GM Proprietary
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Submitted by:
GENERAL MOTORS OF CANADA LIMITED
Submitted to:
INDUSTRY CANADA AND ONTARIO MINISTRY OF ECONOMIC DEVELOPMENT
Friday February 20, 2009
Submitted: February 20, 2009 GMCL Restructuring Plan Page 2 of 52
GMCL RESTRUCTURING PLAN - HIGHLIGHTS
GMCL‟s Restructuring Plan is achievable and transformative. Despite further North American market deterioration, the Restructuring Plan will achieve long-term viability and enable GMCL to repay Canadian taxpayers. The Restructuring Plan has three Key Components:
1) Implement further "self help" cost reduction actions and adopt a new, beneficial "Contract Manufacturer" business model;
2) Obtain the CAW‟s agreement to achieve legacy cost reductions and align active worker wage and benefit levels to benchmark levels; and
3) Complete Canadian and Ontario Government support agreements for sufficient financing to sustain operations and restructure GMCL's balance sheet to address unsustainable legacy costs.
Restructuring Plan Highlights: Maintains GMCL‟s share of Canada / US production which is expected to range between 17% and 20% between 2009 and 2014. GMCL remains one of Canada‟s largest automobile manufacturers. Embraces the Federal and Ontario Governments' Principles for proportional production / proportional support vis-a-vis GM in the US. Requires Agreements with the Canadian and Ontario Governments and the CAW to be completed in March 2009. Enables the launch of 5 new vehicles in Oshawa and Ingersoll including new hybrid vehicle production, new flexible transmission production in St. Catharines and significant advanced environmental R&D for next generation electric car systems, with suppliers and universities in Canada. Adopts more conservative market assumptions. Retains GMCL customers, dealer network and new vehicle line-up as the company‟s top strength and priority. Contemplates no further GMCL plant closures at this time, reflecting restructuring actions already announced. Enables GMCL to remain Canada's top selling automaker and offer more 2009 hybrid models than any competitor. Includes shared sacrifices such as a 10% reduction in executive salaries and reduced benefits and pay for salaried workers. Secures pensions for GMCL retirees and would establish a "VEBA-like" structure for health care benefits. Fully consistent with GM's loan conditions with US Department of Treasury and GM's Viability Plan as submitted to US Treasury on February 17, 2009. Meets viability requirements by establishing GMCL as a sustainable, stand-alone enterprise.
The GMCL Restructuring Plan should be read together with GM‟s Viability Plan submitted to US Treasury on February 17, 2009. GMCL has conducted extensive due diligence and shared comprehensive financial and competitive information with the Canadian and Ontario governments under appropriate non-disclosure agreements. Submitted: February 20, 2009 GMCL Restructuring Plan Page 3 of 52
GMCL Restructuring Plan Table of Contents
I Executive Summary 4
II Background 8
III The Challenge – Markets, Credit, Structure, Legacy, Costs 9
IV GMCL’s Restructuring Plan – A Viable Stand-Alone Entity 13
V Investments in Green Technology and Flexible Manufacturing 18
VI GM Suppliers in Canada 25
VII GMCL Dealers in Canada 26
VIII Risks 29
IX Conclusion 30
X Appendices
A GM Viability Plan 31
B Forward-Looking Statements 32
C Key Facts About GM‟s Transformation for Long-term Success 33
D GMCL Company Profile 40
E Chronology of Recent GMCL Production Restructuring 41
F Quality and Productivity Leadership 44
G GM Suppliers and GMCL Dealers 46
H GMCL Canadian Engineering Centre 51 Submitted: February 20, 2009 GMCL Restructuring Plan Page 4 of 52
I EXECUTIVE SUMMARY:
General Motors of Canada Limited (“GMCL”) has prepared an achievable and transformative Restructuring Plan, as outlined in this high-level summary submitted to the Governments of Ontario and Canada. This Restructuring Plan includes necessary business model changes and shared sacrifices. With agreements from key stakeholders, the Plan would enable GMCL to achieve long-term viability and enhance its value as part of the General Motors Corporation (“GM”) integrated North American operations. The Plan will enable GMCL to sustain its strong proportion of automobile production between Canada and the United States, maintain its position as one of Canada‟s largest automobile sellers and manufacturers, launch new Canadian vehicle mandates including Canada‟s first hybrid car production and enable significant advanced environmental R&D in Canada with Canadian suppliers and universities. The Plan would enable GMCL to emerge from the current market crisis as a viable sustainable company and repay the Canadian taxpayer.
The Challenge – Markets, Credit, Structure, Legacy, Costs
The crisis of declining sales and credit availability that first manifested itself in the United States automotive market in 2008 has since become a global industry challenge that is now facing all automakers. In this challenging environment, GMCL further accelerated the restructuring activities it began in 2005. While much has been accomplished, GMCL continues to carry exceptional cost burdens related to its historic business structure, pension and health care “legacy costs” and active wage and benefit levels.
Significant steps have recently been taken in the US operations of GM to address structural pension and health care legacy cost issues, and such work continues. These legacy cost changes have not occurred in GMCL‟s operations for various reasons. The cost of servicing these legacy obligations has become overwhelming for GMCL and, as a result, immediate restructuring is required as GMCL is approaching the minimum cash reserve levels required to meet its obligations.
The GMCL Restructuring Plan – A Viable Stand Alone Entity
GMCL welcomed and greatly appreciated the generous offer of short-term emergency loans by the Ontario and Federal governments on December 20, 2008. With the completion of the December 31, 2008 US Loan Agreements (“December US Loan Agreement”) and other efforts to conserve cash within Canada, GMCL was able to secure alternate capital sufficient to meet its short-term requirements. This enabled management to develop GMCL‟s long-term restructuring plans and seek agreements with key stakeholders before it becomes necessary to draw upon government assistance (required in the absence of available private sector capital).
GMCL‟s Restructuring Plan respects the context and terms of GM‟s December 31 US Loan Agreement reached with the US Treasury (UST). It should also be noted that the December US Loan Agreement precludes “investments” in foreign subsidiaries. The Submitted: February 20, 2009 GMCL Restructuring Plan Page 5 of 52
Restructuring Plan therefore ensures GMCL will be viable as a stand-alone entity while still operating within an integrated North American marketplace.
Three Key Components of the GMCL Restructuring Plan
1) Implement further “self help” cost reduction actions and adopt a new beneficial “Contract Manufacturer” business model;
2) Obtain the CAW’s agreement to changes sufficient to achieve legacy cost reductions and align active worker wages and benefits to benchmark levels; and
3) Complete financing agreements and related actions with the Ontario and Federal Governments sufficient for GMCL to sustain its operations and restructure its balance sheet in order to address legacy burdens and ensure viability.
These key components, which are further described in this Restructuring Plan, need to be addressed before the end of March 2009.
Proportional Production / Proportional Support
In its discussions with the Ontario and Federal Governments, GMCL has embraced the Governments‟ stated Principles for support. Recognizing that GMCL is an important part of GM‟s integrated North American business and marketplace, the Governments stated their expectation that proportional levels of production in Canada, compared to that in the US and Canada, be maintained. The Governments also offered to explore conditional financial assistance for GMCL in proportion to that support provided by the US Government to GM.
Under a successful restructuring, GMCL forecasts it would sustain its current strong share of Canadian/US production, which is expected to range between 17 and 20% between 2009 and 2014. This range contemplates yearly variations due to current and new product launches and lifecycles.
GMCL has also discussed scenarios for longer term financing with the Governments necessary to maintain GM‟s Canadian operations and to achieve GMCL‟s restructuring and ensure its viability. GMCL is seeking proportional financing agreements with the Federal and Ontario Governments in the context of GM‟s February 17, 2009 Viability Plan (“GM Viability Plan”) submitted to the US Treasury (“UST”), which updated GM‟s request for support. The GM Viability Plan (which is being evaluated by the UST) is based on the further recent deterioration of global automotive markets. GM‟s updated request (including an expected need to replace a $4.5 billion revolving line of credit upon maturity in 2011) is for $22.5 billion in assistance. Some $13.4 billion of this amount has now been advanced.
GM identified a further possible request for an additional $7.5 billion line of credit in the instance of further US market deterioration to levels of 9.5 million units in 2009 and 11.5 Submitted: February 20, 2009 GMCL Restructuring Plan Page 6 of 52
million units in 2010. If that industry scenario were to evolve, the total GM request would amount to $30 billion. GM has also submitted Section 136 applications to the US Department of Energy for funds in excess of $8 billion.
A Transformative Plan - Leaner and Greener
The GMCL Restructuring Plan is also transformative for GMCL – creating a leaner and “greener” company and helping to shape the automobile technology of the future. The Plan would enable the launch of five new fuel efficient GM vehicles in Canada, as well as additional model variants including the first hybrid car to be manufactured in Canada.
GMCL‟s dealer network and its line-up of new products represent a critical positive strength and a priority for GMCL‟s success. GM‟s new lineup of fuel efficient cars and crossovers continues to be recognized with leading industry awards. GMCL will offer more hybrid models in 2009 than any competitor and will introduce the Chevrolet Volt extended range electric car in 2011.
GM is narrowing its brand and nameplate focus, which will continue to preserve and strengthen GMCL‟s dealer presence in Canada by ensuring greater profitability and volumes through fewer and more strategically located dealerships. GMCL will continue to seek opportunities for retirements, private capital acquisitions and facilitated consolidations consistent with the GM brand and product plans outlined in GM‟s Viability Plan.
Building Upon Recent Investments
The Restructuring Plan builds upon significant actions taken since November 2005. GMCL has invested more than $3 billion in Canada since 2005 to ensure its core operations are highly competitive. These include the addition of both a new “state-of- the-art” Paint Shop and flexible manufacturing capacity and capability in GMCL‟s Oshawa Car Plant, a new planned 6-speed transmission flexible manufacturing system to be constructed at the St. Catharines Glendale Powertrain Facility, and the completion of the ongoing transformation of the Canadian Engineering Centre into a smaller but higher added-value advanced environmental R&D centre. The Centre will support the “electrification of the car” and work collaboratively with universities and suppliers through the new General Motors of Canada Automotive Centre of Excellence to be constructed at the University of Ontario and Institute of Technology (“UOIT”) and the creation of an Automotive Innovation Network (“AIN”).
The Restructuring Plan also comprehends significant cost and capacity reductions already accomplished or announced since November, 2005. GMCL previously announced the closures of the west side of the St. Catharines Ontario Street Powertrain Facility (originally planned to occur in 2008), the Oshawa Truck Plant (to occur in May 2009) and the Windsor Transmission Plant (to occur mid- 2010), but at this time no further GMCL plant closures are contemplated. GMCL executives and the salaried workforce are also making significant sacrifices through continuous workforce contraction, wage cuts, benefit elimination/reductions in Canada.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 7 of 52
Transparency
As a privately-held company, GMCL recognizes the need to be as transparent as possible in seeking public funds in Canada, balanced with the need to negotiate agreements and protect confidential competitive information. GMCL has been in detailed discussions with the Ontario and Canadian Governments. This has included the sharing of comprehensive financial and competitive GM information under appropriate confidentiality agreements. This high-level document summarizing the GMCL Restructuring Plan is provided in addition to the comprehensive sharing of confidential information with Governments. This document is intended to be read in conjunction with the GM Viability Plan submitted to US Treasury. In particular, the GM Viability Plan noted that GM remains optimistic that agreements with both the CAW and the Canadian and Ontario Governments can be completed to enable GMCL to achieve long-term viability but in the event agreements cannot be reached, GM will be required to re-evaluate its future strategy for GMCL as the subsidiary would not be viable on a stand-alone basis. (A link to the GM Viability Plan can be found in Appendix A.)
GMCL has also shared significant information with the CAW relative to the need to be competitive with US Auto Transplants and the need to address the legacy cost burden. We look forward to more structured talks that culminate in an agreement on necessary changes and restructuring to ensure a viable and sustainable business in Canada. We anticipate completing agreements before the end of March 2009.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 8 of 52
II BACKGROUND
Historically, GMCL has been one of Canada‟s largest privately-held companies and has a proud 100-year history as a major contributor to Canada‟s economy. The McLaughlin Motor Car Company began to produce cars in Canada in 1908 pursuant to an agreement with the Buick Motor Car Company. Shortly thereafter, it was purchased by GM and evolved into General Motors of Canada Limited. By its 30th anniversary in 1938, GMCL had produced a million vehicles in Canada. In 1965, Canada and the US signed the Canada-US Automotive Products Trade Agreement (Autopact). The Autopact enabled GMCL to increase its production capacity dramatically. The North American Free Trade Agreement (NAFTA) between the US, Canada and Mexico led to wide-open automotive trade in North America. In 2007, GMCL reported revenue of $31.7 billion.
GMCL is woven into the very fabric of Ontario and Canada. It has been the backbone of Canadian manufacturing, a significant investor in research and development, and has a long history of philanthropic support in communities across the country. The auto industry today remains a driving engine of the Canadian economy, directly and indirectly employing 1 in 7 Canadian workers (compared to 1 in 10 in the US), and is one of the largest purchasers of steel, aluminum, iron, copper, plastics, rubber, and electronic and computer chips.
Competition has never been more fierce in the automotive industry, with more arrivals into the market dividing market share between more competitors. GM faces this competitive challenge (in the context of the current extreme market slowdown) with exceptionally high “legacy costs” related to the need to fund retiree pensions and related health care benefits. GM‟s North American transplant competitors bear a fraction of these costs due to demographic and contractual differences between the workforces. GM also has labour provisions from prior collective bargaining agreements throughout North America that are now untenable versus new competitors.
