Ontario's beleaguered auto industry suffered another major blow Monday when General Motors announced it would close its transmission plant in Windsor, Ont., within two years. The plant employs 1,400 salaried and hourly workers.

GM said the closure was due to a market shift from the four-speed automatic transmissions made in Windsor to more fuel-efficient six-speed transmissions.

"We have worked extensively with our labour and government partners but have been led to the unavoidable conclusion that there are no available replacement products in the relevant timeframe for this location," said GM Canada president Arturo Elias in a statement.

GM Canada spokesperson Stew Low said the high Canadian dollar and higher labour costs in Canada also played a role.

"Certainly new investment in Canada is challenging," he said. "Certain business cases here are challenging."

The Windsor plant was built in 1963. It exports front-wheel-drive transmissions to the United States and Mexico.

"This came as an incredible shock to us," Canadian Auto Workers president Buzz Hargrove told a conference call. He called the announcement "devastating news" for the workers and the people of Windsor.

Hargrove also said the effects of the closure would ripple far beyond the 1,400 who work at the Windsor plant as support industries lose work. He said some jobs will likely be lost at GM facilities in St. Catharines, Ont., because of their dependence on Windsor.

GM and CAW in talks

The CAW has been in national contract talks with GM since last Thursday as the union tries to work out a new master agreement. Hargrove said GM told the union on Friday about its plans for the Windsor plant.

The union went into the talks seeking commitments from GM for new work and investment at the company's Ontario facilities.

"We could end up setting aside bargaining Wednesday," Hargrove said. "We may have to strike over getting a close-out agreement, not product."

The closure of the transmission plant will leave Windsor with no GM plant for the first time in 45 years.

This closure announcement is the second major GM cutback affecting Canada in the last two weeks. Late last month, the company said it would cut one of the two shifts at its Oshawa, Ont., pickup plant, citing slower sales in the U.S. Almost 1,000 workers were affected by that announcement. The Oshawa cuts take effect in September.

The Big Three automakers have cuts tens of thousands of jobs in the last few years as they struggle to turn around their struggling operations amid market gains by their Asian-based rivals.

North American automakers were slower to adjust their product lineups to include more smaller vehicles and fewer gas-guzzling SUVs.

(With files from the Associated Press)