GM to invest $68M at Oshawa plant for new Impala

General Motors confirms it will build some of the next generation of its Chevy Impala line of cars at its assembly plant in Oshawa, Ont.

350 jobs saved from nearly 2,500 slated for elimination

Employees assemble Chevrolet Impalas at GM's assembly plant in Oshawa, Ont. (J.P. Moczulski/Reuters)

General Motors confirmed on Friday that it will build some of the next generation of its Chevy Impala line of cars at its assembly plant in Oshawa, Ont.

The plant will get $68 million in investment and will secure 350 jobs, Canadian Finance Minister Jim Flaherty said at the announcement, though overall GM is slashing positions in Oshawa as it shuts down an assembly line. 

"These are important developments for the future of this community. They are important developments for this country," Flaherty said. "This important announcement marks an important step in GM's recovery and its continued contribution to Canada economic growth and jobs." 

The news from GM caps off half a year of machinations with its union, the Canadian Auto Workers. 

The union says its collective agreement with GM obliges the auto maker to produce Impalas in Oshawa, where it has assembled different versions of the model since 1959.

But the auto maker announced in May that it was adding 2,500 jobs and investing $69 million US to upgrade its Detroit-Hamtramck plant to build the latest Impala, without any mention of the Ontario factory. That prompted a flood of media reports that production of the sedan was moving out of Oshawa.

The CAW said the tactic was meant to instill fear in workers ahead of next year's negotiations toward a new collective agreement.

Instead, GM will "double-tool" the car at both plants.

Massive job losses

Overall, GM's Oshawa operation is still set to lose more than 2,000 jobs as the company eliminates its so-called consolidated production line by 2013. That's on top of the 2,600 jobs lost in 2009 when GM shuttered its truck plant in Oshawa, and the closure last year of its lone remaining production plant in Windsor, Ont., where the company once employed 7,000.

GM had a Canadian workforce of 20,000 people as recently as 2005, but that number is dwindling to fewer than 5,000 as it tries to streamline operations in the wake of its bankruptcy filing two years ago.

The company received $61.5 billion in bailout money from the U.S., Canadian and Ontario governments in 2009 as it went through bankruptcy protection, with politicians saying it was important to protect manufacturing jobs.

"I'm pleased that the when GM's future was on the line and the jobs here were on the line, that the people of Canada stepped up to the plate," Flaherty said Friday.

Most of that amount was converted to equity before General Motors relisted on the New York and Toronto stock exchanges last year. But at the shares' current price, Ottawa and Queen's Park are out $4.2 billion on their investment and would need the stock to rise to about 2½ times its current value to break even.