Business / Auto Global

GM to spend $243m on Canada's CAMI assembly plant

(Agencies) Updated: 2013-03-11 14:16

General Motors Co is spending C$250 million ($243.46 million) to retrofit its CAMI Automotive Inc assembly plant in Ingersoll, Ontario, for future vehicle production, the company said on Friday.

The facility currently produces the popular crossover utility models Chevrolet Equinox and the GMC Terrain.

CAMI is currently running at full capacity and has had difficulty meeting demand, and has been shipping some vehicles to GM's Oshawa, Ontario facilities to finish assembly.

"It really does signify the fact that they are confident that the current strength that we're seeing, especially in the United States, will continue for some time," said Carlos Gomes, an auto analyst at Scotiabank, noting that production at the plant increased by 5 percent in January versus a year ago.

This is part of the $1.5 billion GM said it will invest in its North American plants this year and part of the $8 billion the Detroit automaker has said it will annually put into its worldwide operations.

The crossover utilities are now the largest segment in the US market, outselling traditional medium sized cars. In Canada, the category is close to overtaking the small car segment as well, said Gomes.

"This investment will prepare the plant for future vehicle production and will give CAMI the ability to build a higher variety of differentiated products, on multiple platforms," GM spokeswoman Adria MacKenzie said in an email.

She did not say what kind of models the conversion will be able to accommodate.

MacKenzie said it was too early to say if the investment will result in new jobs, while the Canadian Autoworkers Union said it was confident the investment in infrastructure would result in more job security.

"When you make that investment, it is a message of security for the future," said CAW national president Ken Lewenza, but added, "I don't see it as a huge job creator."

There are just over 2,500 union members in Ingersoll.

Nearly three months ago, GM announced it would move production for the next generation Chevrolet Camaro to Lansing, Michigan, from its current home in Oshawa, a fresh setback for the 4,000 unionized workers at GM's Oshawa operation, where employment has dwindled over the last decade.

GM said construction will start in coming weeks, with completion expected in the fourth quarter of 2014.

The Canadian auto industry exports more than 80 percent of its vehicles to the US market, with crossover vehicles making up some 40 percent of overall Canadian production. 

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