GM Canada bailout money yielding slow ROIWritten by Mike Edwards Wednesday, 29 August 2012 09:49
The federal and Ontario governments invested a total of $10.5 billion in GM Canada in 2009, on the one hand, as the automaker struggled to survive the economic downturn.
On the other hand, Toyota's Canadian manufacturing arm says it's investing $100 million in its Cambridge, ON, plant -- without government handouts -- a move that will see it hire 400 workers.
The investment will increase the production of the company's Lexus RX models, from 30,000 vehicles to 104,000 at the southwestern Ontario facility.
Toyota Motor Manufacturing Canada Inc. says the investment includes 15,000 RX450h vehicles, the hybrid electric version of the Lexus, and will take its annual production capacity in Canada to 500,000 units.
In Canada, meanwhile, GM has shut down a truck plant in Oshawa and a transmission plant in Windsor, ON, and cut its workforce by 5,000 during the restructuring. Another 1,500 jobs in Oshawa will be lost in June 2013.
All of these losses mean that local suppliers taking the brunt of GM’s decision making.
But the new R&D commitment should ameliorate the situation.
GM says the investment in R&D at the Canadian Engineering Centre will make the facility an integral part of its global engineering and R&D networks.
The money will also go toward enhancing partnerships with automotive suppliers, including “new co-development projects and greater opportunities for start-ups to access funding through GM Ventures.”
GM said it would also focus on further developing technology relationships with Canadian universities, institutes, suppliers and manufacturers.
Prime Minister Stephen Harper says the money represents “exciting future implications” with ripple effects that will be felt “far and wide.”
“We did what was necessary to support and stabilize Canada's economy,'' Harper said.
The Oshawa plant builds many GM models -- from the Impala and Camaro to the Chevrolet Equinox and Buick Regal -- and employs more than 4,500 people.
Last August, the company announced a $117 million investment at the assembly plant to prepare it to build the new Cadillac XTS.
GM Canada employs about 10,000 people at its Ontario-based operations. The company operates assembly plants in Oshawa and Ingersoll and parts plants in St. Catharines.
Editorial Director: Ryerson Polytechnical Institute electronic engineering technologist with over a decade of manufacturing experience and 20-plus years in technical publishing, is also trained in hydraulics, electro-pneumatics, bearings, mechanical CAD software, sensors, motor drives and electric motors.Website: www.dpncanada.com
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