Could Canada escape deeper auto layoffs?

Both General Motors and Chrysler released restructuring plans to the U.S. government that included a total of 50,000 layoffs.

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Both General Motors and Chrysler released restructuring plans to the U.S. government that included a total of 50,000 layoffs, but an analyst and labour leader say the companies’ Canadian operations could emerge relatively unscathed from the latest round of cuts.

GM (NYSE: GM) said it plans to reduce its global workforce by 47,000 employees in 2009, 26,000 of which will come from outside the United States.

But Tony Faria, an auto industry specialist at the University of Windsor, said it’s likely those numbers include GM’s previously announced closure of its truck plant in Oshawa, Ont. this spring, and its transmission plant in Windsor, Ont, next year, costing a total of approximately 4,000 Canadian jobs.

“Beyond that, I don’t really see anything further in Canada,” Faria said.

GM employs approximately 5,400 hourly employees at its two car plants in Oshawa, and confirmed in its restructuring announcement late Tuesday that it still plans to begin manufacturing the new Chevrolet Camaro there this year.

It also said it plans to begin production of the Chevrolet Equinox at the joint-venture GM-Suzuki CAMI plant in Ingersoll, Ont., in 2009

“I think the Oshawa car plant, which is highly productive and making some good vehicles, could temporarily lose some jobs due to inventory adjustments, but I don’t think Oshawa will permanently lose any jobs unless there’s real difficulty reaching concession agreements with the (Canadian Auto Workers union),” Faria said.

“Fairly recently, GM invested a lot of money in Oshawa to make it one of their most flexible and up-to-date plants, and that’s another hopefully strong reason that GM will continue production there,” he added.

CAW president Ken Lewenza said he believes GM has already cut as much as it can in Canada, with cuts to assembly and parts operations in earlier restructurings of the automaker’s North American operations.

“The reality is, General Motors in Canada has already restructured from our perspective to the bare minimum,” Lewenza said in an interview Wednesday.

The CAW is preparing for concession talks with the Canadian divisions of the Detroit Three carmakers – GM, Ford and Chrysler – and says it will open its contracts signed last year to ensure Canadian labour costs are competitive with U.S. costs.

The CAW has already agreed to a three-year wage freeze in Canada that will save the auto companies $900 million in wages to 2011, or $300 million a year. The union will likely come under pressure to provide more concessions since the United Auto Workers’ deal with Detroit’s three automakers limits overtime, changes work rules, cuts lump-sum cash bonuses and gets rid of cost-of-living pay raises to help reduce the companies’ labour costs.

Chrysler said Tuesday it plans to pare 3,000 U.S. jobs. Chrysler chairman and CEO Bob Nardelli said the 3,000 job cuts won’t impact the automaker’s Canadian operations directly, but he implied that he expects proportionate cuts north of the border.

GM employs about 19,000 people in Canada, mainly in southern Ontario. Chrysler employs about 10,000 workers at assembly and parts plants in Windsor and in the Toronto area, where a streamlining announced two years ago will pare the workforce to about 8,400.

The two companies’ Canadian divisions will release their restructuring plans to the federal and Ontario governments this Friday so they can tap into C$4 billion in aid. That amounts to about 20 per cent of the U.S. aid package in the hopes that the Canadian industry will be able to maintain its 20 per cent share of the companies’ North American production.

GM and Chrysler said Tuesday they will seek billions more in U.S. government loans than they predicted just two months ago, and Ontario Premier Dalton McGuinty said Wednesday he expects the companies to ask Ontario for more aid money as well.

The Canadian auto industry lost approximately 13,000 jobs in 2008 and experts say it faces another 15,000 jobs lost this year as parts makers scale back output as the vehicle companies cut the number of cars and trucks they assemble to cope with a slump in demand from consumers.

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