GM has made substantial progress in closing the gap with foreign competition in quality, productivity and fuel efficiency (Please see Appendix F for more information about the recognition of GMCL‟s manufacturing quality and productivity). We are committed to further improvements in these and other areas critical to GM‟s long-term success. It is also noteworthy that in other markets, such as China, Latin America and Russia, and where GM does not have the burden of legacy costs, its operations have recently grown profitably, rapidly and out-performed the competition.
On the environmental front, GMCL has always been a leading seller of small cars in Canada. We are also now a leader in world-competitive hybrid and other “green” technology vehicles. GMCL has never failed to meet a Canadian mandate or commitment in the important areas of fuel efficiency and vehicle emissions. Please see page 18-25 for more information on GM‟s environmental product and production plans.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 9 of 52
III THE CHALLENGE – MARKETS, CREDIT, STRUCTURE, LEGACY, COSTS
The unprecedented decline in North American vehicle sales combined with significant consumer shifts toward less profitable vehicles overtook GMCL‟s ongoing restructuring efforts in 2008. The ability to generate cash flow from GMCL manufacturing operations was significantly reduced and cash flow from sales of vehicles in Canada was similarly reduced by the contraction of the Canadian market and a sharp devaluation of the Canadian dollar. GMCL‟s inability to raise funds in the capital markets reduced its options and impacts GMCL‟s ability to offer leasing options through GMAC. Additionally, it is becoming increasingly difficult to service GMCL‟s legacy cost due to an increasingly large retiree population, high health care cost, health care inflation and poor pension asset returns stemming from a recessional market.
While GMCL welcomed and greatly appreciated the offer of emergency loans by the Ontario and Federal governments on December 20, 2008, it subsequently secured sufficient short term liquidity from other non-US sources within GM and initiated substantial “self-help” cost savings. This enabled GMCL‟s management to focus upon more fundamental restructuring needs. Time is limited however as GMCL projects it will reach the minimum cash levels required to meet its obligations in the second quarter of 2009. GMCL is also focused upon meeting the Ontario and Canadian Governments‟ stated principles which include maintaining current proportional levels of GMCL manufacturing in Canada and GMCL receiving proportional financial support to that provided to GM by the US Government.
GMCL restructuring plans must be developed within the context and terms of GM‟s loan agreements reached with the US Treasury (UST) at the end of December 2008. Given GMCL‟s high level of integration into GM‟s overall North American strategy and operations, GMCL must ensure it is a viable, profitable “stand alone” entity within GM‟s integrated North American automotive business.
1) Reduced Revenues - Planning Conservatively
Market Outlook
Over the past few months, US auto sales – across all manufacturers, foreign and domestic – have declined by approximately 40% compared to peak levels in 2005 and are at their lowest per capita levels in half a century. GM sales are 22% behind year- ago levels. These levels are especially relevant to GMCL which ships approximately 90% of its production to the US market.
As set out in GM‟s Viability Plan, the Company is planning for conservative industry volumes. GM‟s US baseline industry sales projection is 10.5 million units in 2009 – a dramatic decline from 16.5 million units in 2007, and even from the 13.5 million units sold in 2008. GM projects the industry will recover moderately to 14.3 million units by Submitted: February 20, 2009 GMCL Restructuring Plan Page 10 of 52
2011 and 16 million units by 2012. This projection is significantly below the 17 million unit industry levels averaged over the last nine years and considered to be a reasonably conservative approach to gauging liquidity needs.
2009 2010 2011 2012 2013 2014 US Industry Outlook - Downside 9.5 M 11.5 M 12.8 M 14.5 M 14.9 M 15.3 M - Baseline 10.5 M 12.5 M 14.3 M 16.0 M 16.4 M 16.8 M - Upside 12.0 M 14.3 M 15.8 M 17.5 M 17.9 M 18.3 M Canadian Industry Outlook - Downside 1.320M 1.370M 1.450M 1.500M 1.530M 1.545M - Baseline 1.460M 1.550M 1.630M 1.690M 1.700M 1.710M - Upside 1.555M 1.670M 1.750M 1.790M 1.800M 1.813M
GMCL‟s Canadian baseline industry sales projection has also been reduced by 90,000 units to 1.460 M units in 2009. This is significantly lower than the 2008 industry sales of 1.67M and the industry sales in 2007 of 1.69M. (Please refer to Appendix B for forward- looking statements.)
Production Planning
GM‟s current production plans extend as far as 2014. GMCL combined annual future production volume (including GMCL production in Oshawa and GM‟s production at CAMI Automotive Inc. (“CAMI”)) is expected to range between 17-20% of combined annual GM US/Canadian production between 2009 and 2014. (Note: CAMI Automotive is a 50:50 GMCL-Suzuki Motor Corp. joint venture.)
Canadian planned volumes for 2009 include Oshawa pickup truck production which will end in May 2009 (with the already announced closure of the Oshawa Truck plant), as well as production of the current Chevrolet Impala on the Oshawa Car “Consolidated Line.” The new Oshawa Car Flex line will ramp up production volumes between 2009 and 2013, as will CAMI production of the new Chevrolet Equinox and the GMC Terrain. Production volumes are of course determined by consumer demand and economic variables which cannot be fully predicted.
Going forward, GMCL‟s production capacity will focus on the Oshawa Car Flex manufacturing line and GM‟s production at CAMI. It is expected this combined GM production will continue to be amongst the largest of any automaker in Canada. GMCL also notes that it does not have full control over the CAMI joint venture and therefore future CAMI-based production remains subject to Suzuki‟s agreement to continue in that joint venture.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 11 of 52
2) Unsustainable Costs Related to Active Employees and Retirees
To ensure its viability, GMCL must address significant employment legacy costs related to retiree pensions and health care and ensure its labour wages and benefits are competitive with US competitors. This will require agreements with the CAW as well as the refinancing of GMCL‟s balance sheet including its pension and related health care obligations.
As noted above, GM‟s loan agreement with the UST requires it to demonstrate cost competitiveness with US transplant competitors. Subject to ratification and review by the US Department of Labour, certain modifications to the GM/United Auto Workers (“UAW”) labour agreement have been negotiated. To demonstrate its viability within the GM enterprise, GMCL needs to also achieve competitive levels in Canada through negotiation with the CAW. The Federal Minister of Industry has stated the Federal Government‟s expectation that the CAW will agree to such competitive costs if the Federal Government is to provide financial restructuring assistance. For its part, while final agreements must be secured, the CAW has committed to achieving competitive cost levels.
Pension Costs
In Ontario, GMCL sponsors registered defined benefit pension plans for most of its workforce, with the GMCL Salaried Retirement Program established in 1947 and the Hourly Pension Plan in 1950. Total membership in the GMCL pension plans currently stands at 56,000, with an active to retiree/surviving spouse ratio now over 1:3. This active to retiree/surviving spouse ratio is a significant financial burden in maintaining pension and health care benefits at current levels. These ratios will increase significantly toward a ratio of 1:5 following the closure of the Oshawa Truck and Windsor Transmission plants and the additional salaried employment reductions in Canada as part of the requirement to reduce GM‟s global salaried employment by 10,000.
In 1992, GMCL elected to have both plans designated as “qualifying plans” under the Ontario Pension Benefit Act and Regulations. The “qualifying plan” provision enacted in 1992 allowed any employer whose pension plan had assets in excess of $500 million (at market value) to declare the plans to be “qualifying plans”. Such plans must fund current service costs as well as any special payments to amortize unfunded liabilities on a “going concern” basis. In addition, this designation requires annual actuarial valuations to be filed with the Ontario Government, and results in significantly higher annual Pension Benefits Guarantee Fund (PBGF) assessments (for GMCL, at a cost of $5 million plus tax per plan annually). Such designation has allowed GMCL to continue to make significant investments of more than $10 billion in product and plant innovations and upgrades over the last 15 years while meeting its pension funding obligations.
The Pension Plan for hourly-rated employees is a supplemental agreement attached to the Master Agreement between GMCL and the CAW and is valid through September 2011. It is a “flat benefit” (fixed) defined benefit plan and as of November 30, 2007 (the Submitted: February 20, 2009 GMCL Restructuring Plan Page 12 of 52
latest filed valuation), had assets of $6.4 billion, liabilities of $7.9 billion and a “going concern” funded status of 80.9%.
The Retirement Program for salaried employees was a “final average earnings” related plan design. For post-2006 service, the Salaried Defined Benefit Plan is now a “career average earnings” plan. There is also a “money purchase” component to the program that was added in 2002 which allows members to make additional voluntary contributions. Employees hired on or after January 1, 2007 and Quebec plan members are now covered by a defined contribution plan. As of November 30, 2007 (the latest filed valuation), the defined benefit plan had assets of $2.2 billion, liabilities of $2.3 billion and a going-concern funded status of 96.4%.
A history of the GMCL hourly and salaried plans shows many plan improvements with good asset returns, steady ratios and continued compliance with their legislated and regulated obligations. However, the cost of servicing GMCL‟s pension obligations to required levels has now further increased with requirements to compensate for portfolio valuations in response to recent sharp financial market declines and an increasingly large retiree population.
While GMCL was in full compliance with its legal, “going concern” funding status as of the last valuation date, the total obligations (or debt) represented by GMCL pensions as they are currently structured are no longer sustainable. GMCL is working with the CAW and the governments to explore options to address this challenge.
Health Care Benefit Liabilities – VEBA and Other Options
Similarly, liabilities and servicing costs for both active and retiree health care benefits (including drug and dental insurance) must be addressed if GMCL is to demonstrate it can be a competitive sustainable and viable enterprise within GM. The health care burden has been addressed in the US by establishing, together with the UAW, a union- owned and directed Voluntary Employee Benefits Association (VEBA). GMCL is working with the CAW and with the Federal Government to explore similar structures for consideration in Canada as well.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 13 of 52
IV GMCL’S RESTRUCTURING PLAN – A VIABLE STAND-ALONE ENTITY
To address the challenges set out above, GMCL‟s Restructuring Plan requires several actions and agreements with GMCL stakeholders before the end of March 2009. All of the key actions in the plan are required together to sustain GMCL‟s operations, reduce its structural costs, ensure its competitiveness and refinance its balance sheet to address unsustainable legacy costs. The Restructuring Plan would allow GMCL to reduce and refinance these liabilities to ensure a viable, sustainable future business in Canada.
This high-level document summarizing the GMCL Restructuring Plan is provided in addition to the comprehensive sharing of financial and competitive information with the Ontario and Federal Governments under appropriate non-disclosure agreements. This document is intended to be read in conjunction with the GM Viability Plan submitted to US Treasury. (A link to the GM Viability Plan can be found in Appendix A.)
While the form and amounts of specific restructuring actions remain under discussion with GMCL‟s key stakeholders, the Restructuring Plan has three key broad components:
1) Implement further “self help” cost reduction actions and adopt a new, beneficial “Contract Manufacturer” business model;
2) Obtain the CAW’s agreement to achieve legacy cost reductions and align active worker wages and benefits to benchmark levels; and
3) Complete financing agreements and related actions with the Ontario and Federal Governments sufficient for GMCL to sustain its operations and restructure its balance sheet in order to address legacy burdens and ensure viability.
Together these key steps would enable GMCL to proceed with new product investments, return to profitability and meet its obligations in Canada including repayments to governments.
1) Implement further “Self Help” Cost Reduction Actions and Adopt a New, Beneficial “Contract Manufacturer” Business Model
While GMCL must take further action to reduce costs, it should be recognized that GMCL‟s structural costs have been decreasing significantly resulting from various measures implemented since the initiation of GM‟s 2005 North American transformation plan. As illustrated in the chart below, GM plans to reduce its global structural costs significantly from over 35% of global revenues in 2005 towards a globally-competitive rate in 2012 (although interrupted by the sudden decline in 2008 revenues). Achieving these levels of competitiveness is painful and requires focus on all areas of structural costs. Submitted: February 20, 2009 GMCL Restructuring Plan Page 14 of 52
GMNA Structural Cost Outlook Annual Structural Cost Structural Cost as % of Revenue 50 40% 39.0%
45
35% SC as % of Revenue SC of % as 40 30.5% 30.8% 30.0% 30% 35.6 27.4% 35 33.8 24.8% 24.0% 30.4* 23.3% 25% 30 26.3 25.0 20% StructuralCost Billions)($ 25 24.0 24.0 24.0 24.0
20 15% 2006 2007 2008 2009 2010 2011 2012 2013 2014
* 2008 data is preliminary Note: 2006 and 2007 data vary from numbers reported in the December 2 submission due to changes in GAAP classification of certain revenue and other income items previously reflected as structural cost offsets in-line with prior management reporting
Shared sacrifices were accelerated in 2008 as GM took dramatic actions to conserve cash in the face of the global credit crisis and US vehicle market collapse. In addition to the significant capacity changes already announced by GMCL with the planned shutdowns at the Windsor Transmission Plant and the Oshawa Truck Plant, GMCL took steps to close or consolidate its Canadian Parts and Service Operations and regional sales and service offices (A chronology of recent GMCL cost reduction changes can be found in Appendix E).
GMCL estimates that as a result of these reductions, employee levels will decrease from a combined hourly and salaried workforce of approximately 20,000 in 2005 to an expected workforce of approximately 8,000 (based on market conditions) in mid- 2009 following the planned May 2009 closure of the Oshawa Truck Plant. GMCL‟s employee levels will reduce further to approximately 7,000 after the closure of Windsor Transmission in 2010. (These numbers exclude joint venture employment.)
At the same time, GMCL has maintained its industry-leading reputation for quality, productivity and safety (for more information, please see Appendix F).
Submitted: February 20, 2009 GMCL Restructuring Plan Page 15 of 52
Executive and Salaried Compensation and Benefit Cuts
GMCL Executives, salaried workers and retirees have made significant sacrifices toward ensuring cost competitiveness in Canada. The reduced employment levels noted above include GMCL‟s share of the recently announced salaried employee reductions of 10,000 in 2009.
