General Motors Canada on Monday said its restructuring plan would move “faster and deeper” along similar lines to that outlined for the US today.
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“GM Canada continues to work closely with the Canadian and Ontario governments and expects to soon complete a short-term bridge loan agreement that will provide additional flexibility as the company works with all its stakeholders to complete its restructuring,” it said in a statement.
The federal and Ontario provincial governments require GM Canada to provide an updated restructuring plan by 30 May to be eligible for taxpayer-funded assistance.
GM Canada said it would “complete the significant capacity changes already announced and being implemented in Canada”, including the closure of the Oshawa truck plant scheduled for 14 May, closure of the Windsor transmission plant in 2010 and completion of the St. Catharines competitive operational agreement with the Canadian Auto Workers union.
Despite the ongoing capacity cuts, the remaining Canadian plants will launch the new Chevrolet Camaro, redesigned Equinox and new GMC Terrain this year.
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By GlobalDataThe Canadian reached a new agreement with the CAW on 11 March and said today it expects “further discussion with the CAW concerning the provisions of the new CAW-Chrysler agreement in the days ahead”.
“The achievement of these competitive labour costs together with capacity reductions will enable GMCL’s active hourly labour costs to drop by 50% from US$1bn in 2008 to US$500m by 2010 and remain at the $500 million level into 2014 primarily due to the elimination of most cost inflators (as bargained in the 11 March agreement),” the automaker said.
GM’s hourly workforce reduction will be accelerated and is now expected to go from 10,300 in 2008 to 4,400 in 2014. It will review overall employment levels with government as part of its overall restructuring plan.
As GM moves to four core brands in the US, GMCL “will follow the same plan of accelerated nameplate reduction as outlined for the US”. There are detail variations between the model lines offered in the two countries and some models have different names.
GM Canada said it would reduce its dealer network from 705 dealers in 2009 to 395-425 at the end of 2010, a 42% cut consistent with the US.
Its market assumptions call for a projected 18.4% market share this year and a range of 16-17% market share in 2010 through 2014 “as we move to a more profitable balance of sales in Canada and a higher dealer throughput resulting in more financially solid dealers”.
