The federal government may be able to use a multimillion-dollar green vehicle fund to entice General Motors to continue manufacturing cars at a plant slated for closing next year, according to the finance minister.

Jim Flaherty suggested Wednesday the Conservative government could put up money from its $250-million automotive innovation fund, meant to assist in the development of environmentally friendly and fuel-efficient vehicles, to help keep the Oshawa, Ont., pickup truck factory alive.

Flaherty said he hopes to use federal money to encourage production of another car to replace the trucks that will no longer be manufactured at the plant.

"I've already spoken with General Motors about that," said Flaherty.

"We're going to stay on that as a federal government, and if we can participate in funding that innovation, then we're certainly going to be there. The key is to work with the union, work with the company to see what's necessary in terms of technological innovation."

General Motors announced Tuesday it is planning to halt production at the Oshawa plant, which produces the Chevrolet Silverado and the GMC Sierra, sometime in 2009, axing around 2,600 jobs in the process. Three other plants across North America, including two in the U.S. and one in Mexico, are also due to be closed.

The Canadian Auto Workers union has promised an all-out fight against what it called an "illegal" betrayal, establishing a road blockade outside GM's Canadian headquarters in Oshawa on Wednesday. The blockade was still up on Thursday after angry employees and union activists spent the night outside.

CAW leaders are scheduled to hold a one-hour meeting with GM officials in Detroit Friday morning in a bid to convince them to reverse their decision to close the plant. The meeting will include top-level GM executives, along with senior members of the CAW.

"Decision-makers will be in that room," union president Buzz Hargrove said.

Local 222 president Chris Buckley said GM had promised the Oshawa plant would be employed to work on the next generation of light-duty pickup trucks as part of an agreement reached with the union in May. The agreement with GM also postponed a 900-worker layoff at the plant until September 2009.

Must replace trucks

Buckley said Wednesday that if the company refuses to manufacture pickup trucks at the plant, it must replace them with another vehicle in order to keep workers on the job.

GM, however, has said it does not plan to allocate any new products to the four plants slated for closing.

Meanwhile, the Ontario government has said it will try to recover some of the $175-million loan it provided GM earlier than scheduled if the company violates minimum job levels outlined in their agreement.

Premier Dalton McGuinty expressed sympathy Wednesday for GM's workers in Oshawa, who have said the closing will be devastating.

"This is their livelihood," McGuinty said. "There aren't that many things that are more important than that. It's their ability to feed their families and build a bright future for themselves."

With files from the Canadian Press