In addition to following the conditions concerning executive compensation set out in GM‟s agreement with UST, GMCL executives will all be expected to reduce their salary by 10% starting May 1, 2009. GMCL‟s other salaried workers have been asked to make a sacrifice of a 3-7% reduction in salary beginning in May 2009, with these changes to be reviewed in December, 2009.
In addition to the above-noted compensation reductions, recent benefit changes for GMCL executives and active salaried employees have included adjustments to compensation, insurance, retirement, health care, savings and other programs, including the following:
Frozen salaries and bonus payments for salaried employees and executives; Frozen pension plan and introduced new lower cost formula; Severe reduction of salaried layoff plan and introduced new severance plan; Modification of health care plans to provide higher co-pays and caps and elimination of certain plans; Introduction of monthly health care contributions; Suspension of company contributions to stock savings program; Suspension of all cash reimbursement plans such as tuition refund; Reduction or elimination of group life insurance benefits; and Elimination of post retirement health care for new hires.
Changes that affect salaried retirees have included the following:
Modification of health care plans to provide co-pays and caps and elimination of certain plans; Introduction of monthly health care contributions; and Restriction of the ability to add new dependents to health care plans.
Adopt a New “Contract Manufacturer” Model and Maintain a “National Sales Company” Business Model
A further step in the GMCL Restructuring Plan is to minimize risks by transitioning its manufacturing business model in Canada to that of “Contract Manufacturer” – a change that would enable GMCL to produce and sell its products to GM on a “value-added, cost-plus” basis.
In recent years, GMCL‟s current manufacturing business model has exposed it to sudden changes in the US market such as vehicle segment shifts, fuel prices etc. Submitted: February 20, 2009 GMCL Restructuring Plan Page 16 of 52
Volatile market shifts changes have left GMCL exposed and unable to cover fixed operating costs including special charges such as vehicle engineering costs, R&D and other administrative corporate overheads.
The Contract Manufacturer model is employed by GM in several other jurisdictions. It is beneficial for Canadian operations as it allows GMCL to cover all standard manufacturing costs (excluding legacy cost) such as stampings, powertrains etc. before applying a standard markup. This model stabilizes GMCL‟s production business – now more focused on cars and crossovers - and enhances its ability to repay its obligations, including government support.
It should be noted that the Contract Manufacturer model is founded upon GMCL attaining and maintaining a competitive wage, benefit and work rule structure. Cash flow improvements related to this model have been modeled and reviewed with the Ontario and Federal Governments.
2) Obtain the CAW’s Agreement to Achieve Legacy Cost Reductions and Align Active Worker Wages and Benefits to Benchmark Levels
The second critical aspect of the GMCL Restructuring Plan is the need to achieve a competitive CAW active and retiree wage and benefit structure. As noted above, the UST has required GM and the UAW to achieve wage and benefit parity with the “US transplants” and the Canadian Government has stated the same expectation for GMCL and the CAW. This level of competitiveness, at reasonably anticipated exchange rates, also underpins the benefits of the Contract Manufacturer model described above.
GM and its North American labour unions have negotiated agreements that are indeed transformative, such as the US Retiree Health Care Trust (VEBA). Work continues on these approaches in the U.S. and Canada. While the most recent UAW and CAW collective agreements are different, they both aim to accomplish the goal of reducing structural cost to competitive North American benchmark levels.
Towards this end, in 2008, GMCL and the CAW worked cooperatively to improve our manufacturing cost competitiveness and align our Canadian footprint to reflect market demand. In addition to our 2008 National Master Agreement, GMCL and the CAW negotiated and implemented several plant-specific Competitive Operating Agreements which have allowed our facilities to improve their cost structure via outsourcing of non- core operations and the implementation of further manufacturing flexibility.
Further work is now required with the CAW to reduce the very significant growth in the cost of GMCL hourly retiree pensions and health care. While earned pension benefits must be respected by law, there remains opportunity to reduce the growth of hourly retiree pension and health care costs on a go-forward basis. These changes are critical to ensuring GMCL‟s viability.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 17 of 52
Given the unprecedented US market contraction and the fierce competitive pressures in the North American vehicle market, it is imperative that GMCL and the CAW continue to work cooperatively on various options to further reduce GMCL‟s overall cost structure and to conserve cash throughout the organization. The CAW has recently committed to playing a constructive role in developing a long-term solution to these challenges.
3) Complete Financing Agreements and Related Actions with the Ontario and Federal Governments Sufficient for GMCL to Sustain its Operations and Restructure its Balance Sheet to Address Legacy Burdens and Ensure Viability
The third essential step in the GMCL Restructuring Plan, is the long-term refinancing of GMCL‟s balance sheet to address unsustainable legacy costs.
All efforts have been made to reasonably estimate the financing requirements to complete GMCL‟s restructuring and stabilize and secure the pensions of GMCL salaried and hourly retirees. These refinancing needs have been discussed with the Ontario and Federal Governments and will be further reviewed as GMCL seeks to achieve a financing agreement in March. GMCL is also awaiting further actuarial reports concerning the funding status of its pension plans.
As a privately-held Canadian corporation, GMCL does not publicly release stand-alone financial information. However GMCL recognizes the importance of accountability and transparency and accordingly, we have shared extensive legal and financial information with both Governments under appropriate non-disclosure agreements. This full financial disclosure has enabled us to review the benefits of changes to our business model, examine all opportunities to mitigate active and retiree costs, and determine appropriate refinancing options and requirements to ensure GMCL‟s long term viability.
GMCL is seeking to reduce its current and future employment related liabilities through a combination of further measures that would first reduce and then refinance these obligations. This will involve shared sacrifices but ultimately enable GMCL to operate on a profitable basis and meet all future obligations.
In its discussions with the Ontario and Federal Governments, GMCL has embraced the Governments‟ stated Principles for support. Recognizing that GMCL is an important part of GM‟s integrated North American business and marketplace, the Governments stated their expectation that proportional levels of production in Canada, compared to that in the US and Canada, be maintained. The Governments also offered to explore financial assistance for GMCL in proportion to that support provided by the US Government to GM.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 18 of 52
V INVESTMENTS IN GREEN TECHNOLOGY AND FLEXIBLE MANUFACTURING
The transformative restructuring actions outlined above will build upon a series of important recent investments and restructuring actions taken by GMCL between 2005 and 2009. These actions and investments provide us with an excellent base of new state of the art facilities and excellent environmental technologies and products. This critical foundation of work will enable us to sustain our leading position in Canadian Automotive R&D as well as our important relationships with Canadian suppliers, dealers and universities.
The Beacon Project Investments
Since 2005, through partnerships with the Federal and Ontario Governments, GMCL has invested more than $3 billion in its Canadian facilities, including a series of key investments made as part of the “Beacon Project”. Announced in 2005 and now substantially complete, the $2.5 billion Beacon Project included transformative investments related to manufacturing capabilities, automotive engineering and R&D in Canada.
The Beacon Project included strategic investments in a number of GMCL‟s manufacturing facilities. An industry-leading paint shop was installed at the Oshawa Car Plant, setting an environmental benchmark among Canadian auto plants and increasing the total production capacity of the Oshawa Car Plant. In addition, as a result of the Beacon Project, state-of-the-art flexible manufacturing processes and technologies were installed in the Oshawa Car Plant to enable the production of a multitude of vehicle models and platforms on a single assembly line, allowing for quicker adaptation to customer and vehicle market changes. The Beacon Project also included investments in the St. Catharines Glendale Powertrain Facility to introduce the fuel- efficient „Active Fuel Management‟ technology to Canadian engine production.
New vehicle program investments were also made as part of the Beacon Project with the result that the Oshawa Car Plant was selected to build the 2006 Chevrolet Impala and Monte Carlo mid-size cars and CAMI was selected to build the 2006 Pontiac Torrent compact SUV.
Another part of the Beacon Project included strategic investments to facilitate the creation of an Automotive Innovation Network (“AIN”), designed to accelerate automotive innovation and commercializable R&D in Canada‟s automotive supply chain. GM makes more automotive supply purchases in Canada than any other automotive manufacturer. In 2007, GM purchased more than $14 billion in parts and services from Canadian companies. By partnering with the governments to establish the AIN, and with the new General Motors of Canada Automotive Centre of Excellence (to be constructed) at the University of Ontario Institute of Technology as part of the network, GMCL is taking important steps to create value for the Canadian auto industry through a collaborative approach to technology development by creating a better link between automotive companies, suppliers and universities. Submitted: February 20, 2009 GMCL Restructuring Plan Page 19 of 52
GMCL Production Capacity Changes: Oshawa Truck and Windsor Transmission
While GMCL has invested far more in Canadian operations than any other automotive company since 2005, GMCL has also made very difficult but necessary changes to align its capacity with market demand and reduce our structural costs toward benchmark levels.
In May 2008, GMCL announced that its Windsor Transmission Plant would cease production in 2010 as it completes its four-speed front-wheel drive transmission mandate. The decision was made as a result of a shift in the market away from the four-speed transmissions towards new, fuel-efficient six speed transmissions.
In addition, in 2008, the US vehicle market began to move sharply away from full-size trucks and SUVs towards cars and crossovers. As a result, on June 3, 2008, GM announced it had made the difficult decision to close four North American facilities building full-size pick-up trucks and SUVs, including the Oshawa Truck Plant. The original closure date for the Oshawa Truck Plant was scheduled for July 1, 2009 but given current market forecasts, the Plant is expected to cease production in May of 2009.
It should be noted that no funding was received from governments in Canada for investments at either the Windsor Transmission or the Oshawa Truck Plants. However, by closing the Oshawa Truck Plant in 2009, GMCL anticipates that it will fail to achieve certain targets in the Beacon Agreements which will trigger an early prepayment of a portion of the support received from the Ontario and Federal Governments. In exchange for forbearance of this anticipated early prepayment, GMCL and the Ontario and Federal Governments entered into a Letter Agreement under which GMCL committed to proceeding with the “Revised Pathways Project” which includes:
i) investment in 6-speed front-wheel-drive transmission capacity in the St. Catharines Glendale Powertrain Facility; ii) the first hybrid car to be manufactured in Canada at Oshawa Car; and iii) investments of $40 million within the next five years in advanced environmental technology R&D at the Canadian Engineering Centre in conjunction with Canadian suppliers and universities.
GMCL also expects to meet all other covenants and requirements of its 2005 Beacon Project investment agreements.
GMCL Go Forward Plans
As noted, GMCL‟s Restructuring Plan includes necessary business model changes and shared sacrifices but will also create a leaner, greener company and helping to shape Submitted: February 20, 2009 GMCL Restructuring Plan Page 20 of 52
the automobile technology of the future. The Plan also includes key new product mandates at the Oshawa Car Plant, the St. Catharines Glendale Powertrain Facility, and at CAMI. Investments made between 2005 and 2010 to support these product mandates will be approximately $4 billion.
Between now and 2013, Oshawa Car Plant production would begin on the “flex line” with the Chevrolet Camaro starting in early 2009, to be followed by two new front-wheel- drive mid-sized products. The first front-wheel drive car, initially expected to start production in 2010 has now been delayed until late in 2011 as a necessary step to conserve cash. A hybrid version of this front-wheel-drive car would still be expected to proceed and would be the first hybrid car assembled in Canada. The timing of the start of production of a second front-wheel-drive vehicle for the flex line has not yet been confirmed. A further small-volume model that has been under consideration for the flex line is still subject to further assessment.
Also at the Oshawa Car Plant, production of the Chevrolet Impala on the “consolidated line” moved to two shifts of production effective February 9, 2009, and is expected to remain in production, subject to market conditions, until 2013.
GMCL also plans to go forward with vehicle production at CAMI in Ingersoll as it introduces two new vehicles in 2009 – the all-new Chevrolet Equinox in May (shown below) and the GMC Terrain in August. Subject to market demand, these vehicles would be expected to be produced until 2013. These new front wheel drive cars and the new crossovers to be built at CAMI are expected to be leaders in their segments for fuel efficiency.
2010 Chevrolet Equinox:
Submitted: February 20, 2009 GMCL Restructuring Plan Page 21 of 52
GMCL Vehicle Production Timeline is shown below:
St. Catharines Glendale Powertrain Facility will supply engines and transmissions for the new front wheel drive cars to be manufactured at Oshawa Car Plant. As a result of the delay in the start of production of the first front-wheel-drive car at the Oshawa Car Plant, the start of production of 6 speed front-wheel-drive transmissions will be delayed until mid-2012.
GMCL Powertrain Production Timeline is shown below:
2008 2009 2010 2011 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D Park Avenue MCE2 GMX381B/O Grand11/04 B/OAm 3/054 dr - SOP 7/04 ST. CATHARINES ENGINE
Gen 4 V8
SOP x/14 Gen 5 V8
SOP x/14 Gen 5 V6
High Feature V6
ST. CATHARINES TRANSMISSION
SOP 4/12 6 Speed FWD Transmission
Submitted: February 20, 2009 GMCL Restructuring Plan Page 22 of 52
GMCL Canadian Engineering Centre
Additionally, GMCL performs advanced automotive engineering at our Canadian Engineering Centre located in Oshawa, Ontario (“CEC”) and, as noted earlier, is completing a transition from vehicle program engineering to more advanced automotive environmental R&D and innovation work, focused on fuel efficiency improvements and future extended range electric vehicle technology. This work will engage selected Canadian suppliers and universities and has the potential to increase the innovative and environmental capacity of these organizations. GMCL‟s advanced technology investments represent almost 20% of GM‟s global investments in advanced technology engineering in 2009. Given the importance and size of the supply chain in Canada, GMCL also intends to continue sourcing competitive parts and services in Canada to support its Canadian facilities and global operations.
