The General Motors truck plant in Oshawa, Ont., will be closed by the end of next year, the car manufacturer announced Tuesday, in yet another blow to the country's automotive industry.
Production at the Oshawa plant and three other North American factories will be shut down next year in response to "a clear shift from trucks and SUVs toward cars and crossovers" among North American buyers.
All of the plants slated for closure assemble pick-up trucks or sport utility vehicles.
GM chairman and chief executive officer Rick Wagoner made the announcement Tuesday morning. He didn't say how many jobs would be affected, but the Oshawa plant employs more than 2,500 people.
"Recent developments on the global oil scene have forced us to take additional actions," Wagoner said.
He noted that higher gasoline prices represent "a structural change, not just a cyclical change."
"It is, by and large, permanent," he added.
Wagoner said it is unlikely the four plants will be reopened, and no new products have been slated for production in lieu of the trucks and SUVs.
GM's shift in direction will see the company add more small, fuel-efficient vehicles to its roster. It also has plans to have the Chevrolet Volt -- a plug-in electric car -- in dealers' showrooms by the end of 2010.
The cuts announced on Tuesday should save GM $1 billion a year, Wagoner said, in addition to earlier cuts worth roughly $15 billion.
The news follows a new three-year agreement reached in mid-May with the Canadian Auto Workers.
CAW President Buzz Hargrove said GM is now breaking that agreement.
Speaking at a news conference, Hargrove said GM had committed to ongoing production of pick-ups in Oshawa through the life of the new collective agreement.
"No intelligent human being would ever agree there's been such a change in two weeks that somehow General Motors would have to back away from a commitment," Hargrove said, vowing the CAW would fight the closure.
"It just angers me, the fact that General Motors is manipulating even the announcement when they're saying there are only 1,000 jobs. There are 2,600 people working in that plant today. It affects 2,600 workers directly, it affects their families."
Chris Buckley, president of the Canadian Auto Workers local at the Oshawa plant, said he was shocked by the news, and said workers have been "betrayed."
"Can you imagine how our members today feel that at tenant ratification meetings on May 16, that didn't think they had a job before they went to ratification meetings, ratified the agreement in great numbers, great percentages, and today have been told by General Motors, 'You don't have a job in 2009,'" Buckley told reporters.
"That's absolutely disgraceful on behalf of the General Motors Corporation."
The union leaders have not ruled out job action in wake of the announcement. A document being circulated at the Oshawa plant, and obtained by CTV News, reads, ""They must be held accountable for their actions and we will be pursuing whatever means we have at our disposal to get the injustice corrected."
Workers said they were dumbfounded after being told of GM's announcement on Tuesday.
"You have guys with 20 years, 23 years, 24 years who might lose their jobs," said one worker. "We've been told all this time how our quality is so good here and the next thing you know they shut us down."
"The younger generation, there are going to be no jobs," said another employee. "The government won't step up and do anything. They import vehicles, we can't export. We've lived up to our end of the agreements for three contracts, and they just keep putting us down every time."
Oshawa Mayor John Gray says a plant closure will hurt the local economy and impact many families.
"When you have something like this, you can only shake your head and understand there will be a lot of hurt with families," Gray said.
Oshawa plant to get new vehicle
On the same day of the plant closure announcement, CTV News has confirmed GM will bring a new fuel-efficient vehicle into production at the Oshawa flex plant.
The car will be front-wheel drive and production will begin in about three years, at about the same time the plant will stop producing the Chevrolet Impala, CTV Toronto's Paul Bliss reported.
GM Canada vice-president David Paterson confirmed to CTV News the new product is coming to the flex plant.
Without the replacement product, some 1,200 jobs could have been lost, Bliss said.
Meanwhile, Premier Dalton McGuinty said Tuesday the government will try to recoup part of a $175-million loan to General Motors earlier than planned in the wake of the automaker's decision to close plants.
McGuinty said the loss of jobs likely means GM will be in violation of one of the conditions of the loan guarantee.
"Our sense is at this point that they will be, and if so, there are specific provisions under the contract that we will seek to enforce,'' he said.
The province invested $235 million with GM's Beacon project in 2005, $60 million of which went to universities for research and development and the balance to GM for its Oshawa operation.
The agreement included minimum job levels at the truck plant, the premier said.
The government won't be able to determine exactly how much it will expect GM to pay back until 2013, when the long-term contract is completed, officials said.
GM, however, argued it is not in violation of the agreement.
"This announcement alone does not tip us over or violate the covenant,'' said GM vice-president Troy Clarke. "Whatever the fact of the matter is, we will live up to our obligations under the Beacon agreement.''
With reports from CTV Toronto's Galit Solomon, Dana Levenson and Paul Bliss and files from The Canadian Press
