GM Plans to Cut 1,000 Jobs at Oshawa, Ontario Truck Plant

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Researched by Industrial Info Resources (Sugar Land, Texas) -- General Motors of Canada, subsidiary of General Motors Corporation (NYSE:GM ) (Detroit, Michigan), announced it would be cutting 1,000 jobs at its Oshawa, Ontario Canada truck plant by January 2008. Coming on the heels of GM’s announcement last week of production cuts at a half dozen truck and SUV assembly plants across North America, these job cuts are just another sign of continued distress within the American automotive industry.

GM will be dropping its third shift at the plant that currently employs over 3,000 and assembles the Chevrolet Silverado and GMC Sierra pick-up truck. This will be the first reduction in shifts at the plant since the early 1990’s. Oshawa was also one of the plants, at which production was going to be cut by year’s end, begging the question of what is in store for the additional five plants affected by the production cut announcement of last week.

Citing higher gas prices, tougher competition and a weak housing market, GM has been forced to make these drastic cuts to production and their workforce at their large pick-up and SUV production facilities in the last 10 days. Sales of both the Silverado and the Sierra had dropped in July by 26% and 28% respectively.

GM is currently heavily involved in negotiations with the UAW (United Auto Workers) union on a new contract and the effect of these two recent announcements on those negotiations is yet to be known. The current union contract expires in September of this year for all three American automakers.

In addition, the affect of these announcements is yet to be known when it comes to GM’s current capital plants across North America. GM has close to $5 billion worth of capital and maintenance project work either under construction or in the planning stages for construction in the near future. It remains to be seen if the planned retools and expansions that GM has been discussing will come to fruition or if they will be shelved in the coming months. GM is still in the midst of their reorganization plan that includes the closure of several of their production plants across the continent.

It has been no secret that the American automotive landscape has been changing and evolving for the last several years. For the first time in history the foreign automakers managed to take over 50% of the North American market share in recent months. Chrysler LLC (Auburn Hills, Michigan) has recently been sold off and is in the process of re-inventing itself while Ford Motors Corporation (NYSE:F ) (Dearborn, Michigan) has been in the process of closing several of its plants much like GM. At the same time, the foreign automakers are investing billions of dollars in grassroot assembly plants in Canada, Mexico and the United States. The next 12 months will be very telling for an American automotive industry that has had to undergo severe changes not only in management, in Chrysler’s case, but in corporate philosophy.

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