GMCL has the largest vehicle engineering and R&D operation of any auto company in Canada. GM has encouraged other auto manufacturers operating in Canada to make progress towards increasing their overall levels of local R&D and sourcing from Canadian suppliers in line with GMCL‟s benchmark.
“Green” Technology
GMCL recognizes that its Restructuring Plan must be transformative not only for itself but also for the country. The Plan is founded on leadership in new environmental technology and performance. GM‟s investments and transformational efforts are perhaps nowhere better seen than in the leading range of advanced environmental technologies and vehicles GMCL is now offering to consumers in Canada.
For the 2009 model year, GMCL is offering more hybrid models than any other company in Canada and GM plans to offer 15 hybrid models in North America by 2012. We have long been the largest seller of small cars in Canada. Going forward, 24 of the next 26 new planned vehicle launches in North America will be fuel-efficient cars or crossovers. GMCL has become a fuel efficiency leader with 21 models for sale in Canada in the 2008 model year that achieve 7.0 Litres/100 km on the highway - more small fuel-efficient models than any other automaker in Canada.
Technology and innovation capacity is vital to sustainability in the auto sector. For example, GM has developed two hybrid systems: firstly, a highly affordable hybrid system offered in the Saturn VUE and AURA and the Chevrolet Malibu Hybrid. It delivers a 10-20% fuel economy gain and sets the global benchmark for an effective low-cost hybrid system. Secondly, GM‟s award winning two-mode hybrid system, which is utilized in full-size pick-up trucks, SUVs and compact crossovers. Our 2-mode hybrid Chevy Tahoe and GMC Yukon have been recognized for their ability to offer a 50% improvement in city fuel economy resulting in comparable city fuel economy with the 4 cylinder Toyota Camry.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 23 of 52
GM will also launch the ground-breaking Chevrolet Volt in 2010 with the Canadian launch expected in 2011. The Volt is an extended-range electric vehicle that will provide up to 65 km of electric-only driving on a single charge. GMCL is participating in the development of electric vehicle technologies through R&D being undertaken at the CEC in Oshawa and we are collaborating with Ontario Power Generation and other utilities in preparing consumers for this new technology.
2011 Chevrolet Volt:
GMCL has also played a significant role in the development of emission-free fuel cell vehicles. The Canadian Engineering Centre in Oshawa was selected to assemble the world‟s largest fleet of hydrogen fuel-cell powered Chevrolet Equinoxes as part of GM‟s Project Driveway.
“Green” Facilities – “Ontario Environmental Leader” Recognition
GMCL is also proud to be the first and only automotive manufacturer to be recognized as an “Environmental Leader” under Ontario‟s Environmental Leader program. GMCL has attained this status in recognition of its environmental record at GMCL‟s Ontario facilities and for our commitment to achieve targets more stringent than environmental compliance required by law. These commitments include voluntary reductions in air emissions at assembly locations and voluntary reductions in waste production and energy consumption at all Ontario facilities.
With the suite of new vehicles to begin production at the Oshawa Car Plant and CAMI, GMCL‟s vehicle production profile is moving towards more fuel efficient offerings than the current vehicles produced in GMCL‟s facilities. The Oshawa Truck Plant was the first plant in Canada to produce a hybrid vehicle, with hybrid variants of the Chevrolet Silverado and GMC Sierra pick-ups delivering a 50% improvement in city fuel economy.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 24 of 52
The new vehicles to be introduced at the Oshawa Car Plant are fuel-efficient, mid-size front-wheel drive cars. The first of these vehicles will include a hybrid variant making the Oshawa Car Plant the home of the first hybrid car to be manufactured in Canada.
At CAMI, smaller and more fuel-efficient crossovers will replace the current crossover production. The new Chevrolet Equinox and GMC Terrain will start production at CAMI in May and August 2009 respectively and will have a choice of a 4 cylinder (2.4L) or V6 (3.0L) engine compared with the current Equinox and Pontiac Torrent which are only offered with V6 engines configurations (3.4L or 3.6L). This represents a shift to more sophisticated powertrains that are all aluminum, and incorporate both direct injection and variable valve technology. The new 3.0L V6 will be flex-fuel capable and both new engines will be paired with 6 speed transmissions. The 4 cylinder Equinox is expected to lead the segment in fuel economy with fuel consumption estimated to be 6.7 L/100 km highway.
Based on Transport Canada's 2009 estimate of 20,000km annual driving distance and $1.00/L for regular gas, consumers who drive the 2.4L Equinox will save an estimated 360 litres of fuel or $360 annually, versus the 2008 Equinox.
GMCL‟s powertrain production also makes a contribution to fuel efficiency. St. Catharines Glendale Powertrain Facility manufactures V6 and V8 engines. The V8 engines incorporate cylinder deactivation technology called “Active Fuel Management.” Using cylinder deactivation, the engine switches seamlessly from 8 to 4 cylinders in low- demand situations such as highway cruising but then switches back to 8 cylinders when required for hill-climbing or other high-demand situations.
In addition, GMCL plans to introduce 6 speed front-wheel-drive transmissions in our St. Catharines Glendale Powertrain Facility to serve the vehicle production in the Oshawa Car Plant. Moving from 4 speed transmissions to 6 speed transmissions and the use of cylinder deactivation, direct fuel injection, variable valve timing, turbo charging, and cleaner, more powerful diesel engines are among the powertrain improvements that GM Submitted: February 20, 2009 GMCL Restructuring Plan Page 25 of 52
is utilizing in order to improve the fuel efficiency of its conventional internal combustion engine offerings.
GMCL‟s objective is to become the fuel efficiency leader in each vehicle category where we compete. Liquidity support will help us achieve this goal and help us maintain and sustain a position of environmental leadership among automakers operating in Canada.
VI GM SUPPLIERS IN CANADA
GM purchased over $14 billion from Canadian suppliers and service companies in 2007. This represents approximately half of the total industry‟s parts purchasing from Canadian parts suppliers. Approximately $4 billion of these parts and services are utilized at GMCL‟s facilities and the balance are utilized by GM in North America or globally. As noted in the chart below, GM leads the industry with respect to Canadian and US content for vehicles manufactured in North America.
GM Has Highest US/Canadian Content for Vehicles Manufactured in North America
US/Canadian Content for Vehicles Manufactured in North America1
General Motors 77% Detroit 3 Ford 71% Average 73% Chrysler 67% Toyota 66% Mazda 63% Mercedes-Benz 62% Mitsubishi 61% Honda 61% All Other Nissan 58% Average 55% Suzuki 55% Subaru 54% Hyundai 38% BMW 29% Volkswagen 13%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 12008 US/Canadian content from American Automobile Labeling Act except where only 2009 data is available, volume weighted by Automotive News 2008 North American vehicle production 2US/Canadian content percentage reflects only vehicles produced in North America--for example, Mazda 6 for Mazda and GL, M, and R Class for Mercedes
While it is too soon to accurately predict the impact of the Restructuring Plan on GM‟s Canadian supply chain, GM intends to continue sourcing from competitive and innovative Canadian suppliers. It should be noted that GM and its competitors utilize many of the same suppliers. As a result, a failure of one or more automakers would disrupt the supply chain. GM continues to encourage its competitors in Canada to increase their use of Canadian suppliers as this diversifies supplier risk and helps these excellent Canadian companies focus more resources on innovation which is critical to future competitiveness. Submitted: February 20, 2009 GMCL Restructuring Plan Page 26 of 52
Additionally, GMCL applauds the measure included in the 2009 Federal Budget to assist automotive parts manufacturers by improving their access to credit through accounts receivable insurance offered by Export Development Canada.
The table below shows GM‟s Canadian parts purchases from 1991 through 2007. The decline in purchases from 2005 to 2007 from Canadian suppliers can be attributed largely to two factors: firstly, the appreciation of the Canadian dollar which negatively affected the competitiveness of Canadian suppliers, and secondly, a decline in overall GM production volumes.
GM PURCHASES FROM CANADIAN SUPPLIERS
$20 18.0 17.5 $18 16.4 16.2 16.2 $16 15.0 14.0 14.3 $14
$12 10.5
$10 8.1 8.0 $8 6.7 6.0 $6 4.4 4.4 4.4 3.2
PURCHASES (CAN. $ Billions)PURCHASES $4
$2
$0 1991 1993 1995 1997 1999 2001 2003 2005 2007
YEAR
Information about the location of GM‟s suppliers all across Canada can be found in Appendix G.
VII GMCL DEALERS IN CANADA
GMCL‟s dealerships and retailers employ approximately 33,000 Canadians in communities all across Canada and, particularly in rural communities, are significant local businesses contributing to the vitality of the community. Information about the location of GMCL‟s dealerships and the associated employment can be found in Appendix G.
Dealers and retailers are one of GMCL‟s most important stakeholders and are a critical component of the Restructuring Plan. As the direct link to GMCL‟s vehicle customers, the dealers and retailers are GMCL‟s “Ambassadors” with the customer. The GM Submitted: February 20, 2009 GMCL Restructuring Plan Page 27 of 52
Viability Plan and the GMCL Restructuring Plan contemplate conservative new vehicles sales projections for the coming years which are necessary at a minimum for the plans to succeed. GMCL applauds the initiative included in the 2009 Federal Budget to establish a Secured Credit Facility to purchase term asset-backed securities backed by loans and leases on vehicles and equipment. This Facility, while not yet established and/or defined, may provide much-needed improved access to car loans and dealer financing in Canada at a time when global credit sources are constrained.
GMCL distributes essentially similar vehicles to those in the US through its authorized dealer network. Accordingly, Canadian dealers will be impacted by GMCL‟s focus on the four core brands going forward (Chevrolet, Cadillac, Buick and GMC), consistent with GM Viability Plan. Pontiac will assume a more focused role within the Buick- Pontiac-GMC channel.
For Hummer, several parties have expressed strong interest in purchasing the brand and a decision is expected to be made by the end of the first quarter. If the sale of Hummer cannot be completed, Hummer will operate until its current products are no longer economically viable.
With respect to Saab, GM has conducted a strategic review of its global Saab business and has offered it for sale. GM has developed a specific proposal that would have Saab‟s operations effectively becoming an independent business entity effective January 1, 2010. Please note that on February 20, 2009, Saab Automotive AB filed for reorganization under a self-managed Swedish court process to create a fully independent business entity that would be sustainable and suitable for investment. This reorganization is a self-managed, Swedish legal process headed by an independent administrator appointed by the court who will work closely with the Saab management team.
With respect to Saturn, the Viability Plan states that GM plans to operate Saturn through the end of the existing lifecycle of its products which is expected to be at the end of the 2011 model year. There are no new products currently planned for Saturn. However, GM is open to the possibility that investors may present a plan to “spin-off” or sell the Saturn Distribution Corporation. If such a sale does not occur, it is GM‟s plan to phase out the Saturn brand. More information can be found on page 15 of the GM Viability Plan.
In Canada, there are three dealer channels established as shown in the illustration below. While significant efforts have been expended into combining the Buick, Pontiac and GMC brands into a single network in the US, Canada‟s dealer organization with its three distinct channels is already aligned as shown in the chart below. In addition, in excess of 70% of the Canadian dealer network has invested millions in making improvements to their dealership facilities to ensure compliance with the GMCL “Image Program,” thus positioning them at the forefront of motor vehicle retailing and servicing experience.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 28 of 52
GM Canada – Dealer Organization
3 Channels
48% of GM Dealerships 45% of GM Dealerships 7% of GM Dealerships
(431*) (399*) (61)
Cadillac & Hummer feed into select dealers in these Saab feeds into select channels Saturn dealers
(18) 2% of GM Dealers (129) (28) 15% of GM Dealers 3% of GM Dealers * includes 188 “4-line” dealers (#) – number of dealers
GMCL is narrowing its brand and nameplate focus and will continue to preserve and strengthen the dealer network model in Canada to ensure greater profitability and volumes through fewer and more strategically located dealerships. Since the Canadian network is already aligned as described above, the reduction in the number of Canadian dealers will not follow an identical path to that in the US. In addition, GMCL has been successfully focusing on reducing its dealer network in metropolitan centres over the past few years. Currently, there are over 700 GMCL dealers in Canada, which is a reduction of approximately 15% since 2000. GMCL plans to continue to work closely with its Canadian dealers on further consolidation and rationalization and expects to have 450-500 dealers in Canada by 2014. These efforts will be particularly focused on achieving a viable network configuration in Canada‟s key urban markets. GMCL is not targeting any specific dealer group to meet reduction targets, but rather looking at opportunities for retirements, private capital acquisitions and facilitated consolidations.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 29 of 52
VIII RISKS
As with any business plan, there are many risks or uncontrollable factors that may undermine the timing of delivery, or even the ultimate ability to accomplish that plan. As we review and agree upon further changes to our business, we must identify a range of risks that may impact our forward progress.
Some key risks in this regard include our ability to negotiate and implement changes with the CAW on a timely basis to achieve North American benchmark cost levels and the completion of financial support agreements with the Canadian and Ontario Governments.
Going forward, risks remain including the impact of wide fluctuations in the Canadian dollar and fuel and other commodity prices, relative government supports as set out in the US Energy Bill section 136, and US government consumer incentives for advanced technology vehicles. There is also the possibility of the implementation of disharmonized regulations or trade agreements that disadvantage GM relative to its competitors, which can also have an impact on our Restructuring Plan delivery and GMCL‟s role within GM‟s operations. Most significant is the timing of recovery of the overall North American vehicle demand.
Everyone at GM, including its Canadian management team, is well aware of the consequences of a failure to implement our various restructuring plans. A failure by GM would have a domino effect precipitating failures among component and logistic suppliers, other domestic car manufacturers, raw material suppliers, technology and service providers, dealers, retailers and their suppliers, as well as GM creditors and financial institutions across Canada.
