit.

"We want to work with them to make sure that they see Canada as a continuing attractive place to do business and we hope that they will recognize that there's some expectation of reciprocity," Mr. Moore said. "Canadian taxpayers, Oshawa taxpayers, the government of Ontario, the government of Canada were all there for GM."

Mr. Duguid, who met with General Motors of Canada Ltd. president Stephen Carlisle Tuesday, said there are several reasons why GM should reinvest in Oshawa.

"The Oshawa plant has been an award-planning plant, so the quality is there," he said.

"They have a work force that is second to none, we have the lowest effective corporate tax rates, we're fast becoming a hub of innovation in [information technology] which, at the Detroit auto show you can see is so important for technology and connected vehicles."

Concerns have arisen about the future of Oshawa in part because a commitment GM made to produce 16 per cent of its North American-made vehicles in Canada expires next year. That commitment was made in return for a $10.8-billion contribution by the federal and Ontario governments to the bailout of GM when it went into Chapter 11 bankruptcy protection in 2009.

The two governments were given shares in the new GM that emerged from bankruptcy protection and they still hold about 7 per cent.

In addition to the scheduled closing of the Oshawa consolidated factory next year – a closing that has been delayed several times – GM plans to shift production of the Chevrolet Camaro out of the neighbouring flexible plant this year.

Industry sources said assembly of Buick Regal and Cadillac XTS models is scheduled to end at the flexible plant, as is output of the Chevrolet Impala.

Jerry Dias, president of Unifor, which represents about 3,600 workers at the two Oshawa factories, has been pushing for a separate meeting with Ms. Barra that is now scheduled to take place next month.

"We're entitled to some straight answers," Mr. Dias said Tuesday.

The two cabinet ministers were in Detroit to tour the auto show and to meet with senior executives from the auto makers that manufacture vehicles in Canada.

New automotive investment has been flooding into Mexico and the U.S. South in recent years, bypassing Canada.

So it's crucial that the country retain existing assembly plants, Mr. Moore said.

The auto sector is "huge in consequence; Ontario is one-third of Canada's population, but it's more than 40 per cent of Canada's economy, the backbone of it is manufacturing and the auto sector is the backbone of manufacturing."

He pointed to low taxes, new free-trade agreements the federal government has signed, and targeted government programs such as the Automotive Innovation Fund as factors that should encourage GM and other auto makers to continue to invest in Canada.

Ms. Barra said on a conference call with reporters last week that she sees opportunities to continue to build vehicles in Canada, but did not make a commitment that the company would continue to do so.