Canada union acknowledges Oshawa plant to shut

TORONTO, June 26 Thu Jun 26, 2008 8:12pm BST

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TORONTO, June 26 (Reuters) - Canadian autoworkers acknowledged that General Motors Corp's (GM.N) decision to close a Oshawa, Ontario, truck plant next year was irrevocable, a union leader said on Thursday after a meeting with company officials.

"Are we accepting it? Eventually, if someone keeps hitting you over the head with a sledgehammer, you're going to wake up," said Buzz Hargrove, president of the Canadian Auto Workers, said at the union's headquarters.

Hargrove said GM told the union it may decide to build a new model in its Oshawa car plant, where the new Chevrolet Camaro muscle car is set to begin production, but he added the situation looked bleak.

"We talked about putting together an incentive program that will help with the downsizing of the Oshawa operation over the next four or five years," said Hargrove.

The CAW said it would take a couple of weeks to look at the GM proposal on incentives before responding.

About 2,600 unionized workers will lose their jobs when the truck plant is closed.

GM's announcement of the closure ignited a firestorm of protest that included a 12-day blockade of GM Canada's headquarters. It came just two-weeks after the company signed a new three-year labor agreement with the union in which it said it would keep the plant open until at least 2011.

An Ontario judge ordered an end to the blockade, but added that GM acted with "almost deceitful behavior" in the contract negotiations, which could make future bargaining difficult.

The union has not totally given up hope on the fate of the plant, hoping the cyclical nature of the auto industry will allow GM to reopen it in the future, said Chris Buckley, president of CAW Local 222, in Oshawa.

"Their business is changing every month ... so we're hoping that over the next year or two... things will turn around somewhat," he said, saying the union hoped GM could eventually find a vehicle that could fit into the Oshawa truck plant without a huge capital expenditure.

"The key is for them not to demolish that facility," he said.

GM shares dropped to their lowest in 53 years on Thursday after Goldman Sachs cut the struggling U.S. auto industry's largest manufacturer to a "sell rating" and warned it would have to raise capital. See [ID:nN26451117]

The housing and credit crises in the United States, along with the high price of gasoline, has put a big dent in U.S. auto sales, especially trucks and SUV's.

GM makes the Chevrolet Silverado and the GMC Sierra at the Oshawa truck plant. It is one of four truck plants in North America the company said it would shutter to scale back production.

GM officials left the meeting without speaking to reporters. (Editing by Frank McGurty)

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