Car News

GM Announces No Product Allocation to Oshawa Assembly in 2019

Rumours have been circulating since late yesterday afternoon that General Motors would be announcing the closure of its Oshawa assembly plant. Now, it looks to be official.

GM announced earlier today that it would be "unallocating" three North American assembly plants including Oshawa Assembly, Detroit-Hamtramck, and Lordstown, Ohio. That means that they haven't assigned them any product to build after next year. The announcement doesn't officially say that they will be closing, but a plant without a product isn't likely to stay open.

It's part of cost-cutting efforts targeted to slash US $4.5 billion per year from the company's bottom line and free up US $6 billion in free cash flow.

GM says the Oshawa plant has been "building world class vehicles" since 1953. It's one of the most flexible plants the company operates, shown by GM's recent decision to move production of the old-generation Silverado and Sierra to the plant during model transition, and a similar move with the Chevrolet Equinox in 2010. The plant's other current vehicles include the Chevrolet Impala and Cadillac XTS: both slow-selling sedans, as the market moves to crossovers and trucks.

In 2009, the federal and Ontario governments bailed out GM (and Chrysler) as part of a bankruptcy and restructuring related to the global financial crisis and recession. A report from the Auditor General in 2014 showed that GM received approximately $10.8 billion in loans and stock purchases from the government. Once the last of the federal government's shares was sold in early 2015, the branches of government had approximately $2.8 billion they weren't able to recover, said final government accounting records, according to a 2015 report by the Canadian Taxpayer Federation lobby group.

GM Canada also operates a facility in Ingersoll, ON, that assembles the Chevrolet Equinox and a plant in St. Catharines, ON, that builds V6 and V8 engines as well as automatic gearboxes.