Regionally, the cost of failure in this instance would be enormous. It has been estimated by the Canadian Manufacturing Council that 400,000 jobs in Ontario alone are dependent on the auto sector and at risk. GMCL retirees would be gravely impacted and there would be tremendous additional pressure on Ontario‟s broader pension infrastructure as well as significant social insurance implications for governments at all levels.
In addition, GMCL‟s operations have been vitally important to Canada‟s industrial and knowledge base. No other company has traditionally purchased as many auto parts and services and GMCL is currently ranked the number one company in Canadian research partnership programs and through its Canadian Engineering Centre, GMCL is undertaking leading-edge advanced environmental technology R&D projects in Canada.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 30 of 52
IX CONCLUSION
While the challenges are great, GMCL has developed the Restructuring Plan that will enable it to emerge from the current market crisis as a viable, sustainable company. The Restructuring Plan requires several actions and agreements with GMCL stakeholders that must be accomplished before the end of March 2009.
GMCL has shared and reviewed an exhaustive range of financial and competitive information with the Ontario and Federal governments under appropriate non-disclosure agreements, and information has also been shared with the CAW. All of the key actions in the Restructuring Plan must be taken together to sustain GMCL‟s operations, reduce its structural costs, ensure its competitiveness and refinance its balance sheet to address unsustainable legacy costs. The Restructuring Plan would allow GMCL to reduce and refinance these liabilities to ensure a viable, sustainable future business in Canada. We are prepared to negotiate financing agreements required to complete this Plan.
GMCL‟s Restructuring Plan is also transformative. The benefits of success will include the launch of 5 new GM products, including the production of Canada‟s first hybrid cars, that will maintain Canada‟s proportion of Canadian-US production over the plan period. Working with Canadian universities and suppliers we will set new benchmarks in green technology R&D. Through shared sacrifice, we will secure the pensions of thousands of GM retirees and the jobs of thousands of active employees and dependent workers in GM‟s supply chain. We will sustain GMCL‟s long and rich history in Canada and pay back Canadian taxpayers.
GMCL appreciates its constructive partnerships with the Canadian Federal and Ontario Governments. We look forward to continuing our discussions in this regard and to finalizing the Restructuring Plan with the Canadian and Ontario Governments in March 2009. Submitted: February 20, 2009 GMCL Restructuring Plan Page 31 of 52
X APPENDICES:
Appendix A –
Click here (or visit www.media.gm.com) to access the GM Viability Plan submitted to US Treasury on February 17, 2009.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 32 of 52
Appendix B
This is the full excerpt of the Forward-Looking Statements that were included with the press release that accompanied the GM Viability Plan submitted to US Treasury on February 17, 2009 and applies hereto.
Forward-Looking Statements In this press release and in related comments by our management, our use of the words “expect,” “anticipate,” “ensure,” “promote,” “target,” “believe,” “improve,” “intend,” “enable,” “continue,” “will,” “may,” “would,” “could,” “should,” “project,” “projected,” “positioned” or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Among other items, such factors might include: our ability to comply with the requirements of our credit agreement with the U.S. Treasury; the availability of funding for future loans under that credit agreement; our ability to execute the restructuring plans that we have disclosed, our ability to maintain adequate liquidity and financing sources and an appropriate level of debt; and changes in general economic conditions, market acceptance of our products; shortages of and price volatility for fuel; significant changes in the competitive environment and the effect of competition on our markets, including on our pricing policies, financing sources and an appropriate level of debt; and changes in general economic conditions.
Our most recent reports on SEC Forms 10-K, 10-Q and 8-K provide information about these and other factors, which may be revised or supplemented in future reports to the SEC on those forms.
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Appendix C
Key Facts About GM’s Transformation for Long-term Success
Fact: GM is building compelling, high-quality cars and trucks for our customers
General Motors is the best-selling automaker in the U.S. with a share of 22.1% (2.8 million vehicles v. 2.1 million Toyota vehicles) and leads Toyota in 20 of the top 22 global markets (Toyota only leads in Japan and Australia markets).
GM is the largest seller of vehicles in Canada selling almost 360,000 vehicles in 2008, approximately 20% of Canadian sales.
Chevrolet Malibu was up a solid 20.7% in December 2008 and 78.5% for the year in Canada - leading GM‟s 35.8% gain for the year in the mid-size segment. Key competition: the Toyota Camry was down 12.8% and Accord grew by only 2.4%.
Chevy has been the Number One selling US brand in two out of the last four years. o Impala is the Number One selling domestic car. Between Impala and Malibu, Chevy sold almost a half-million cars last year.
Chevy has won more than 260 media/industry awards worldwide since the 2006 model year.
The Chevy Malibu was awarded the 2008 Car of the Year among international automotive journalists. The second consecutive year a GM vehicle has won this prestigious award (Saturn Aura won in 2007).
The Cadillac CTS was named Motor Trend‟s 2008 Car of the Year.
Prior to the current economic crisis, incentive spending was down and overall retail transaction prices were up over an average of US$4,000 per vehicle for new products such as the Chevrolet Malibu, Cadillac CTS, and family of crossover vehicles.
Buick Enclave, GMC Acadia, Chevrolet Traverse, and Saturn Outlook lead in quality, fuel efficiency and sales among this growing crossover segment.
The Pontiac Vibe, AJAC's award winning Best New Small Car under $18,000, saw strong gains in Canada up 34.2% in 2008.
GM unveiled the 2010 Chevrolet Equinox compact crossover, the 2010 Buick Allure/ LaCrosse sedan and the 2010 Cadillac SRX mid-size luxury crossover at the North American International Auto Show (NAIAS).
GM recently announced plans to sell the Chevrolet Spark micro-car and the Chevrolet Orlando seven-seat multi-purpose vehicle in the U.S. in 2011.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 34 of 52
Fact: GM is working with our business partners to restructure the business and reduce costs...
The UAW suspended the Jobs Bank program, effective Feb. 2, and agreed to execute another Special Attrition Program. These actions are important steps to improving GM‟s viability.
Discussed plans to consolidate and reduce the number of GM dealers by approximately 400 per year through 2012 with GM dealers at the National Automotive Dealers Association‟s annual meeting.
Announced plans to rationalize our number of brands and models, and strategic reviews are well underway and making progress on these efforts.
Announced that GM will reduce salaried employment globally by approximately 10,000 people (approximately 3,400 in the U.S.) in 2009, and will temporarily reduce pay for a majority of U.S. salaried employees.
Announced the restructuring of the global powertrain group to integrate its functional activities into their respective global GM functions.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 35 of 52
Fact: GM is committed to reducing fuel consumption and emissions by bringing advanced technology vehicles to market
Chevy Volt, GM‟s extended range electric vehicle, will go up to 40 miles before using any gas and is scheduled for production in late 2010.
GM offers 19 vehicles that get 30 mpg or more on the highway…more than any other automaker.
By mid-2009, GM will have 9 hybrid models in the market…more than any other automaker.
GM‟s Canadian Engineering Centre in Oshawa, ON was selected to assemble the world‟s largest fleet of hydrogen fuel-celled powered Chevrolet Equinoxes as part of GM‟s Project Driveway
Chevy Traverse is the most fuel efficient 8 passenger crossover with EPA estimated 24 mpg highway.
Unveiled the Cadillac Converj concept extended range electric vehicle, which shows how the Voltec propulsion system can be applied to other GM products in various vehicle segments. The Converj won most of the top concept design awards at the 2009 NAIAS.
Announced that GM will be the first major automaker to establish a lithium-ion battery pack manufacturing facility in the U.S., and that GM will build the world‟s largest advanced battery testing facility in Michigan.
Announced that GM will work with Washington D.C. and other key cities to help prepare infrastructure for plug-in electric vehicles such as the Chevy Volt.
GM has over 2 million bio-fuel capable (e85) vehicles on the US roads today, and offers more bio-fuel capable vehicles than any other automaker.
Every Chevy SUV and pickup is available with an EPA estimated 20 MPG hwy or better. Toyota and Ford can‟t say that.
Received “Green Car Vision” award from Green Car Journal (Chevy Volt) at the Washington D.C. auto show.
Recognized by GreenerCars.org for having three vehicles (Pontiac G5 XFE, Chevy Cobalt XFE and Aveo) with the highest “Green Scores” overall in the American Council for an Energy-Efficient Economy‟s Green Book Online for Model Year 2009.
First to bring a hybrid full-size SUV and pickup truck to market.
The Automobile Journalists Association of Canada (AJAC) recognized GM‟s Two-Mode Hybrid technology with the inaugural Best New Green Technology Award for 2009.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 36 of 52
Fact: North American automotive companies build quality products...
During the past seven years, the General Motors Oshawa Plant has received four Gold and two Silver Awards for plant quality in North America in the annual J.D. Power and Associates Initial Quality Study
In 2008, GM‟s Oshawa Car Plant was recognized with the prestigious J.D. Power and Associates “Founder‟s Award” in recognition of their commitment to quality excellence and a solid track record of industry leading performance.
Silverado & Malibu -- #1 in J.D. Power Initial Quality in their segments
Received “Best Sport Sedan” award (Cadillac CTS) from PBS‟ Motorweek TV show for the second straight year.
Received Overall Manufacturer honors in R.L. Polk‟s annual Automotive Loyalty Awards competition for the ninth straight year. Also received awards for several Chevy vehicles (Silverado, Suburban, Impala, Corvette).
Received “Family Car of the Year” award from motherproof.com/cars.com (Buick Enclave) at the Washington, D.C. auto show.
GM‟s brands (Cadillac, Chevrolet, Buick, Pontiac), representing 80 percent of our total volume, are ranked above industry average as measured by 2008 J.D. Power Initial Quality.
GM and Ford tied for the leadership position in the 2008 J.D. Power Initial Quality Study – 11 models ranked in the top three of their respective segments.
Chevrolet Malibu beats the imports…
o Industry‟s best launch (J.D. Power) and a “Recommended Buy” from Consumer Reports; o Segment award winner in the ultra-competitive midsize segment, beating out the Toyota Camry, Honda Accord and Nissan Altima; o Malibu alone has won 30+ awards for product excellence
Since 2002 GM has earned 65 percent of all J.D. Power North/South America assembly plant quality awards (more than all other manufacturers combined)
Submitted: February 20, 2009 GMCL Restructuring Plan Page 37 of 52
Fact: GM autoworkers can compete with non-union import transplants…
As measured by the latest independent Harbour Report for Productivity:
GM vehicle assembly plants led in 11 of 20 North American assembly plant segments in which it competes--the most of any manufacturer. GM‟s Oshawa Car Plant has set industry benchmarks in the area of productivity, placing within the top three plants across North America in each of the last six years. GM has three of the top 10 assembly plants in North America. GM has two of the top ten stamping plants in North America, based on the Stamping Index. GM has five of the top 10 engine plants in North America.
Fact: The current economic crisis affects all automakers, not just “Detroit”…
Toyota expects to lose $3.85 billion at the end of this fiscal year, the first loss since 1950. Since March, Toyota has reduced its temporary workforce in Japan from 9,000 workers to 3,000.
Nissan is cutting 20,000 jobs and predicts its first annual loss in nine years. CEO Carlos Ghosn said the latest problems are industry wide and due to the global economic crisis.
Mercedes recently offered a buyout to its entire workforce in Alabama. Hyundai‟s Alabama factory is still not up to full capacity. In addition to company-wide buyout offers and substantial layoffs, Nissan is converting its factory in Smyrna, TN to build commercial vehicles.
Toyota has been forced to shut its Texas truck plant because of few orders for the new Tundra.
The Ssangyong Motor Co., the ailing Korean automaker, and its Chinese majority shareholder, the SAIC Motor Corp , are seeking help from the South Korean government to stave off a collapse of the company.
Hyundai Motor Co has cut shifts at its India plant cope with plunging demand.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 38 of 52
Fact: Other governments are providing financial support to the automotive industry during this crisis...
Europe
Austria: Scrappage incentive of €1,500 for trade-in of 13-year-old vehicle for new product meeting Euro 4 standard France: €6 billion in “soft loans” for PSA & Renault with aid linked to commitment not to relocate production jobs abroad; €500 million in loans to Renault Truck and other automakers; €1 billion loan facility for PSA & Renault financing arms; scrappage program (€1,000 incentive per vehicle) Germany: €1.5 billion support package that includes loan guarantees and a scrappage program (up to €2,500 per vehicle) Italy: Scrappage incentive of €1,500 incentive for trade-in of vehicles over 10 years of age Portugal: €900 million in trade credit insurance, lines of credit for vehicle manufacturers and suppliers, incentives to boost vehicle sales, and worker training; scrappage incentive of €1,000 for 10-year old vehicles and €1,500 for 15-year old vehicles Romania: One-year exemption from pollution tax for new vehicles; scrappage incentive of €800 for 10-year old vehicles (maximum of 60,000 cars scrapped) Russia: Tariffs on imported used cars raised to protect domestic auto producers Spain: €800 million in federal aid in addition to state support for individual automakers; scrappage incentive of interest-free loans up to €10,000 when trading-in 10-year old vehicle for new low emission product Sweden: $3.4 billion in state-backed loans and credit guarantees from the European Investment Bank; funding for R&D United Kingdom: $3.2 billion in loans to automakers and suppliers to develop “green technologies”
North America
Canada: $4.0 billion in fully repayable loans offered to GM & Chrysler from federal and Ontario governments; scrappage program ($300 incentive per vehicle) United States: $13.4 billion in low interest loans to GM and $4 billion to Chrysler; GMAC became a bank holding company and received a capital infusion of $6 billion and Chrysler Financial received a $1.5 billion government loan
Latin America
Argentina: $890 million credit line to subsidize consumer purchases of 100,000 new vehicles; additional credit line for purchase of new taxis, light commercial vehicles and trucks Brazil: $1.8 billion credit injection to promote auto retail financing; government of Sao Paulo providing additional $1.8 billion in retail financing support; reduction in value- added tax for new vehicles
Submitted: February 20, 2009 GMCL Restructuring Plan Page 39 of 52
Asia Pacific
Australia: An additional AU$3.4 billion brings federal support for the auto industry to AU$6.2 billion for 2009-2020 in the form of incentives for local investment and an R&D incentive for “green technology”; new AU$2 billion fund to improve liquidity for auto dealers China: One-year reduction in excise taxes on small vehicles; $750 million scrappage program targeting 3-wheeled and old trucks; $1.5 billion to automakers to upgrade technology and develop alternative energy vehicles; $1.4 billion loan to Chery Automobile Company India: Reduction in excise tax applied to new vehicle purchases Japan: Government providing wage support for companies to keep idle employees on company payrolls South Korea: Six-month reduction in special excise tax on new vehicles; government support for worker training
Submitted: February 20, 2009 GMCL Restructuring Plan Page 40 of 52
Appendix D
GMCL Company Profile:
Company Name: General Motors of Canada Limited (“GMCL”)
Location: 1908 Colonel Sam Drive, Oshawa, Ontario (Headquarters). Manufacturing operations in Ontario in Oshawa, St. Catharines, Windsor, and Ingersoll (CAMI Automotive – 50/50 Joint Venture with Suzuki Motor Corporation). Non-manufacturing operations are located in Langley, BC, Calgary and Edmonton, AB, Pointe Claire, PQ, and Woodstock, ON. The Canadian Engineering Centre is located in Oshawa and linked with a cold-weather development centre in Kapuskasing, ON.
