Oshawa flexes its muscle in bid for new Camaro

Source - Globe and Mail Update - GRANT ROBERTSON

General Motors Corp. is returning to the muscle car business today with plans for a revamped Camaro, and the company's Oshawa, Ont., assembly plant has been positioned as a front-runner to build the reborn vehicle.

GM chief executive officer Rick Wagoner is expected to announce the resurrection of the Chevrolet Camaro at an industry conference in Michigan, after the company unveiled the concept version of the car back in January.

The Detroit auto maker isn't planning to announce where the Camaro will be built for several weeks, but sources said Wednesday that Oshawa is the most likely candidate to land the work. Such a move would be a major boost for the operation, which was hit by substantial job cuts last fall.

GM's operation in Wilmington, Del., is also considered a leading contender and several other U.S. plants have lobbied for the Camaro work.

Company executives have been reluctant to discuss where the Camaro could be built, however significant restructuring of labour agreements at Oshawa have been put in place for a project of such magnitude. Formal discussions have also been held in recent months on how the plant would be structured to handle construction of a new brand of car.

The Camaro will mark GM's return to the muscle car category on the heels of its American rivals. Ford Motor Co. made the first move with an supercharged overhaul of its Mustang. DaimlerChrysler AG also unveiled a concept version of the Dodge Challenger back in January and has picked its Brampton, Ont., facility for the assembly.

Though sources in government and the auto industry said Wednesday they are confident of Oshawa's chances, Canadian Auto Workers union president Buzz Hargrove said he isn't certain the project will come to Canada, though he is optimistic.

“We've had a lot of meetings, a lot of discussions, and a lot of ideas have been shared,” Mr. Hargrove said. “There's been no final decision.”

Should Oshawa be tagged for the Camaro assembly it would ease the blow delivered to the GM facilities there last November, when the company cut 3,900 jobs in Canada, including the planned shutdown of the No. 2 Oshawa plant by 2008.

The move was part of massive cutbacks at the auto maker, involving 30,000 layoffs across 12 North American plants. They were GM's deepest cutbacks since 1991. “It's an important decision for the long-term viability of Oshawa,” Mr. Hargrove said. “We're going to cross our fingers and hope like hell we get it.”

Discussions about producing the Camaro in Oshawa have centred around the shutdown of the No. 2 plant, sources said Wednesday. The company may look to expand the complex to accommodate the new Camaro assembly line.

Labour agreements have also been restructured to offer several thousand retirement packages to older plant workers, while bringing in newer employees at lower wages that would keep costs of the operations down.

“We are confident about Oshawa's chances,” a source said.

However, Mr. Hargrove pointed out that the auto sector has been clouded in uncertainty in recent years. Such agreements can get bogged down in political wrangling, with heavy lobbying efforts expected from state governments in the United States where GM plants are located.

Joseph Cordiano, Ontario's Minister of Economic Development and Trade, is today expected to respond to GM's announcement and will be part of a further push from Canada until the announcement is made.

The return to muscle cars comes at an awkward time for the major U.S. auto makers, since the designs draw heavily on the original version of the vehicles which had larger engines than most production cars today.

Analysts say rising gasoline prices could hurt sales of the cars, just as sales of sport utility vehicles have softened in some categories.

The Camaro debuted in 1967 and GM stopped production in 2002. The revamped version is expected to come with a V-6 and a V-8 engine.