General Motors of Canada Limited

General Motors of Canada Limited

March 03, 2005 12:12 ET

GM To Invest $2.5 Billion In Canadian Operations

Investments Will Strengthen Automotive Engineering, R&D and Manufacturing Capabilities in Canada Attention: Automotive Editor, Business/Financial Editor, Media Editor, News Editor, Photo Editor OSHAWA, ONTARIO--(CCNMatthews - March 3, 2005) - General Motors of Canada Limited (GMCL) President Michael Grimaldi today announced a $2,500,000,000 reinvestment in GM's Canadian operations representing the largest and most comprehensive automotive investment in Canadian history. Following agreements with the Ontario and Federal Governments, GM's "Beacon Project" investments will strengthen automotive engineering, R&D and manufacturing capabilities in Canada. The Beacon Project includes the following:

New Vehicle Programs

GM Canada will proceed with major investments in new vehicle and engine technology at its operations in Oshawa, St. Catharines and the CAMI joint venture in Ingersoll, Ontario. The company today confirmed that its Oshawa Car Plant 1 will build the 2006 Model Year Chevrolet Impala and Chevrolet Monte Carlo mid-size cars and the CAMI Automotive joint venture will build the all new 2006 Pontiac Torrent compact SUV. GM Canada will also introduce an all new application of the fuel-efficient "Displacement-on-Demand" V-8 engine to be built at its St. Catharines Powertrain plant.

Enhanced Vehicle Engineering Activities

The new Canadian vehicle programs are also being supported by increased product and manufacturing engineering services carried out at GM's Canadian Engineering Centre located in Oshawa. GM is currently the only automaker with extensive engineering activities in Canada. The Beacon Project will increase these capabilities in support of General Motors' global vehicle development process. In addition, investments are included to support GM's fuel cell research, development initiatives and the creation of a state-of-the-art virtual product development Visualization Centre.

Flex Manufacturing and Environmental Leadership

GM Canada also announced that it would proceed with major new investments in flexible manufacturing processes and technologies at its number two Oshawa Car Assembly Plant. These investments will enable the plant to adapt quickly to customer and vehicle market changes and to produce a multitude of vehicle models and platforms on the same assembly line.

The Company also announced it will proceed with significant investments in industry leading environmental technologies as part of a new paint shop that will support GM Canada's Oshawa Autoplex - the largest auto assembly complex in the western hemisphere. The new paint shop investments will increase the total production capacity of GM's Oshawa Car plants while also setting a new environmental benchmark among Canadian auto plants.

Employment and Skills Training

The Beacon project is also an investment in the GMCL workforce, and will add approximately 500 jobs in total at GM's Engineering Centre and CAMI Automotive. GM has prioritized skills upgrading and training programs to support the Beacon Project investments. GM will also establish a number of new apprenticeships to be offered in Oshawa and CAMI. GM and CAMI will also create internship opportunities for foreign trained professionals such as engineers in conjunction with the Career Bridge program.

New Canadian Automotive Innovation Network

A strategic, longer term aspect of the Beacon Project is the creation of a major initiative to enhance automotive innovation and commercializable research and development in the automotive supply chain in Canada. Today, GM Canada makes more automotive supply purchases than any other automotive manufacturer in Canada. Together with the Ontario government, the Company will create a new Automotive Centre of Excellence (ACE) at the University of Ontario Institute of Technology (UOIT) to better link participating automotive companies, suppliers, universities, researchers and students in the area of automotive innovation and engineering.

The new Automotive Centre of Excellence will anchor a new and much broader Canadian Automotive Innovation Network comprised of selected universities in Ontario, Quebec and British Columbia, led by GM's Canadian Engineering Centre. Founding members of the Innovation Network will include McMaster University, University of British Columbia, University of Waterloo, University of Ontario Institute of Technology, Université de Sherbrooke, McGill University, Ecole Polytechnique Montréal, Université du Québec Institut national recherche scientifique and Auto 21.

GM Canada will invest in the Innovation Network to enhance the competitiveness of the Canadian automotive industry through leading edge R&D. This will include investments in new research projects, Design and Research Chairs at select Canadian universities, as well as in-kind donations by GM and partners, of computer-based design tools that will help train a new generation of Canadian engineering students. GM Canada will also work with its university partners to develop Canada's first accredited degrees in automotive engineering and design.

