INGERSOLL, Ont. - General Motors Canada will invest $90 million in its joint-venture facility in southwestern Ontario, resulting in the recall of about 150 laid-off employees.
The investment, announced Monday, will allow GM to retool one of the plant's body shops in order to increase manufacturing capacity and meet strong demand for its 2010 Chevrolet Equinox and GMC Terrain.
"This investment is an excellent example of what happens when you get the product right. If the product is right, everything else follows -- increased production, increased employment and strong market demand," said GM Canada president Arturo Elias.
The added capacity will result in production of an additional 40,000 vehicles annually for the Canadian and U.S. markets at the CAMI facility in Ingersoll, Ont.
The CAMI plant, which is a joint venture between GM and Japanese automaker Suzuki, has been a major beneficiary as GM ramps up production to meet demand from improved sales. In August, the company announced that it would reinstate a third shift at CAMI, bringing back 300 employees to satisfy demand for the Equinox and the Terrain.
Both vehicles are crossovers, or sport utility vehicles built on car platforms. Crossovers are becoming a popular choice across brands as consumers increasingly seek out fuel-efficient options.
Both the federal and Ontario governments, which invested a total of $10.5 billion in GM earlier this year as the automaker struggled to survive the economic downturn, said they were pleased by the announcement.
"As a major partner in the restructuring of the automotive industry over the past year, I am very encouraged by this investment," stated federal Industry Minister Tony Clement.
"As a result of the high demand for the Equinox and Terrain, approximately 450 workers have returned to or will start new jobs at the plant. This is great news for CAMI, great news for Ingersoll and for Canada."
GM said the planning and retooling work will begin immediately and the project is expected to be completed in about seven months. The retooling will take advantage of unused capacity that has been sitting idle since Suzuki discontinued production of its XL7 SUV in September 2008 due to poor sales.
Once the 150 recalled employees are back on the production line, CAMI will have no remaining workers on layoff.
GM Canada employs about 9,000 people at various plants in southern Ontario, including CAMI, an assembly plant in Oshawa, a transmission factory in Windsor, and an engine plant in St. Catharines. The Windsor engine plant will close next year.
When General Motors (NYSE:GM) announced its restructuring plan when it filed for bankruptcy protection in the U.S. last spring, it said it would spend $2.2 billion on capital and $1 billion on research and development between now and 2016 in Canada.