Business Activities: Automobile and auto component manufacturing, marketing and distribution. GMCL employs 12,000 hourly and salaried workers1, making it one of the largest private employers in Canada. GMCL is Canada‟s largest automotive exporter, with over 85% of vehicle production being exported.
GMCL Revenue: GMCL‟s annual revenues and profits are consolidated with its parent, GM, and reported globally.
GMCL Sales: GMCL sold over 350,000 vehicles in 2008 or approximately 22% of Canadian sales.
GMCL Production: GMCL and CAMI produced over 570,000 vehicles in 2008.
GMCL Exports: GMCL and CAMI exported over $12.2 billion in vehicles and parts in 2008. Over 85% of vehicle production is exported.
Business Structure: GMCL is a Canadian corporation and a wholly-owned subsidiary of General Motors Corporation (“GM” or “General Motors”). GMCL has business dealings in manufacturing, vehicle sales, engineering & product planning, service parts and aftermarket operations.
1 Employment number as at December 31, 2008. Please note that the employment quoted has not been calculated using the terms agreed upon in previous partnership arrangements, such as the Beacon Project. Submitted: February 20, 2009 GMCL Restructuring Plan Page 41 of 52
Appendix E
Chronology of Recent GMCL Restructuring Changes:
On April 28, 2008, GMCL announced the elimination of one shift of production at its full- size pickup truck assembly plant in Oshawa, Ontario to take place effective September 2008. The decision was made as part of the parent company‟s corporate strategy to bring North American truck production capacity more in line with market demand. Several other US plants were also affected.
On May 12, 2008, GMCL announced that it would cease operation of the Windsor Transmission Plant in the second quarter of 2010, when the current four-speed front- wheel drive transmission production mandate is completed. The decision was made as a result of a shift in the market away from the four speed transmissions made at the plant, towards new, fuel efficient six speed transmissions.
On May 15, 2008, GMCL reached a tentative agreement for a new 3 year collective agreement with the CAW, which was ratified by members on May 16, 2008.
On June 3, 2008, GMCL announced that it would cease operation of the Oshawa Truck Plant in 2009. The decision was made as part of the parent company‟s overall corporate strategy to address the rapidly declining market for trucks and SUVs in the US market.
On July 15, 2008, General Motors announced further actions to bolster liquidity by $15 billion through operating and other actions as well as asset sales and financing activities. This announcement referenced the necessary reductions in truck production in North America and the need for additional reductions going forward.
On July 23, 2008, GMCL announced that Parts Distribution Centres in Edmonton, Alberta would be offered for sale with the intention to lease the facilities back, thereby raising needed cash to redeploy in the business. (A similar announcement about the Parts Distribution Centre in Woodstock, Ontario was made on August 12, 2008). GMCL had previously consolidated the activities of the Moncton Parts Distribution Centre into the facility located in Pointe Claire, Quebec. Similarly, the operations of the Winnipeg, Manitoba Parts Distribution Centre had been previously consolidated into the facility located in Edmonton, Alberta.
On July 28, 2008, GMCL announced a Memorandum of Understanding with the CAW that confirmed the Oshawa Truck Plant closure for July 1, 2009, the program of supports for those employees affected by the closing and a shared vision for new car production at Oshawa Car going forward.
On July 29, 2008, GMCL indicated that it would, like some other manufacturers, suspend supporting lease rates on August 1, 2008.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 42 of 52
On August 7, 2008, GMCL held its Annual Beacon Review with Ontario and Federal Government representatives to report on project progress to date.
On September 5, 2008, GMCL announced its intention to proceed with the Revised Pathways Project via an exchange of letters between the Federal and Ontario Governments and GMCL. The Revised Pathways Project includes investments in 6 speed front-wheel-drive transmission capacity at St. Catharines, the production of a hybrid car at Oshawa Car, and $40 million in advanced environmental technology R&D projects through GMCL‟s Canadian Engineering Centre by 2013.
On November 7, 2008, GM announced its 2008 third quarter results and additional cost reductions and liquidity actions that in conjunction with previously announced actions would deliver $20 billion in improved liquidity by the end of 2009. As part of this announcement, Oshawa Car will reduce its production rate for the Chevrolet Impala effective January 2009 placing 500 employees on temporary layoff.
On November 14, 2008, GMCL notified employees that the St. Catharines Ontario Street Powertrain Facility would place approximately 400 employees on a temporary one-week layoff staring November 17, 2008 and approximately 840 employees on a temporary one-week layoff starting November 24, 2008.
On November 20, 2008, GMCL notified employees that the Oshawa Truck Plant would cease production in May 2009 based on current market projections. Additionally, downtime is scheduled at the Oshawa Truck plant during the weeks of January 5, March 2, March 9 and March 16.
On December 2, 2008, GM delivered its Restructuring Plan for Long-Term Viability to US Congress.
On December 2, 2008, GMCL announced that Windsor Transmission would undergo a minor de-rate effective January 12, 2009. The de-rate would result in approximately 200 employees being placed on temporary lay-off on a rotating schedule. (This de-rate did not ultimately take place.)
On December 4, 2008, GMCL notified employees that effective February 9, 2009, the Oshawa Car Plant will run production for the Chevrolet Impala on two shifts rather than three and that the rate of production would be reduced. This change will place 700 employees on temporary layoff. It was also announced that the start of production of the first mid-sized car at Oshawa Car would be delayed from 2010 to late 2011.
On December 8, 2008, GMCL notified employees at the St. Catharines Ontario Street Powertrain Facility that they would be on temporary layoff the weeks of December 15, December 22, January 5 and January 12. GMCL also announced that a portion of employees at the St. Catharines Glendale Powertrain Facility would be on temporary layoff the weeks of December 15, December 22, January 5 and January 12. Additionally, as a result of the delay in the start of production of the first mid-sized car at Oshawa Car, the start of production of the 6 speed front-wheel-drive transmission would be delayed until mid-2012. Submitted: February 20, 2009 GMCL Restructuring Plan Page 43 of 52
On December 12, 2008, GMCL notified employees that in addition to the previously announced weeks of January 5 and 12, the Oshawa Car Plant would be closed the weeks of January 19, 26, and February 2.
In early February 2009, GMCL announced that Windsor Transmission would take a downweek starting February 16, 2009 resulting in the temporary layoff of 1,000 employees. Windsor Transmission will further reduce its daily output upon the resumption of production on February 23, 2009 resulting in approximately 400-425 employees being placed on temporary layoff on a rotating schedule.
On February 10, 2009, GM announced it would reduce its global salaried employment by 10,000. On the same day, it was announced a temporary pay reduction for salaried executives and a majority of employees. This reduction will be effective May 1, 2009 through the end of 2009 when it will be reviewed.
On February 17, 2009, GM submitted the GM Viability Plan to US Treasury.
Submitted: February 20, 2009 GMCL Restructuring Plan Page 44 of 52
Appendix F
Quality and Productivity Leadership:
During the past seven years, the General Motors Oshawa Plant has received four Gold and two Silver Awards for plant quality in North America in the annual J.D. Power and Associates Initial Quality Study and a string of segment leading vehicle awards.
In 2008, GM‟s Oshawa Car Plant was recognized with the prestigious J.D. Power and Associates “Founder‟s Award” in recognition of their commitment to quality excellence and a solid track record of industry leading performance. The Founder‟s Award is a discretionary award presented by J.D. Power and Associates, recognizing individuals or companies that demonstrate dedication, commitment and sustained improvement in serving customers. In the 40-year history of J.D. Power and Associates, only 22 companies or individuals have previously received the award.
This Canadian plant is also setting industry benchmarks in the area of productivity, placing within the top three plants across North America according to the Harbour & Associates productivity report in each of the last six years.
