General Motors Canada denied reports Wednesday that it may reduce production at its Canadian plants as it rolls out new car models in the coming years.

An Oshawa General Motors worker arrives for his shift. The automaker maintains it will maintain 16 per cent of the company's North American vehicle assembly capacity in Canada. (Nathan Denette/Canadian Press)

The automaker was reacting to reports that despite plans to build a new version of the Chevrolet Impala at its Oshawa, Ont., assembly complex, it will reduce production to below 400,000 units — down from earlier projections of 500,000.

In a note to its members, the Automotive Parts Manufacturers' Association hinted that slowdown was planned, but GM has called the report "inaccurate," insisting it has no plans to reduce Canadian production.

GM's Canadian production was roughly 350,000 units in 2009 — 250,000 in Oshawa and 100,000 at its CAMI plant in southwestern Ontario, with most units shipped to the United States.

"Going forward, we will fully comply with our commitment to the Ontario and federal governments that we will maintain 16 per cent of GM's North American vehicle assembly capacity in Canada," the company said.

"In fact, we recently confirmed that the Buick Regal will be built in Oshawa starting in the first quarter of 2011 and we have also committed to two additional models for Oshawa."

Union expects job gains

Far from a slowdown, the Canadian Auto Workers union said Wednesday it estimates that GM's new models could mean as many as 1,000 new jobs in Oshawa.

"I think eventually that everyone that is on layoff will be back," union representative Keith Osborne said. "With the launch of vehicles, the prospects for late 2010, early 2011, we can partially anticipate that the majority if not all [laid off workers] will be back to work."

The company did not comment on the potential for more hiring Wednesday, but did note that it is running its CAMI plant in Ingersoll, Ont., on three shifts and full overtime to keep up with demand for the Terrain and Equinox models.

Late last year, GM acquired full control of that plant, buying out its Japanese partner, Suzuki, ending a joint venture set up in the late 1980s.

On Tuesday, December auto sales figures showed that four of the five biggest automakers saw substantial Canadian sales declines last year, with General Motors taking the biggest hit with a 29.1 per cent drop.

However, GM clung to its top spot in terms of market share in 2009, selling 17.2 per cent of vehicles bought in Canada. Ford was second with 15.4 per cent, followed by Toyota with 13 per cent, Chrysler with 11.1 per cent and Honda with 8.4 per cent.

The face of the North American auto industry has been changing for years, but the pace of that change accelerated dramatically over the last 18 months when the financial crisis and global recession hit.

'Everyone that is on layoff will be back.'—Keith Osborne, CAW spokesman

Many of the world's biggest automakers suffered from a steep reduction in sales as a result of tight credit conditions for consumers and dealers as well as a general economic slowdown that clamped a lid on new auto sales in North America and around the world.

GM Canada pared back its Canadian operations to deal with the new market reality, cutting a truck plant in Oshawa, with the loss of about 2,600 jobs. The company also plans to shut down a transmission plant in the southwestern Ontario city of Windsor, affecting another 1,400 jobs.

GM and Chrysler both filed for U.S. bankruptcy protection last spring, and managed to survive with tens of billions of dollars in U.S., Canadian and Ontario government loans. The governments of Canada and Ontario currently own roughly 12 per cent of the automaker.

With files from The Canadian Press