With its high dollar making Canada the world's most expensive place to manufacture vehicles, General Motors (GM) has decided to cut production at its Oshawa plant near here and lay off about 1,000 workers.
"With rising fuel prices, a softening economy and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities," the company said in a statement issued here.
As the cut in production will lead to loss of about 1,000 direct jobs - and 6,000 related jobs- the Canadian government has come under pressure to intervene to help the auto industry.
Just a few months ago, GM had laid off about 1,000 workers at the car plant as its sales sagged in the US. With Monday's announcement, two of the three work shifts at the plant have been eliminated.
About 90 percent of all vehicles manufactured at this Canadian plant are exported to the US.
The Canadian dollar (loonie) acquiring parity with the American dollar, rising high gas prices, the dumping of foreign made vehicles here and the economic downturn in the US have hit the Canadian auto industry very badly.
Canadian Auto Workers (CAW) union leaders have blamed the government for not doing enough for arrest this trend.
Chris Buckley, president of CAW at the GM plant, said: "I want to challenge the government to get off their asses and start to give some attention to the declining auto industry and manufacturing sector.
"This is absolutely devastating news to about 900 to 1,000 of our members who will lose their jobs.''
He said the government should intervene to check the rising dollar to make manufacturing competitive in Canada, and lower fuel powers by reining in profit-greedy oil companies.
The union leader said while foreign car manufacturers dumped millions of vehicles in Canada, they had little access to foreign markets. The lay-off will take effect in September.
Though GM has announced that it will start production of hybrid vehicles at the plant, it is unlikely to soften the blow to workers.
Last year, about 1.5 million vehicles were sold in Canada.
Indo-Asian News Service