August 18, 2006 - Canadian Press
OSHAWA (CP) - GM Canada, senior government officials and union leaders plan a news conference Monday for a "major automotive announcement," expected to be the new Chevrolet Camaro muscle car the automaker plans to revive in 2008.
GM announced Friday it will hold a news conference at its main Oshawa car plant Monday morning, raising speculation the company will confirm widespread industry rumours that the Oshwawa plant has won the competition to build the new Camaro.
The expected move comes after the Canadian Auto Workers union agreed to 2,500 early retirements to reduce the workorce and operating costs in Oshawa, Ont., to secure the rights to produce the new vehicle.
The 2,500 early retirement packages could save Oshawa's No. 2 auto plant, which had been slated for closure in 2008. If the plant gets the Camaro work, it could stay open, saving about 2,700 jobs, analysts say.
The three GM vehicle plants in Oshawa employ slightly less than 12,000 workers.
The latest version of the Camaro has been the source of speculation since it was unveiled at the Detroit International Auto Show in January to rave reviews. GM discontinued production of the muscle car in 2002, which left 1,000 workers at a Ste-Therese, Que., plant out of work.
That plant was demolished to make way for a shopping centre.
Last year, the federal government joined with Ontario to invest $435 million in the company's Ontario auto plants. Part of that money is helping to make the plants more flexible so they can accommodate the production of numerous models.
Earlier this month, GM Corp. CEO Rick Wagoner announced the decision to bring back the Camaro in a move the company (NYSE:GM) hopes will attract younger buyers as well as appeal to its traditional customers who want to roar down the highway.
Wagoner said the new version of the Detroit icon will appeal to car enthusiasts, yet be more fuel efficient and sophisticated than the 1969 version on which it is loosely based.
The new rear-wheel-drive car, with more aerodynamic styling than its predecessor, will hit showroom floors early in 2009. It will have automatic and manual transmissions and six-and eight-cylinder engine options to appeal to many buyers, he said.
The decision to build a car that harkens back to GM's heyday comes as the company struggles in a market beset by foreign competitors. The company lost $3.2 billion US in the second quarter alone, due mainly to employee buyouts and other restructuring costs. Its July sales were off 22.2 per cent from a year ago, led by declining demand for pickup trucks and sport utility vehicles.
GM officials say the Camaro is one piece of its plan to bring vehicles to market that people want.
The automaker expects to sell 100,000 Camaros a year, less than the remade Ford Mustang, which was the Camaro's chief competitor from the 1960s through the end of its run in 2002. Ford Motor Corp. sold about 101,000 Mustangs through July of this year.
Production of the Camaro follows the Mustang and DaimlerChrysler AG's Challenger as the domestic automakers turn to nostalgia to rekindle enthusiasm for their brands.
But the muscle cars go on sale as buyers are turning to smaller, more fuel-efficient cars and hybrid vehicles to combat gas prices that some say could rise as high as $4 US per gallon, about $1.08 a litre.
GM's Chevrolet division first introduced the Camaro in 1967.