General Motors of Canada Ltd. has confirmed it is cutting 1,200 jobs at an Ontario truck plant next January, a move the Canadian Auto Workers Union says shows the effect of slumping U.S. housing and credit markets on the already struggling auto industry.
GM Canada spokesman Stew Low said the layoffs were part of the company's plan to keep its inventory in line with production and offset some of the value that was lost as a result of incentive plans.
"The Oshawa plant is the only one that's currently running on three shifts ...," Low said. "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."
The layoffs, he added, were "brand new," permanent and effective Jan. 1, 2008.
CAW president Buzz Hargrove said he was "shocked" to learn from GM the automaker planned to cut a shift producing Chevrolet Silverado and GMC Sierra pickup trucks in Oshawa during one of the union's regular meetings with the company in Detroit on Wednesday.
The move, he said, will reduce output from the plant to two shifts from three for the first time in more than a decade.
GM cited high inventory as the main reason for the reductions.
The cuts are another blow for auto workers, who have had to contend with plant closings in Windsor, Ontario, earlier this year, as well as a move by Chrysler to wipe out 2,000 unionized jobs at its operations in Ontario and the permanent shutdown of dozens of auto parts plants in Ontario that supplied Detroit's Big Three.
In 2005, GM had announced plans to cut more than 3,600 jobs in Ontario by 2008, as it worked to close nine North American plants and eliminate 30,000 jobs over three years, most in the United States.
North American automakers have been squeezed for years by declining demand for their cars and trucks and intense competition from Toyota, Honda and other Japanese car makers, who have taken a growing share of the Canadian and U.S. marketplace.
The U.S. market is the destination for about 85 percent of the trucks assembled at the Oshawa plant, which employs more than 3,000 workers.