GM to Build Camaro in Michigan, Shift Model Out of Canada

General Motors Co. (GM) said it will build the next-generation Chevrolet Camaro at a Michigan factory and shift the model out of an Ontario plant.

GM said the sports car will be assembled at the Lansing Grand River factory because of “lower capital investment and improved production efficiencies,” according to a statement on Detroit-based GM’s website. The company said it will “continue to meet the production targets” it agreed to when receiving financial aid from the Canadian and Ontario governments in 2009.

The Canadian Auto Workers, in a separate e-mailed statement, said the move “will cut between one third and one quarter” of production in late 2015 or early 2016 at an Oshawa, Ontario, factory that now builds the Camaro. The Toronto-based union said it’s urging GM to replace the Oshawa production “on a one-to-one basis, ensuring that no jobs are lost.”

GM reached a new four-year labor agreement with the CAW in September. That accord was to create, maintain or extend a total of 1,750 jobs and calls for GM to invest C$675 million ($684 million) in its Canadian plants, the union said at a Sept. 20 news conference.

GM notified union leaders of the transfer by telephone at 11 a.m. Eastern time, CAW President Ken Lewenza said.

“Their explanation for us is they are consolidating their rear-wheel drive vehicles under one facility,” Lewenza told a news conference in Oshawa today. “They believe that will be important for suppliers and others to have that continuity around a facility. We rejected that, because this local union beginning in 2006 made significant sacrifices to win the Camaro work.”

Job Losses

During this year’s labor negotiations, GM never discussed the possibility that the Camaro would no longer be built in Oshawa, Chris Buckley, president of CAW Local 222, said at the press conference. GM employs about 4,000 people in the city, down from about 23,000 in 1983, he said.

“General Motors has been extremely misleading, and that’s what we find offensive,” Buckley said.

GM, in an e-mailed statement, said the decision “is based on a comprehensive business case. Lower capital investment and improved production efficiencies were key factors in the business case.”

At least 1,000 union members who work at GM will probably lose their jobs if the transfer takes place, in addition to some GM supplier employees, Buckley said. GM builds about 100,000 Camaros in Oshawa annually, Lewenza said.

‘Assault on Canada’

“This decision by General Motors today quite frankly is a betrayal to Canada as a nation, to the Canadian taxpayers and to workers that need these jobs,” Lewenza said. “We are outraged. This is an assault on Canada.”

Canada and Ontario provided a combined C$13.7 billion to the rescues of GM and Chrysler Group LLC and retained ownership stakes in both companies to protect an estimated 52,000 jobs, according to the country’s 2012 budget plan.

CAW leaders will respond to the planned transfer “in a very aggressive way” at the start of 2013, Lewenza said without being more specific.

Lewenza said he talked to Prime Minister Stephen Harper’s chief of staff and Ontario Premier Dalton McGuinty to voice his opposition to the automaker’s plan and enlist their support in making GM reverse its decision. Lewenza said he asked Harper’s chief of staff to have the prime minister “speak up for Canadian jobs.”

Canada is “concerned about the implications” of the announcement and will hold GM to its Canadian production commitments, Julie Vaux, a spokeswoman for Harper, said in an e- mailed statement.

Finance Minister

Separately, Canadian Finance Minister Jim Flaherty said today his government doesn’t intend to be a long-term shareholder in GM. The government hasn’t decided when it will sell its GM shares and won’t hold a ‘‘fire sale” of its holdings, Flaherty told reporters today in Burlington, Ontario.

“We will not sell the shares without getting the best value we can for Canadian taxpayers,” Flaherty said. “We are a Conservative government, we are not interested in the long term in being shareholders in private corporations.”

Flaherty said he spoke today with GM Chief Executive Officer Dan Akerson, and discussions have taken place regarding Canada’s shareholdings with the U.S. Treasury Department and the company. He didn’t elaborate on the talks.

Flaherty said in a separate interview with CTV Television that he isn’t aware of Ontario job losses resulting from the move.

GM said today it will purchase $5.5 billion of its stock from the U.S. Treasury and that the U.S. plans to sell its entire holding in the automaker within 15 months.

The Canadian and Ontario governments together hold about 140 million, or about 9 percent, of outstanding common shares of GM, according to data compiled by Bloomberg. Canada is the third-largest shareholder in GM, behind the U.S. Treasury, which holds 32 percent, and the GM-UAW Voluntary Employee Beneficiary Association with 10 percent.

To contact the reporters on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net; Bill Koenig in Southfield, Michigan, at wkoenig@bloomberg.net

To contact the editors responsible for this story: Frederic Tomesco at tomesco@bloomberg.net; Jamie Butters at jbutters@bloomberg.net

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