Oshawa Car Plant’s Quality Track Record: 2008 Pontiac Grand Prix was recognized as the Highest Ranked Large Car in Initial Quality 2007 Line #2 received the J.D. Power and Associates Silver Plant Quality Award, North/South America Pontiac Grand Prix was recognized as Highest Ranked Large Car in Initial Quality 2006 Line # 2 received the J.D. Power and Associates Gold Award for the Best Quality Assembly Plant in North and South America Pontiac Grand Prix was recognized as the Highest Ranked Large Car in Initial Quality Chevrolet Monte Carlo was recognized with a J.D. Power APPEAL Award 2005 Line # 2 received the J.D. Power and Associates Gold Plant Quality Award, North/South America Line #1 received the J.D. Power and Associates Silver Plant Quality Award, North/South America Oshawa swept the Premium Midsize segment, with the Buick Century recognized as “Best in Segment” Buick LaCrosse/Allure was recognized as the “Best Launch Vehicle” 2004 Buick Century recognized as the Highest Ranked Premium Midsize Car in Initial Quality Submitted: February 20, 2009 GMCL Restructuring Plan Page 45 of 52
2003 Line #1 received the J.D. Power and Associates Gold Plant Quality Award, North/South America 2002 Line # 2 received the J.D. Power and Associates Gold Plant Quality Award, North/South America Buick Century recognized as the Best Premium Midsize Car in Initial Quality
Submitted: February 20, 2009 GMCL Restructuring Plan Page 46 of 52
Appendix G – GM Suppliers and GMCL Dealers in Canada Over 700 GM Dealers Employing 33,000 Canadians
City # Dealers # Employees City # Dealers # Employees City # Dealers # Employees PQ ACTON VALE 1 19 SOREL-TRACY 2 41 HAGERSVILLE 1 14 ALMA 1 51 ST-ANSELME 1 15 HALIBURTON 1 32 AMOS 1 30 STE-AGATHE-DES-MONTS 1 19 HAMILTON 7 293 AMQUI 1 2 STE-ANNE-DE-BEAUPRE 1 40 HANOVER 1 16 BAIE-COMEAU 1 36 STE-FOY 2 88 HARRISTON 1 14 BERTHIERVILLE 1 32 STE-MARIE 1 23 HAWKESBURY 1 47 BLAINVILLE 2 135 ST-FELICIEN 1 18 HEARST 1 15 BONAVENTURE 1 13 ST-GEORGES-EST 1 36 HUNTSVILLE 1 25 BROSSARD 2 136 ST-LIN-LAURENTIDES 1 19 INGERSOLL 1 43 CAP-AUX-MEULES 1 9 ST-RAYMOND 1 33 KAPUSKASING 1 51 CHANDLER 1 22 ST-REMI 1 47 KEMPTVILLE 1 30 CHATEAUGUAY 2 58 THETFORD MINES 1 20 KENORA 1 29 CHIBOUGAMAU 1 22 TROIS-PISTOLES 1 14 KILLALOE 1 12 CHICOUTIMI 2 93 TROIS-RIVIERES 2 98 KINCARDINE 1 24 COATICOOK 1 16 TROIS-RIVIERES-OUEST 1 17 KINGSTON 3 144 COWANSVILLE 2 38 VAL D'OR 2 91 KIRKLAND LAKE 1 15 DELSON 1 36 VALLEE JONCTION 1 27 KITCHENER 3 178 DESCHAILLONS 1 24 VALLEYFIELD 1 37 LEAMINGTON 1 20 DOLBEAU-MISTASSINI 1 21 VARENNES 1 37 LINDSAY 2 82 DONNACONNA 1 21 VAUDREUIL 1 28 LISTOWEL 2 73 DRUMMONDVILLE 4 81 VERDUN 2 108 LONDON 6 408 GASPE 1 30 VICTORIAVILLE 2 44 LUCAN 1 8 GATINEAU 5 182 VILLE DE LAVAL 2 137 MANOTICK 1 12 GRANBY 3 100 VILLE LASALLE 1 84 MARKHAM 2 88 ILE-PERROT 1 48 VILLE SAINT-LAURENT 1 24 MERLIN 1 9 JOLIETTE 2 82 WAKEFIELD 1 14 MIDLAND 2 92 JONQUIERE 2 86 PQ Total 150 5219 MILTON 2 65 LA GUADELOUPE 1 13 ON AGINCOURT 1 58 MISSISSAUGA 6 418 LA MALBAIE 1 16 AJAX 2 90 MORRISBURG 1 33 LA SARRE 1 40 ALLISTON 2 41 NAPANEE 1 19 LA TUQUE 1 13 AMHERSTBURG 2 43 NEPEAN 1 67 LAC MEGANTIC 1 17 ARNPRIOR 1 48 NEW HAMBURG 1 54 LAC-ETCHEMIN 2 20 AURORA 2 105 NEW LISKEARD 1 44 LACHENAIE 2 83 AYLMER 1 11 NEWMARKET 1 55 LAPRAIRIE 1 41 BANCROFT 1 29 NIAGARA FALLS 2 83 LAURIER-STATION 1 19 BARRIE 2 193 NORTH BAY 3 115 LAVAL 1 37 BELLEVILLE 3 99 OAKVILLE 3 132 LEVIS 3 111 BLENHEIM 1 18 ORANGEVILLE 2 87 LOUISEVILLE 1 26 BLIND RIVER 1 26 ORILLIA 1 56 MACAMIC 1 18 BOLTON 1 25 ORLEANS 2 165 MAGOG 2 33 BOWMANVILLE 1 47 OSHAWA 2 204 MANIWAKI 2 56 BRACEBRIDGE 1 45 OTTAWA 9 711 MASCOUCHE 1 35 BRAMPTON 4 236 OWEN SOUND 2 55 MATANE 1 36 BRANTFORD 2 86 PAISLEY 1 16 MCMASTERVILLE 1 35 BROCKVILLE 1 44 PARIS 1 22 MONT-LAURIER 2 23 BRUSSELS 1 10 PARRY SOUND 1 19 MONTMAGNY 1 47 BURLINGTON 4 211 PEMBROKE 1 62 MONTREAL 5 304 CALEDONIA 1 24 PERTH 1 30 MONT-TREMBLANT 2 31 CAMBRIDGE 2 110 PETERBOROUGH 3 123 NAPIERVILLE 1 2 CAMPBELLFORD 1 26 PETROLIA 1 24 NEW RICHMOND 1 21 CARLETON PLACE 1 44 PICKERING 3 133 NICOLET 1 32 CASSELMAN 1 36 PORT COLBORNE 1 24 NOTRE-DAME-DU-LAC 1 23 CHATHAM 2 67 PORT HOPE 2 69 PIEDMONT 1 18 COBOURG 2 65 PORT PERRY 1 21 PLESSISVILLE 1 30 COLBORNE 1 11 PRESCOTT 1 32 QUEBEC 2 62 COLLINGWOOD 1 34 RENFREW 1 28 QUEBEC CITY 1 48 CORNWALL 2 76 REXDALE 1 77 RAWDON 1 27 COURTICE 1 74 RICHMOND HILL 2 125 REPENTIGNY 1 52 DRESDEN 1 8 RODNEY 1 13 RICHMOND 1 30 DRYDEN 1 45 SARNIA 2 92 RIMOUSKI 2 57 DUNNVILLE 1 10 SAULT STE. MARIE 2 76 RIVIERE-DU-LOUP 1 28 DURHAM 1 7 SCARBOROUGH 4 336 RIVIERE-ROUGE 1 4 ELGIN 1 8 SEAFORTH 1 6 ROBERVAL 1 18 ELORA 1 34 SIMCOE 2 64 ROUYN-NORANDA 1 72 ESPANOLA 1 27 SIOUX LOOKOUT 1 18 SAINTE-JULIE 1 64 ESSEX 2 43 SMITHS FALLS 1 32 SAINTE-MARTINE 1 21 ETOBICOKE 1 67 ST. CATHARINES 3 159 SAINTE-THERESE 1 60 EXETER 1 61 ST. MARYS 1 23 SAINT-EUSTACHE 2 80 FENELON FALLS 1 4 ST. THOMAS 1 65 SAINT-HUBERT 2 109 FERGUS 1 13 STOUFFVILLE 1 15 SAINT-HYACINTHE 2 81 FONTHILL 1 32 STRATFORD 1 39 SAINT-JEAN-SUR-RICHELIEU 2 76 FORT FRANCES 1 24 STRATHROY 2 64 SAINT-JEROME 2 82 GANANOQUE 1 51 STURGEON FALLS 1 15 SAINT-LAURENT 2 220 GEORGETOWN 1 28 SUDBURY 5 175 SAINT-LEONARD 1 55 GLOUCESTER 1 74 SUNDRIDGE 1 19 SENNETERRE 1 15 GODERICH 1 29 TECUMSEH 1 13 SEPT-ILES 1 53 GREEN VALLEY 1 36 TERRACE BAY 1 22 SHAWINIGAN 1 19 GRIMSBY 2 76 THESSALON 1 10 SHERBROOKE 3 128 GUELPH 2 123 THORNHILL 3 336
Submitted: February 20, 2009 GMCL Restructuring Plan Page 47 of 52
THUNDER BAY 2 104 NORTH BATTLEFORD 2 60 AIRDRIE 1 44 TILBURY 3 66 OUTLOOK 1 9 ATHABASCA 1 21 TILLSONBURG 2 47 PRINCE ALBERT 1 81 BONNYVILLE 1 34 TIMMINS 2 87 REGINA 5 350 BROOKS 1 30 TORONTO 11 640 ROSETOWN 1 57 CALGARY 12 1153 TRENTON 1 64 SASKATOON 4 295 CAMROSE 2 56 UNIONVILLE 1 49 SHAUNAVON 1 16 CANMORE 1 21 UXBRIDGE 1 74 SHELLBROOK 1 27 CLARESHOLM 1 12 VAUGHAN 1 53 STRASBOURG 1 8 COLD LAKE 1 28 VIRGIL 1 50 SWIFT CURRENT 1 50 CORONATION 1 6 WALKERTON 1 31 TISDALE 1 19 DEVON 1 30 WALLACEBURG 1 28 UNITY 1 17 DRAYTON VALLEY 1 46 WATERLOO 2 144 WADENA 1 18 DRUMHELLER 1 31 WAWA 1 16 WATROUS 1 79 EDMONTON 12 919 WELLAND 2 104 WEYBURN 1 43 EDSON 1 38 WHITBY 3 245 YORKTON 2 74 FAIRVIEW 1 20 WILLOWDALE 1 46 SK Total 43 1693 FORT MACLEOD 1 21 WINDSOR 5 272 YT WHITEHORSE 1 30 FORT MCMURRAY 1 162 WINGHAM 1 11 YT Total 1 30 FORT SASKATCHEWAN 1 32 WOODBRIDGE 2 70 PE CHARLOTTETOWN 3 86 GRANDE PRAIRIE 2 144 WOODSTOCK 1 62 SUMMERSIDE 1 34 HANNA 1 23 ON Total 260 11619.57 PE Total 4 120 HARDISTY 1 13 MB ALTONA 1 31 BC 100 MILE HOUSE 1 29 HIGH LEVEL 1 21 ARBORG 1 21 ABBOTSFORD 1 88 HIGH PRAIRIE 1 230 BEAUSEJOUR 1 28 BURNABY 1 165 HIGH RIVER 1 29 BRANDON 2 124 CAMPBELL RIVER 2 60 HINTON 1 15 CARBERRY 1 7 CASTLEGAR 1 30 INNISFAIL 1 31 DAUPHIN 1 56 CHILLIWACK 1 173 LACOMBE 1 31 ELIE 1 21 COQUITLAM 2 158 LEDUC 2 76 ERICKSON 1 13 COURTENAY 2 67 LETHBRIDGE 3 173 GIMLI 1 21 CRANBROOK 1 64 LLOYDMINSTER 1 45 KILLARNEY 1 19 DAWSON CREEK 2 80 MEDICINE HAT 2 187 MELITA 1 16 DUNCAN 1 65 OKOTOKS 1 46 NEEPAWA 1 20 FERNIE 1 15 OLDS 1 34 PORTAGE LA PRAIRIE 1 42 FORT ST. JOHN 1 77 PEACE RIVER 1 50 ROBLIN 1 19 HOPE 1 25 PINCHER CREEK 1 24 ROSENORT 1 19 HOUSTON 1 29 PONOKA 1 19 SELKIRK 1 45 KAMLOOPS 3 141 RED DEER 3 149 ST. ADOLPHE 1 14 KELOWNA 3 146 REDWATER 1 23 STEINBACH 1 70 KIMBERLEY 1 29 RIMBEY 1 29 SWAN RIVER 1 27 LANGLEY 1 78 ROCKY MTN HOUSE 1 56 THE PAS 1 27 MERRITT 1 31 SHERWOOD PARK 1 97 THOMPSON 1 28 NANAIMO 2 183 SLAVE LAKE 1 31 VIRDEN 1 51 NORTH VANCOUVER 1 70 SMOKY LAKE 1 11 WINKLER 2 66 PARKSVILLE 1 40 SPRUCE GROVE 1 72 WINNIPEG 9 854 PENTICTON 2 97 ST. ALBERT 1 81 MB Total 34 1638 PORT ALBERNI 1 32 ST. PAUL 1 40 NB BATHURST 2 46 PORT COQUITLAM 1 56 STETTLER 1 32 CAMPBELLTON 1 27 PORT HARDY 1 22 STONY PLAIN 1 57 DALHOUSIE 1 26 POWELL RIVER 1 19 STRATHMORE 1 29 EDMUNDSTON 2 55 PRINCE GEORGE 2 130 SUNDRE 1 24 FREDERICTON 3 114 PRINCE RUPERT 1 15 TABER 2 38 GRAND FALLS 2 46 QUESNEL 1 19 THREE HILLS 1 14 MIRAMICHI 2 41 RICHMOND 3 225 VEGREVILLE 1 26 MONCTON 3 209 SALMON ARM 1 36 VERMILION 1 23 REXTON 1 18 SECHELT 1 25 WAINWRIGHT 1 23 SAINT JOHN 3 163 SMITHERS 1 28 WESTLOCK 1 63 SHEDIAC 1 4 SQUAMISH 1 31 WETASKIWIN 2 75 ST. STEPHEN 1 24 SURREY 5 299 WHITECOURT 1 31 SUSSEX 1 24 TERRACE 1 37 AB Total 92 6365 TRACADIE-SHEILA 1 40 TRAIL 1 25 NS AMHERST 2 58 WOODSTOCK 2 43 VANCOUVER 2 306 ANTIGONISH 2 61 NB Total 26 880 VERNON 2 87 BRIDGEWATER 1 36 SK ASSINIBOIA 1 34 VICTORIA 4 169 DARTMOUTH 3 312 CARLYLE 1 25 WILLIAMS LAKE 1 31 DIGBY 1 20 ESTEVAN 1 47 BC Total 65 3531 GLACE BAY 1 18 ESTON 1 15 NF BAY ROBERTS 1 29 HALIFAX 3 212 FORT QU'APPELLE 1 23 BURIN 1 35 LIVERPOOL 1 18 HUDSON BAY 1 6 CARBONEAR 1 40 MIDDLETON 1 42 HUMBOLDT 1 39 CHANNEL-PORT AUX BAS 1 18 NEW GLASGOW 2 62 KINDERSLEY 1 20 CLARENVILLE 2 62 NEW MINAS 2 54 KIPLING 1 15 CORNER BROOK 1 60 SYDNEY 2 75 LANGENBURG 1 14 GANDER 1 35 TRURO 2 65 LLOYDMINSTER 1 56 GOOSE BAY, LABRADOR 1 47 WINDSOR 1 24 MAPLE CREEK 1 14 GRAND FALLS 1 36 YARMOUTH 1 71 MEADOW LAKE 1 27 LABRADOR CITY 1 27 NS Total 25 1127 MELFORT 1 19 ST JOHN'S 1 180 NT YELLOWKNIFE 1 28 MELVILLE 1 32 ST. ANTHONY 1 43 NT Total 1 28 MOOSE JAW 1 68 ST. JOHN'S 2 125 Grand Total 716 32988 MOOSOMIN 1 17 NF Total 15 738 NIPAWIN 1 21 AB ACME 1 1448
Submitted: February 20, 2009 GMCL Restructuring Plan Page 48 of 52
GM buys $14.3B from 3000 CDN Suppliers Per Year
