General Motors announced Monday that it will build the redesigned Chevrolet Camaro in Oshawa, Ont., a move that will save thousands of Canadian jobs.

The new Camaro is scheduled to roll off the line in 2008, the same year that the No. 2 Oshawa car plant was slated to close.

GM's Camaro concept vehicle was unveiled at the North American International Auto Show in Detroit in January.
(Carlos Osorio/Associated Press)

The move will save 2,700 jobs in Oshawa.

GM officials said the preparatory work at the plant would begin immediately, with a total investment of $740 million.

In November 2005, General Motors announced that the No. 2 plant in Oshawa would close in 2008 because of overcapacity in the market. At the time, the plant produced the Pontiac Grand Prix and the Buick LaCrosse/Allure models. Those models won't be made after 2008. 

GM three-month trading

But the plant also won independent praise for the quality of the cars it built. In June, J. D. Power and Associates said GM's Oshawa No. 2 plant won its gold plant quality award for the second consecutive year, meaning it produced vehicles with the fewest defects among car and truck plants in North and South America.

The Camaro announcement comes after the Canadian Auto Workers union agreed to 2,500 early retirements to reduce the operating costs in Oshawa.

CAW president Buzz Hargrove said the investment in the plant "ensures the long-term future of this complex for the people in it."

GM confirmed earlier in August that it would go ahead with a new version of the Camaro after an attention-grabbing debut of a Camaro concept car at the Detroit International Auto Show in January. 

GM discontinued production of the Camaro in 2002, which left 1,000 workers at a plant in Ste-Therese, Que., out of work.

Muscle car field getting more crowded

GM, which sold almost five million Camaros from 1967 until it pulled the model, has become only the latest in a string of North American automakers to relaunch a classic muscle car.

Ford announced two weeks earlier that it would restart production of the Ford Shelby GT, a high-powered version of its Mustang.

And DaimlerChrysler announced in July it would relaunch the Dodge Challenger in 2008.

GM hopes to sell about 100,000 Camaros a year. It said its new version will be more fuel-efficient than the 1960s version. 

General Motors is hoping to turn around a steady erosion of market share that has seen North American consumers increasingly turning to Japanese brands like Toyota and Honda.

GM lost $8.6 billion US in 2005 but has since embarked on an extensive restructuring and cost-cutting campaign that has included offering buyouts worth up to $140,000 US to thousands of its workers.

With files from the Canadian Press