Automaker Invests Over $700 Million to Save Plant from Closure

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Researched by Industrial Info Resources (Sugar Land, Texas). In the initial flood of news of plant closings by General Motors Corporation (NYSE:GM) (Detroit, Michigan) and the Ford Motor Company (NYSE:F) (Dearborn, Michigan), GM announced in late 2005 that it would close its Oshawa #2 assembly plant at the sprawling 700-acre site in 2008, resulting in a direct loss of 3,900 jobs. Oshawa is the hub of GM's Canadian operations and one of the main manufacturing centers in an Ontario industry that nearly equals Michigan's in terms of auto production. Plant #1 currently manufactures the Chevrolet Impala and Monte Carlo and the #2 plant builds the Pontiac Grand Prix and the Buick Allure and LaCrosse models. The Chevrolet Silverado and GMC Sierra are built at GM’s truck plant located in Oshawa also. Plants #1 & #2 produce 526,000 vehicles per year and the truck assembly plant produces almost 314,700 trucks per year.

In July of 2006, Industrial Info learned that GM was looking to consolidate production of Zeta-based vehicles, which include the Chevrolet Impala, Cadillac DTS & Buick Lucerne as well as the, at the time, Camaro concept. The possible sources of the Zeta-based vehicles were GM’s plants located in Oshawa, Ontario and Wilmington, Delaware. In mid-August, GM announced that it had chosen the Oshawa plant as the location where the Zeta-based vehicles would be assembled.

The 7.4 million square-foot plant will now have at least one new vehicle rolling off of the assembly line in late 2008, the Chevy Camaro. The Camaro is expected to be the first of several rear-wheel-drive vehicles to be built in Oshawa by GM. The plant will be able to build rear-wheel, front-wheel and all-wheel-drive vehicles on the same line. The car assembly plant will be converted from a two-plant complex into one flexible manufacturing plant. GM will invest $740 million to do this with approximately $500 million being spent on the “plant consolidation” and the remaining $240 million invested in the tooling necessary to begin production of the Camaro. A 300,000 square-foot addition will be constructed to the south side of the body shop as part of the project. Roncelli, Incorporated (Sterling Heights, Michigan) is the general contractor for this project. Once complete in late 2007-early 2008, the plant’s production capacity will slightly decrease from its current 525,875 units to 505,000 units per year. General Motors expects to begin production of the Camaro at the end of 2008.

GM chose the Oshawa plant because of its strong relationships with the Canadian Auto Workers and federal, provincial and local governments. The Oshawa #1 plant was also named the Second Most Productive Assembly Plant in North America by Harbour Consulting. GM built the original Camaro between 1967 and 2002 near Montreal in Boisbriand, Quebec. The Ste-Therese plant has been torn down and the land is being turned into the Faubourg de Boisbriand shopping center.

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