General Motors said Wednesday it would move production of the next version of its Camaro sports car from its Canadian operation in Oshawa, Ontario, to a plant in Lansing, Michigan.
GM Canada said in a statement that the new Camaro will be assembled at its Lansing Grand River Assembly plant, which now employs about 1,600 people. The statement said that lower capital investment and improved production efficiencies were key factors.
Some analysts said the labor agreements the Canadian Auto Workers' union reached with the North American autoworkers a few months ago would lead to an exodus of jobs to the U.S. because labor rates are higher in Canada.
The Canadian union said the decision will cut production in Oshawa by as much as one third starting in late 2015 or early 2016. CAW President Ken Lewenza said he felt shocked and betrayed by the move. Lewenza called on the company to replace the production and estimated at least 1,000 direct jobs and 9,000 indirect jobs will be lost if it isn't replaced.
The Canadian government, which helped bail out GM three years ago, said it expects an explanation.
"We are concerned about the implications of this announcement on the men and women whose livelihoods depend on General Motors. Taxpayers of Canada made a substantial investment to keep General Motors competitive and we will hold General Motors to the commitments they made in return for that investment," Industry Minister Christian Paradis said in a statement.
"It is up to General Motors to provide Canadians with an explanation for their decision today, and I expect them to do so," he said.
GM noted the Camaro is the only rear-wheel drive vehicle assembled at Oshawa.
GM said it will continue to meet production targets agreed to with the federal Canadian government and provincial Ontario government in 2009. Ottawa and Ontario contributed $13.7 billion to help bail out GM and Chrysler and combined own about 9 percent of GM's common shares.
The U.S. Treasury Department said Wednesday that it will sell its remaining stake in General Motors by early 2014. Canadian Finance Minister Jim Flaherty said Wednesday the government will consider selling, but didn't want to conduct a fire sale.
Ontario Economic Development Minister Brad Duguid also noted the bailout and said the province expects a greater level of commitment by the automaker.
"As such, we expect GM to move quickly to bring new product mandates to the facility," Duguid said in a statement. "We will carefully review GM's obligations and ensure they are accountable for those commitments."