Does GM’s CAMI Investment Spell Oshawa’s Doom?
Today, General Motors announced that it will invest $250 million in its CAMI assembly plant in Ingersoll, Ontario. The plant, formerly a GM-Suzuki joint venture that Suzuki pulled out of in December 2009, has been one of GM’s busiest, producing the hot-selling Chevrolet Equinox and GMC Terrain. The investment will add 336,000 square feet to the plant, and will house the new body shop tooling and equipment, according to the CAMI Assembly plant manager, Les Bogar.
This is good news for CAMI, because the plant has had trouble keeping up with demand ever since the 2010 Equinox was launched. Among other things that GM has tried to meet demand for CAMI-produced vehicles since then, over the past few years, GM has:
- Bought out Suzuki’s stake in CAMI six months after Suzuki stopped producing its XL7 in CAMI
- Sent bodies produced at CAMI 125 miles to Oshawa for final assembly to boost capacity at a low cost
- Introduced the Mexico-built Chevrolet Captiva as a fleet-only offering so that Equinox/Terrain production would only have to meet retail demand
- Re-opened the mothballed Spring Hill, TN plant for overflow Equinox/Terrain production
Interestingly, today The Truth About Cars published a strong analysis piece discussing the likelihood that GM’s sprawling Oshawa, Ontario plant may be close to the end of its life. Aside from the Chevrolet Impala and Cadillac XTS – both of which can be built in any number of other plants – Oshawa does not have any future product scheduled.
GM recently approached the CAW about the potential of opening negotiations early on a new contract. The plant’s current deal expires in September. The announced investment in the plant is likely a bargaining tool to show the plant’s CAW membership that the company is committed to the plant, and a successful resolution to the negotiations will likely result in a future product commitment at CAMI, likely for the next-generation Equinox/Terrain.
Meanwhile, GM previously committed $675 million in investments to Canadian manufacturing. It may turn out that there is no money left, no vehicles left for Oshawa.
An alternative course of action could be that if the CAMI negotiations do not go well (which seems unlikely – after all, they probably just have to show up in order to win the next-gen Theta assembly deal), GM could use Oshawa in combination with Spring Hill to produce the two crossovers. But absent that, it seems that 1) Oshawa doesn’t seem to have any products on the horizon in the near term, and 2) Spring Hill will probably need its own product or two, and may not have enough work with just Theta-platform overflow work to keep the sprawling plant happily humming along near capacity.
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