One of Canada's most productive auto assembly plants is getting a $250-million boost that likely solidifies about 3,000 jobs well into the 2020s.
General Motors Co. will invest that amount at its Cami Automotive factory in Ingersoll, Ont., to make its body shop flexible, which will allow the auto maker to respond more quickly to changing consumer tastes by building vehicles off more than one platform or basic underbody.
The investment removes a threat hanging over the plant, which despite producing the second-highest number of vehicles among GM's North American factories last year, was competing against facilities in Spring Hill, Tenn., and Mexico to build the next generation of the Chevrolet Equinox and GMC Terrain crossovers that are built in Ingersoll now.
The announcement means GM has anointed Cami to build those vehicles beginning in 2015 off what the company calls its Delta platform, although the company will also build some Delta-based vehicles at two plants in Mexico, industry sources said Friday.
"The next Delta's going there and it's expected to be a strong vehicle," said industry analyst Bill Pochiluk, chief executive officer of AutomotiveCompass LLC.
Fears had been raised that GM would shift production of the vehicles to Spring Hill when it announced it was reopening a former Saturn plant there that was shut during the company's trip through U.S. Chapter 11 bankruptcy protection in 2009.
The Tennessee plant is building some Equinox models, but demand for that vehicle and the Terrain is so strong that Cami has been running on three shifts plus overtime, and unfinished bodies are being shipped to another GM plant in Oshawa, Ont., for completion.
The $250-million investment should provide job security for at least six years and possibly as many as 10, said Mike van Boekel, chairman of the Cami unit of Canadian Auto Workers local 88. "We've got much better job stability," Mr. van Boekel said.
Redesigns of existing vehicles typically lead to eight years of production at an assembly plant.
GM Canada did not identify any vehicles in the announcement, which comes in the midst of negotiations with the CAW on a new contract for about 2,400 unionized workers at the plant. The union agreed to open its contract seven months before its scheduled expiry this September at the request of the company.
The next step GM should make is to invest in a plant in Oshawa, Ont., that is scheduled to close in 2014, said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc.
"GM needs the [production] capacity," he said, as vehicle sales in North America continue to recover to pre-recession levels. "They need to put a major investment in Oshawa."
Workers at the Ingersoll plant cranked out 305,415 Equinox and Terrain models last year, a tally surpassed only by production at a pickup-truck plant in Fort Wayne, Ind.
"Manufacturing flexibility is a key priority for General Motors and this investment will give Cami the ability to build a higher variety of differentiated products on multiple platforms at much lower costs," GM Canada said in a statement.
Equinox is the second-best-selling vehicle in the GM lineup in the U.S. market, the destination for about 80 per cent of the vehicles assembled in the plant. Sales rose 20 per cent in that market in the first two months of the year, to 37,872 from 32,513.
Equinox is also an important vehicle in the GM Canada lineup, although sales of the model fell 25 per cent in the first two months of the year in Canada.