General Motors of Canada Limited

General Motors of Canada Limited

April 27, 2009 10:30 ET

GM Canada Further Improves its Operating Plans

OSHAWA, ONTARIO--(Marketwire - April 27, 2009) - General Motors of Canada Limited (GMCL) today provided further information concerning its improved Canadian operating plans as it continues to advance its Restructuring Plans in Canada. The updates follow from the enhanced US "Viability Plan" and bond exchange offer issued earlier today by General Motors Corporation. GM's updated plans will speed the reinvention of the Company's operations into a more customer-focused, leaner, and more cost-competitive automaker.

GM Canada President Arturo Elias said, "Many of the operational changes announced earlier today by General Motors in the United States will also enhance the viability of our highly integrated Canadian operations as we complete our discussions with the Ontario and Federal governments on GM Canada's restructuring plans."

GM Canada continues to work closely with the Canadian and Ontario Governments and expects to soon complete a short-term bridge loan agreement that will provide additional flexibility as the Company works with all its stakeholders to complete its restructuring. GM Canada's restructuring plans and requirements all remain subject to discussion with, and direction from, the Federal and Ontario Governments following their recent requirement that GM Canada provide an updated restructuring plan by May 30, 2009 to be eligible for government financial assistance.

GM Canada's plans to move faster and deeper on its restructuring plans include the following:

Production

GM Canada will complete the significant capacity changes already announced and being implemented in Canada, including the closure of the Oshawa Truck Plant scheduled for May 14, 2009; closure of the Windsor Transmission Plant in 2010; and completion of the St. Catharines Competitive Operational Agreement with the CAW (including the November 2005 announcement regarding the closure of the Ontario Street building).

Despite the capacity reductions in Canada as part of the North American restructuring, GM Canada remains a critical manufacturing location for GM Corporation. In 2009, GM Canada will launch 3 of 6 new GM products in North America between the Oshawa Car and the CAMI facility. These launches from Canadian plants include the all-new Chevrolet Camaro, the next generation Chevrolet Equinox and the all-new GMC Terrain.

Labour Costs

GM Canada recently reached a new competitive agreement with the CAW on March 11 and expects further discussion with the CAW concerning the provisions of the new CAW-Chrysler agreement in the days ahead. The achievement of these competitive labour costs together with capacity reductions will enable GMCL's active hourly labour costs to drop by 50% from US$1 billion in 2008 to US$500 million by 2010 and remain at the $500 million level into 2014 primarily due to the elimination of most cost inflators (as bargained in the March 11th agreement). Further savings have been achieved with salaried wage and benefit reductions including a 10% pay reduction for GMCL executives starting May 1, 2009. The remainder of the workforce will assume a 3 - 7% reduction in pay starting May 1, 2009. GMC and GMCL will review the status and timing of continuing wage cuts in December, 2009.

Workforce

GM Canada's workforce changes in Canada will accelerate beyond the changes outlined in GM Canada's February 20 Restructuring Plan. GMCL's hourly workforce is expected to go from 10,300 in 2008 to 4,400 in 2014. In addition GMCL is undertaking further salaried headcount reductions and will review overall employment levels with Government as part of its overall restructuring plan.

Brands and Nameplates

As GM moves to its 4 core brands, GMCL will follow the same plan of accelerated nameplate reduction as outlined for the US.

Dealer Network

In accelerating its Restructuring Plan and consistent with the announced changes to Saturn, Saab, HUMMER and Pontiac brands, GM Canada will reduce its dealer network from 705 dealers in 2009 to between 395-425 dealers at the end of 2010, a percentage reduction of 42% consistent with that in the US.

Market Assumptions

In line with US market share assumptions, GM Canada's market assumptions call for a projected 18.4% market share in 2009 to a range between 16 and 17% market share in 2010 through 2014, as we move to a more profitable balance of sales in Canada and a higher dealer throughput resulting in more financially solid dealers.

Balance Sheet

In Canada, discussions continue with the Ontario and Federal Governments with regard to steps to refinance and strengthen GM Canada's balance sheet.

General Motors of Canada (GMCL) is headquartered in Oshawa Ontario and employs 12,000 people nationwide. GM of Canada manufactures vehicles, vehicle powertrains, and markets the full range of General Motors vehicles and related services through approximately 700 dealerships and retailers across Canada.

Contact Information

  • GM Canada
    Stew Low
    905-644-6786