School president says GM plant closure shouldn't have impact
Jun 05, 2008 - 12:58 PM
DURHAM -- Now more than ever, partnerships such as The Beacon Project are important in ensuring General Motors stays competitive, Ronald Bordessa said.
While the Oshawa truck plant is closing, plans for the University of Ontario Institute of Technology's automotive research facility are going ahead as scheduled, said the university's president. The centre will be used as part of GM's Beacon Project.
"There's no reason for them to change anything," said Mr. Bordessa.
If anything, GM should be more concerned about having the facility available for research so it can continue to compete by changing products as quickly as possible, he said.
The truck plant closed due to GM's inability to sell its trucks, he said. The automaker recognizes the need to modify its product line and bring it into conformity with what the market place is looking for, Mr. Bordessa said.
"GM has done many of the hard things. They're positioning themselves to be competitive in the future," Mr. Bordessa said. "I have no doubt they will in fact do well in the future."
The Beacon Project is intended to support new vehicle and engine programs, employment and skills training and automotive engineering, research and development and manufacturing in Canada. The joint project involved GM and the federal and provincial governments.
The Automobile Centre of Excellence (ACE) at UOIT will include research and development tools to test vehicle dynamics and durability, including a wind tunnel to simulate -40C conditions.
The project is important to help Oshawa be seen as not only a manufacturing city, but also one that does research, Mr. Bordessa said.
"I would say this news this week is very difficult for GM and the workers and the city to absorb," he said. "We all have to work together to ensure Oshawa and GM are competitive players in the automotive sector."
GM is providing $60 million to the ACE, while the provincial government is providing $58 million. The federal government is also contributing.
For closing its Oshawa plant, GM could face up to $35 million in penalties from the Ontario government.
The impending closure of the 2,600-employee truck plant sparked a political firestorm at Queen's Park recently over the $175 million, 50-year loan GM received from Premier Dalton McGuinty's $500 million auto investment fund three years ago, GM vice-president David Paterson confirmed. Under the deal, GM was to maintain an average of 16,000 jobs in Ontario over a 10-year period ending in 2013.
Similar penalty provisions are in effect from a $200 million federal government loan, Mr. Paterson said.
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