GM to close Ontario transmission plant in 2010

Company spokesman Stew Low said about 1,400 hourly and salaried employees work at the facility making four-speed automatic transmissions for front-wheel-drive vehicles.

But GM and other automakers are shifting from four-speed automatic transmissions to more fuel efficient six-speed gearboxes.

The strong Canadian dollar and higher labor costs in Canada also contributed to GM's decision, Low said.

"Certainly new investment in Canada is challenging. For a lot of different reasons, primarily cost," Low said. "Certain business cases here are challenging."

But in the end, Low said GM just didn't have a new product for the plant, which supplies transmissions to vehicles such as the Chevrolet Cobalt, Pontiac G5, Chevrolet HHR and Saturn Vue and to three mid-sized hybrids, the Saturn Aura and Vue and the Chevrolet Malibu.

"It really comes down to availability of product. There really just isn't anything in the portfolio at this time," he said.

Plant employees will get a chance to move to openings at other GM facilities in Canada, and they will receive income security, which generally amounts to 65 percent of their gross pay for three years after the plant closes, Low said.

GM officials told Canadian Auto Workers President Buzz Hargrove about the closure plans in contract talks, Low said. Hargrove wanted to tell employees of the plans as soon as possible, according to Low.

Hargrove said at a press conference in Toronto that he was angry and frustrated by the closure but conceded there's no new product for the factory.