The plan by General Motors Co. to perform final assembly of full-sized pickup trucks in Oshawa, Ont., will lead to production of about 60,000 vehicles at the assembly plant in that city, the auto maker has confirmed.
"We have implemented what we call the Oshawa Shuttle," chief executive officer Mary Barra told an investor conference last week.
The plan is build the frames for the pickups in the body shop at the Fort Wayne, Ind., truck assembly plant, then ship them to Oshawa for painting and final assembly.
That "gives us the opportunity to create about – or to build about 60,000 more trucks next year," Ms. Barra said.
It's the first time she has publicly outlined the plan, which was part of a labour contract the auto maker signed last year with Unifor, the union that represents hourly paid workers at GM's two assembly plants in Ontario and an engine and transmission making facility in St. Catharines, Ont.
The auto maker made a similar move several years ago to boost production of its Chevrolet Equinox crossover, shipping unfinished vehicle structures – known in the industry as body-in-white – to Oshawa for final assembly at the consolidated plant, one of two GM assembly plants in the city.
That program has ended and the consolidated plant has closed. The pickups will be shipped to the neighbouring flex plant in Oshawa, where there is capacity to build more vehicles because production of the Chevrolet Camaro and Buick Regal has been shifted elsewhere in recent years.
GM has not publicly announced its plans but has issued some information, including a comment by General Motors of Canada Co. president Stephen Carlisle earlier this year that Oshawa would assemble pickup trucks. At the time, he refused to identify what model.
The Indiana plant assembles the Chevrolet Silverado and GMC Sierra full-sized pickups.
Assembly is expected to begin in January, industry sources have said. That's in the midst of talks on renegotiating the North American free-trade agreement, which includes two automotive demands by the United States that Canada and Mexico have rejected – 85-per-cent North American content and 50-per-cent U.S. content in vehicles assembled in Canada and Mexico and shipped to the U.S. market.
Those demands have sparked fears that the ultimate aim of the Americans is to terminate the deal.
If the deal is terminated, the three NAFTA partners will face the question of what tariff regime applies.
If there is no deal between Canada and the United States to continue the Canada-U.S. free-trade agreement that was superseded by NAFTA, tariffs on pickup trucks assembled in Canada and Mexico will revert to a 25-per-cent levy known as the chicken tax imposed by the United States in the early 1960s during an agriculture trade war with Europe.
A forthcoming report by the C.D. Howe Institute says pickup-truck assembly will be shifted out of Mexico to the United States if the 25-per-cent tariff is placed on the Mexican-made vehicles.
GM Canada has refused to comment on the potential of the tariff being applied to pickups assembled in Canada.