Michael Grimaldi, president of GMCL said, "This $2.5 billion investment demonstrates GM's strong commitment to Canada's automobile industry. GM's investment is looking to the present and the future as we focus on great new cars and trucks, flexible manufacturing, the environment, and R&D. The partnerships comprehended in the Beacon Project are critical to successfully compete in an industry going through a challenging global transformation with
production over-capacity."

"With today's announcement, the federal government is demonstrating a commitment to do its part in keeping Canada at the forefront of new areas of environmental responsibility and innovation in the automotive sector," said
the Honourable Joseph Volpe, Minister of Citizenship and Immigration and Regional Minister for Ontario. "The people of General Motors - the employees, the Union, the management, and the suppliers - have allowed us to partner with them to bring these new opportunities to Ontario."

"GM's investment in Ontario is a resounding vote of confidence for the province and its workers," said Ontario Premier Dalton McGuinty. "Our government is committed to strengthening the competitiveness of Ontario's automotive sector, and we will continue to work with industry, labour and the research community to ensure that Ontario remains the place to be for years to come."

"CAW members at General Motors have earned this new investment by continually meeting demands for high quality and productivity. The Beacon Project is not only good news for the Canadian auto industry, but also great
news for our members, their families and their communities," said CAW president Buzz Hargrove.

"The provincial and federal governments' financial support for GM's Beacon Project shows that our political leaders understand the importance of maintaining a strong, viable, modern and sustainable auto industry in Canada,"
added Hargrove.

More information about GM of Canada can be found at: www.gmcanada.com

Beacon Project Backgrounder

New Canadian Automotive Innovation Network

- GM is the only automaker with extensive Canadian based vehicle design and engineering activities linked to the products it produces in Canada. GM's Engineering Centre is located in Oshawa and employs over 400 engineers.

- The Chevrolet Equinox (assembled by CAMI in Ingersoll) was the first vehicle in the industry both engineered and manufactured in Canada.

- A key feature of the Beacon Project is the creation of a major new initiative to enhance engineering, design, innovation and commercializable research and development in the automotive supply chain in Canada.

- At the core of the new Innovation Network will be a new Automotive Centre of Excellence to be located at the University of Ontario Institute of Technology in Durham Region, north of GM's Oshawa Autoplex and Engineering Centre. The Centre of Excellence will bring together researchers, students, suppliers, automotive engineers and purchasers in a new facility equipped with state of the art automotive design and engineering tools.

- The new Centre of Excellence at UOIT will anchor a broader virtual Canadian Automotive Innovation Network led by GM's Canadian Engineering Centre.

- The Network will be initiated with participation from University of British Columbia, University of Waterloo, McMaster University, University of Ontario Institute of Technology, Auto21, Université de Sherbrooke, McGill University, Ecole Polytechnique Montréal and Université du Québec Institut national recherche scientifique as well as key Canadian automotive suppliers.

- The Automotive Innovation Network's mandate will be to increase Canadian automotive competitiveness through innovation and commercializable R&D.

- GMCL and partners will make a multi-million dollar investment in the Network and its participating universities to facilitate innovation and enhance the competitiveness of the Canadian automotive supply base. This will include investments in new R&D projects and Design and Research Chairs at select Canadian universities as well as in kind donations by GM and its partners of industry standard computer-based design tools that will help train a new generation of Canadian engineering students.

- GM Canada will also work with its university partners to develop Canada's first accredited undergraduate and graduate degrees in automotive engineering and design.

New Vehicle Programs and Enhanced Engineering

- The Beacon Project supports three new GM vehicle programs in Ontario - the all new Chevrolet Impala (Oshawa Car 1), the redesigned Chevrolet Monte Carlo (Oshawa Car 1) and the all new Pontiac Torrent (GM/Suzuki CAMI Joint Venture operation, Ingersoll, Ontario).

- More information about these new vehicles can be found at www.gmcanada.com

- GM's Canadian Engineering Centre located in Oshawa will support the engineering and design of these new vehicles. This significant growth of Canadian-based vehicle engineering builds upon the pioneering work done at GM's Canadian Engineering Centre, which served as the global lead engineering centre for the new Chevrolet Equinox being assembled at GM's CAMI joint venture in Ingersoll.

