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  • GM, Canadian Auto Workers Reach Deal for Future Product

GM, Canadian Auto Workers Reach Deal for Future Product

Canadian Plants Could See Truck, Engine Production Return from Mexico

Sep 20, 2016
At one time an automotive manufacturing powerhouse, Canada is no longer the favored industrial base it once was, with the United States and Mexico receiving the lion’s share of manufacturing investment among the Detroit Three since 2009. High labor costs and an unfavorable exchange rate have been a double whammy against Canada’s auto sector. However, auto manufacturing remains an important part of Canada’s industrial base and workforce, and retaining those jobs is critical to ensuring the industry’s future. Against that backdrop, General Motors entered into negotiations with Unifor, the labor union representing Canada’s auto workers. Prior to the negotiations, the future for GM’s manufacturing operations faced an uncertain future in Canada. The outcome of the negotiations ensures product through at least 2019.
The Oshawa plant, the current source for the Cadillac XTS, Chevrolet Impala, Buick Regal, and some Chevrolet Equinox production, is scheduled to close one of its passenger-car lines. The most likely models to be dropped from the line are the Cadillac XTS, which has been effectively replaced by the new CT6, and the Chevrolet Impala, which is also built in Michigan and has seen a softening of demand over the last few years, as has the fullsize sedan segment in general. Replacing those models could be either fullsize trucks or possibly the Buick Envision midsize crossover, which would also circumvent the somewhat sensitive issue of the current Envision being sourced exclusively from China. The terms of the deal also detailed some engine production moving from Mexico to GM’s St. Catherines, Ontario, plant. The likely engine is the Vortec 6000 V-8 used in GM’s HD trucks, which is currently sourced from Silao, Mexico.
We reported earlier that GM was considering moving production of its 1500 crew cab trucks from Mexico to Flint, Michigan, which currently builds the HD trucks and some 1500 models. This could see production of the slightly lower-volume HD models go to Canada.
Source: Bloomberg