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GM confirms 1,200 jobs to be cut at Ontario plant.

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General Motors of Canada Ltd. has confirmed that it is cutting 1,200 jobs this January at a truck plant in Oshawa due to slumping pickup sales.

The company will axe one shift of production of the Chevrolet Silverado and GMC Sierra pickup trucks.

GM Canada spokesman Stew Low said the layoffs were part of the company's plan to keep its inventory in line with production.

"The Oshawa plant is the only one that's currently running on three shifts, and given that we want to tightly control inventories to market demand and we want to ensure that all plants are running at or near 100 per cent capacity, that's the rationale behind removing the third shift at Oshawa,'' Low told The Canadian Press Thursday.

"It's part of an overall plan. It's something that, frankly, we don't take lightly -- we don't really want to do -- but it's the right way to run the business.''

Low said the layoffs are permanent and will be effective as of Jan. 1, 2008.

Sales of the GMC Sierra dropped nearly 28 per cent in July, while Chevrolet Silverado sales dropped 26 per cent.

The reduction, from three shifts down to only two, is the first cut to output since the early 1990s.

The declining sales are being blamed in part on the U.S. housing slump.

"The U.S. auto sector has been slowing down all year and part of that is the credit crunch in the United States and the housing crisis," automotive analyst Dennis DesRosier told CTV's Canada AM Thursday.

About 85 per cent of the trucks assembled at the Oshawa plant, which employs more than 3,000 workers, are sent to the U.S. market.

GM, Ford Motor Co. and Chrysler LLC, all rely on supplying construction trade workers with vehicles as a major source of profit.

Ripple effect

The GM cuts are also expected to have a ripple effect on businesses that supply the plant.

"When the vehicle assembly plants go down, the real jobs are in the parts facilities, said DesRosier.

He said the 1,200 jobs to be cut at GM could eventually result in as many as 4,000 jobs lost.

"The parts jobs aren't necessarily in Canada but nonetheless it's just a harbinger of very difficult times for automotive," said DesRosier.

Oshawa Mayor John Gray remained optimistic about the economic health of the region, saying the area has been through hard times before.

"We've been down this road before. The community is always resilient and we'll bounce back," Gray told CTV Newsnet on Thursday.

Gray said Oshawa has been quietly working to diversify its economic base through regionalized health care and the opening of a new university in the area.

"One can never downplay the effects the automotive industry has and of course the high-paying jobs, you can't just go out and replace them right away. But, there is some good news on the horizon for Oshawa," Gray said.


Canadian Auto Workers president Buzz Hargrove said he was "shocked" by the news, which he heard Wednesday in a meeting with GM officials.

"This is horrible news for our members, our families, Oshawa and Durham region," Hargrove told CTV Newsnet on Thursday.

Hargrove said Prime Minister Stephen Harper has refused to meet with him to help work on the issue.

"Our problem is the level of imports that are coming in from Asia... from countries that refuse to allow us to build here and sell there," said Hargrove. "They have 25 per cent of our market."

CAW is planning to meet with GM officials and is vowing to keep up the pressure on both levels of government to find a solution.

"I think that GM, Ford and Chrysler are going to continue to downsize, they're all going to be smaller if our government doesn't wake up,'' Hargrove told CP.

"It's frustrating as hell as we just watch it go down and down and we have no strategy to respond to it.''

GM is already restructuring two car plants next to the Oshawa truck plant.

One of those plants is expected to close as the company builds a single, state-of-the-art facility that will be capable of building as many as 500,000 vehicles.

Last year, GM confirmed that the Camaro will be built at the new plant but the Canadian Auto Workers union is pushing for more vehicles to be added.

In February, Chrysler announced they were chopping 13,000 jobs across North America, including 2,000 in Southern Ontario, as part of a strategy to cut the struggling automaker's costs.


The comments are pretty bad, so maybe some of our members can give GM a helping hand in setting the record straight.

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Well, this is not good news aside from the fact that they are at least using the brains they have to keep inventories in check!

Still a sad state of affairs that spells out the descrepancy that we face with the Global competition and the lack of tarriffs on those foreign products here. It should be even: If Japan poses a tarriff on all imported goods to protect the home markets, the same exact tarriff should be imposed on them here on completed cars and parts coming into the US. Until this happens, this will continue to be the story we hear told. If Japan Truly wants to play in the world market, they need to treat other countries as they seem to want to be treated.

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I saw an article in the news about this- the US market for the GM/Chevy trucks is going stale. Maybe the imports (YES, "imports"- they aren't domestic to ME) like Toyota etc are taking an unwanted bite out of the piece of the pie, who knows....?

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