- The Engineering Centre will also be the home to a global visualization centre that creates a full scale vehicle interactive 3-dimensional stereo image which will reduce product engineering lead times and cost.

- New investments at GM's St. Catharines Powertrain plant will deliver a new application of the V-8 "Displacement on Demand" engine. "Displacement on Demand" technology automatically shuts down 4 of 8 engine cylinders when they are not required in order to conserve fuel. This new engine is being offered on the 2005 Chevrolet Trailblazer EXT, the GMC Envoy XL, Pontiac Grand Prix GXP, and will be available on the Oshawa-built 2006 Impala SS and Monte Carlo SS.

Flexible Manufacturing and Environmental Leadership:

- The addition of 'flex-manufacturing' capability at Oshawa Car Plant 2 will involve new robotics and manufacturing systems enabling quick and efficient response to market demand for future models or platforms. When implemented, the new systems will enable the plant to produce a multitude of vehicle models and platforms on the same assembly line.

- The Oshawa paint shop and environmental technology investments will increase the total production capacity of Car Plants 1 and 2 while reducing VOC emissions on a per vehicle produced basis. This investment sets a new benchmark for Canadian automotive paint shop emission reductions.

- GM's Canadian Engineering Centre is an integral part of GM's Global Vehicle Development Process and will also support General Motors' fuel cell research and development initiatives (specific details are confidential at this time).

Employment and Skills Training

- The Beacon Project is an investment in the GMCL workforce and will add approximately 500 jobs in total at GM's Canadian Engineering Centre and CAMI Automotive.

- GM's Innovation Network investments with selected Canadian universities will provide the opportunity to educate and train hundreds of future engineers in the use of digital data needed for research, development and analysis processes that are critical to modern automotive engineering.

- GM will make significant investments in skills upgrading and training programs to support the Beacon Project investments.

- GM will establish a number of new apprenticeships to be offered in Oshawa and CAMI. GM and CAMI will also create internship opportunities for foreign trained professionals focusing on engineers in conjunction with Career Bridge program. Operated by Career Edge, a Toronto based not-for-profit organization, Career Bridge, works with employers who offer short term paid internships to recent immigrants to Ontario who bring high levels of education and work experiences from overseas.

Key Facts About GM Canada

- Canada's largest automaker with 8 assembly and components facilities including Oshawa Car Assembly Plant 1, Oshawa Car Assembly Plant 2, Oshawa Truck Assembly Plant, Oshawa Metal Centre, St. Catharines Powertrain Operations (Glendale and Ontario Street Plants), Windsor Transmission Plant, London Electromotive Division and CAMI Automotive Assembly Plant (GM and Suzuki joint venture) in Ingersoll.

- Accounted for 40% of Canada's total vehicle production in 2004 - 1,055,085 vehicles (including CAMI Automotive).

- Market share was 28.3% in 2004.

- Exported approximately $27 billion of vehicles and parts in 2004 (including CAMI Automotive).

- GM's Canadian plants recognized as industry leaders in quality (J.D. Power), productivity (Harbour and Associates) and safety performance.

- Approximately 800 dealerships employ over 34,000 people across Canada.

- Only automaker with extensive engineering activities in Canada. GM's Canadian Engineering Centre, located in Oshawa, employs over 400 engineers. The Chevrolet Equinox (assembled by CAMI in Ingersoll) is the first vehicle to be both lead-engineered and manufactured in Canada.

- Only automaker with a dedicated purchasing staff located in Canada. GM purchased approximately $18 billion in Canadian auto parts and supplies in 2004. GM makes more automotive supply purchases than any other automotive manufacturer in Canada.

- Only automaker making significant annual auto supply purchases ($800 million) in Quebec. GM has targeted $400 million of new business for Quebec suppliers between 2003 and 2008.

- Leads the auto industry with existing and planned research activities with over 20 Canadian academic institutions located in Nova Scotia, Quebec, Ontario, Alberta and British Columbia including several NSERC Chairs and more than 60 R&D projects with various universities. /For further information: For further information: General Motors of Canada Limited, David Paterson, (416) 294-5484, d.paterson@gm.com; Pam McLaughlin, (905) 644-2728, pam.mclaughlin@gm.com; Buzz Hargrove, CAW-Canada, (416) 464-3352; Peter Kennedy, CAW-Canada, (416) 704-7707 / IN: AUTOMOTIVE

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