City # Suppliers City # Suppliers City # Suppliers AB AIRDRIE 1 NS AMHERST 1 ELORA 2 ALIX 1 BAYSIDE 1 ERIN 1 CALGARY 46 BRIDGEWATER 1 ESSEX 4 CAMROSE 2 DARTMOUTH 9 ETOBICOKE 2 CANMORE 1 EASTERN PASSAGE 1 EXETER 1 EDMONTON 50 ENFIELD 1 FENELON FALLS 1 GRANDE PRAIRIE 4 HALIFAX 18 FENWICK 1 HANNA 1 INUVIK 1 FERGUS 1 INNISFAIL 1 MIDDLE SACKVILLE 1 FLESHERTON 1 KANANASKIS 1 NEW MINAS 1 FONTHILL 1 LETHBRIDGE 4 NORTH SYDNEY 1 FORT ERIE 1 NISKU 1 STELLARTON 1 GANANOQUE 4 PEACE RIVER 1 SYDNEY 1 GEORGETOWN 4 RED DEER 4 YELLOWKNIFE 1 GLOUCESTER 1 SHERWOOD PARK 2 NS Total 39 GORE BAY 1 ST ALBERT 1 ON ACTON 2 GORMLEY 3 WHITECOURT 1 AJAX 16 GRAFTON 1 AB Total 122 ALLANBURG 3 GRAND BEND 1 BC ABBOTSFORD 5 ALLISTON 3 GRAND VALLEY 1 ALDERGROVE 5 AMHERSTBURG 2 GREELY 1 BURNABY 11 ANCASTER 3 GREEN VALLEY 1 CAMPBELL RIVER 1 APPIN 1 GRIMSBY 5 COQUITLAM 3 ARISS 1 GUELPH 37 COURTENAY 1 ARNPRIOR 1 HALEY STATION 2 DELTA 4 ARTHUR 1 HALIBURTON 2 DUNCAN 1 ASHBURN 1 HAMILTON 49 KAMLOOPS 1 AURORA 12 HANNON 1 KELOWNA 5 AYR 4 HANOVER 1 LANGLEY 9 BARRIE 11 HARROW 2 MAPLE RIDGE 1 BEAMSVILLE 4 HASTINGS 1 NANAIMO 4 BEAVERTON 1 HEARST 1 NELSON 1 BEETON 1 HOLLAND CENTRE 1 NEW WESTMINSTER 2 BELLE RIVER 1 HORNBY 2 NORTH VANCOUVER 2 BELLEVILLE 5 HUNTSVILLE 2 PENTICTON 1 BLACKSTOCK 2 INGERSOLL 9 PORT ALBERNI 1 BLENHEIM 1 JORDAN STATION 2 PORT MOODY 1 BOLTON 6 KANATA 5 PRINCE GEORGE 3 BOWMANVILLE 14 KAPUSKASING 17 RICHMOND 9 BRACEBRIDGE 1 KEMPTVILLE 1 SAANICHTON 1 BRADFORD 5 KILLALOE 1 SUN PEAKS 1 BRAMPTON 55 KING CITY 1 SURREY 8 BRANTFORD 11 KINGSTON 10 TERRACE 1 BRESLAU 1 KINGSVILLE 5 VANCOUVER 33 BROCKVILLE 3 KITCHENER 31 VICTORIA 2 BROOKLIN 1 LAKEFIELD 1 WHISTLER 2 BURLINGTON 70 LANCASTER 1 BC Total 119 CALEDON 1 LEAMINGTON 5 MB BRANDON 1 CALEDON EAST 1 LINDSAY 1 ELIE 1 CAMBRIDGE 33 LONDON 58 MORDEN 1 CAYUGA 1 LONG SAULT 1 OAK RIVER 1 CHATHAM 4 LUCKNOW 1 PORTAGE LA PRAIRIE 1 CLINTON 1 LYNDEN 1 WINNIPEG 44 COBOURG 2 MAIDSTONE 4 MB Total 49 COCHRANE 1 MANOTICK 1 SK ANTLER 1 COLLINGWOOD 5 MARKHAM 62 CLIMAX 1 COMBER 1 MCGREGOR 1 EATONIA 1 CONCORD 7 MERRICKVILLE 1 FORT QU'APPELLE 1 CORNWALL 3 MIDLAND 1 GOODSOIL 1 CORUNNA 1 MILTON 16 LLOYDMINSTER 1 COTTAM 1 MISSISSAUGA 312 MOOSE JAW 1 COURTICE 7 MOUNT ALBERT 1 REGINA 11 DORCHESTER 2 NEPEAN 7 SASKATOON 6 DUNDAS 4 NEW DUNDEE 1 WEYBURN 1 EDEN 1 NEW HAMBURG 1 SK Total 49 ELLIOT LAKE 1 NEWMARKET 13
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NEWTONVILLE 1 TORONTO 382 MONTREAL 59 NIAGARA FALLS 21 TOTTENHAM 3 MONTREAL-EST 1 NIAGARA ON THE LAKE 5 TRENTON 1 MONTREAL-NORD 1 NORTH BAY 3 UXBRIDGE 3 MONT-ROYAL 2 NORTH YORK 1 VARS 1 MONT-TREMBLANT 1 OAKVILLE 58 VAUGHAN 47 NOTRE-DAME-DE-L'ILE-PERRO 1 ODESSA 1 VAUGHN 1 NOTRE-DAME-DES-PRAIRIES 1 OLDCASTLE 19 VINELAND 3 PIERREFONDS 1 OMEMEE 1 WALLACEBURG 8 POINTE-CLAIRE 4 ORANGEVILLE 7 WATERDOWN 2 PORTNEUF 2 ORILLIA 5 WATERFORD 1 QUEBEC 11 ORONO 1 WATERLOO 21 REPENTIGNY 2 OSHAWA 110 WELLAND 14 RIVIERE-DU-LOUP 1 OTTAWA 43 WELLANDPORT 1 SAINT-ARMAND 1 OWEN SOUND 5 WHITBY 60 SAINT-AUGUSTIN-DE-DESMAUR 1 PALMERSTON 1 WINDSOR 181 SAINT-DAMIEN-DE-BUCKLAND 1 PARIS 4 WINGHAM 1 SAINTE-ANNE-DE-BELLEVUE 2 PARRY SOUND 2 WOODBRIDGE 14 SAINTE-FOY 4 PENETANGUISHENE 1 WOODSTOCK 30 SAINTE-JULIE 1 PERTH 2 ON Total 2404 SAINTE-MADELEINE 1 PETERBOROUGH 14 PE CHARLOTTETOWN 2 SAINTE-MARIE 2 PETERSBURG 1 PE Total 2 SAINTE-THERESE 4 PETROLIA 2 PQ ANJOU 3 SAINT-EUSTACHE 3 PICKERING 29 BAIE-D'URFE 1 SAINT-GEORGES 1 PICTON 1 BEAUPORT 2 SAINT-HUBERT 4 PLATTSVILLE 1 BECANCOUR 1 SAINT-HYACINTHE 2 POINTE AUX ROCHES 1 BEDFORD 2 SAINT-JEAN-SUR-RICHELIEU 1 PORT COLBORNE 2 BELOEIL 1 SAINT-JEROME 6 PORT HOPE 4 BLAINVILLE 1 SAINT-LAMBERT 1 PORT PERRY 4 BOISBRIAND 7 SAINT-LAURENT 27 PORT ROBINSON 1 BONAVENTURE 1 SAINT-LEONARD 1 PUSLINCH 1 BON-CONSEIL 1 SAINT-PAMPHILE 1 RICHMOND 1 BOUCHERVILLE 5 SAINT-PAUL 1 RICHMOND HILL 23 BROMPTONVILLE 1 SAINT-REMI-DE-TINGWICK 1 RIDGETOWN 3 BROSSARD 3 SAINT-TITE 1 RODNEY 1 CAMPBELL'S BAY 1 SHERBROOKE 5 RUTHVEN 1 CANTON-DE-GRANBY 2 ST EUSTACHE MONTREAL 1 SARNIA 12 CAP-AUX-MEULES 2 STANSTEAD 1 SAULT STE MARIE 3 CHELSEA 1 TERREBONNE 1 SCARBOROUGH 2 CHICOUTIMI 2 THETFORD MINES 1 SCOTLAND 1 CONTRECOEUR 1 UPTON 1 SHELBURNE 1 COTE SAINT-LUC 1 VAL-BELAIR 1 SIMCOE 2 COTEAU-DU-LAC 1 VANIER 1 SMITHS FALLS 2 COURCELLES 1 VAUDREUIL-DORION 3 SMITHVILLE 1 COWANSVILLE 1 VERDUN 1 SOUTH WOODSLEE 1 DISRAELI 1 VILLE-DE-LAVAL 1 ST CATHARINES 93 DOLLARD-DES-ORMEAUX 2 WESTMOUNT 2 ST CLEMENTS 1 DORVAL 6 PQ Total 275 ST DAVIDS 1 DRUMMONDVILLE 2 YT WHITEHORSE 1 ST GEORGE BRANT 1 FLEURIMONT 1 YT Total 1 ST MARYS 4 GATINEAU 3 NB BALMORAL 1 ST THOMAS 10 HUDSON 1 BATHURST 1 STEVENSVILLE 1 JOLIETTE 1 CORNER BROOK 2 STITTSVILLE 2 JONQUICRE 1 DIEPPE 3 STONEY CREEK 21 LAC-ETCHEMIN 1 FREDERICTON 6 STOUFFVILLE 3 LACHENAIE 2 FRENCH VILLAGE-YORK 1 STRATFORD 10 LACHINE 11 LAKEVILLE-WESTMORLAND 1 STRATHROY 4 LAC-MEGANTIC 1 MIRAMICHI 1 SUDBURY 6 LASALLE 3 MONCTON 22 TAVISTOCK 2 LAVAL 13 RIVERVIEW 3 TECUMSEH 4 LEVIS 1 SAINT JOHN 2 THAMESVILLE 1 L'ILE-PERROT 2 SHEDIAC 1 THORNDALE 1 LONGUEUIL 3 ST. JOHN'S 5 THORNHILL 6 LOURDES-DE-JOLIETTE 1 STEPHENVILLE 1 THOROLD 3 MAGOG 1 TRACADIE-SHEILA 1 TILBURY 8 MASCOUCHE 1 TRAYTOWN 1 TILLSONBURG 6 MERCIER 1 NB Total 52 TIMMINS 4 MONT-JOLI 1 Grand Total 3088
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Ontario Automotive Supplier Network - 2007
COLLINS & AIKMAN PLASTICS INC. THOMSON FASTENERS INC. TECHFORM PRODUCTS LTD. TEXTRON CANADA LTD. RYDER TRUCK RENTAL CANADA VENTRA GROUP INC KERR INDUSTRIES LTD. COSMA INTERNATIONAL INC A G SIMPSON CO LTD. PPG CANADA INC. PPG CANADA INC. HALLA CLIMATE DELPHI CANADA GLOBAL FASTENERS CONTROAL CANADA ACIER NOVA LTEE WOODBRIDGE FOAM THYSSENKRUP BUDD CANADA INC. LEAR SEATING LTD. TENNECO CANADA INC JOHNSON CONTROLS LTD. LITENS AUTOMOTIVE LINEX MANUFACTURING INC VAN-ROB STAMPINGS INC. FLEX-N-GATE CANADA COMPANY TESMA INTERNATIONAL INC. LEAR CORP CANADA LTD. MAGNA INTERNATIONAL INC. WET AUTOMOTIVE SYSTEMS LTD. TITAN TOOL & DIE LTD. DECOMA INTERNATIONAL INC. LEAR CORP CANADA LTD. KAUTEX CORP. OFFSITE INDUSTRIES WINDSOR MACHINE & STAMPING LTD. ST.CATHARINES MACHINE PRODUCTS PAPP PLASTICS & DISTRIBUTING LTD. GDX AUTOMOTIVE RIVERVIEW STEEL CO LTD. COOPER STANDARD AUTOMOTIVE CANADA DOFASCO INC. PROGRESSIVE MOULDED PRODUCTS LTD. STELCO INC. LINAMAR CORP. SANDCO AUTOMOTIVE LTD COPPERWELD CANADA INC. TIERCON INDUSTRIES INC. ARVINMERITOR CANADA ALGOMA STEEL INC. NOMA COMPANY LONG MANUFACTURING LTD. STACKPOLE LTD. MERITOR SUSPENSION SYSTEMS CO INC. BRIDGESTONE/FIRESTONE VANNATTER GROUP INC. GOODYEAR CANADA INC. RIMA MANUFACTURING INTIER AUTOMOTIVE INC. December 2006 TDS AUTOMOTIVE CANADA INC. COURT VALVE CO INC. 3M CANADA CO. THERM-O-DISC LTD. ABC INTERIOR SYSTEMS INC. Quebec Automotive Supplier Network – 2007 Réseau des fournisseurs québécois de l’industrie automobile - 2007
LORBEC SOREL FORGE ALCAN ELASTO PROXY FONDERIES POITRAS RESSORTS LIBERTÉ REHAU INC. AM T DIECASTING ECI COM POSITES IPL INC M AXTECH M ETA-FOR INC DAYCO VELTRI M ETAL NORSK HYDRO ARROWHEAD INDUSTRIES WATERVILLE TG ACIER NOVA ISE STAM PING PROFOM INC SOLECTRON ALSTOM CANADA CAM OPLAST JYCO INGERSOLL-RAND GDX KANCORP THONA OERLIKON CONTRAVES DANA G-SPEK OPAL RT TECHNOLOGIES GROUPE LAVERGNE RECYCLAGE STYROCHEM CANADA TORRINGTON DATRAN
SPECTRA PREM IUM INDUSTRIES M ETCOR COLLINS &AIKM AN AM TREX M ARK IV INTAKE SYSTEM S PLOM BCO BRIDGESTONE FIRESTONE M ICRO MOULES DOM FER RAUFOSS DBM REFLEX M ICHELIN AM ERIQUE TRIM AG EDC RONSCO M ONTUPET GOODYEAR EASTERN DIE CASTING CANADIAN OVERHEAD HANDLING BASELL CANADA ISAAC INSTRUM ENTS Updated January 8th, 2007 Mise à jour le 8 janvier, 2007 Submitted: February 20, 2009 GMCL Restructuring Plan Page 51 of 52
APPENDIX H
GMCL Canadian Engineering Centre (“CEC”):
Since 2001, GMCL has operated the Canadian Engineering Centre (CEC) in Canada and represents Canada‟s only significant, dedicated automotive engineering centre. The CEC has engineered vehicles such as the Chevrolet Equinox and Pontiac Torrent for the global marketplace. GMCL is also the Canadian leader in collaborative university-based research supported by the National Science and Engineering Research Council of Canada (“NSERC”) Program. Not only performing more of this collaborative research than any other Canadian auto company but more than any other company in Canada.
GM‟s global engineering organization also selected the Canadian Engineering Centre to create 90 Chevrolet Equinox hydrogen fuel cell compact SUV vehicles. These vehicles constitute the world‟s largest demonstration fleet of hydrogen fuel cell vehicles that is known as “Project Driveway”. These hydrogen fuel cell powered vehicles have no smog forming emissions and only emit clean water vapour.
Recognizing that a climate of innovation is essential to the long-term success of any automotive company, through the Beacon Project, GMCL has developed a forward looking Canadian “Automotive Innovation Network”. The Automotive Innovation Network is designed to strengthen Canadian-based advanced technology engineering, enhance automotive supplier engineering and expand relationships with Canadian universities. The network would link key Canadian suppliers with some of Canada‟s best academic minds for automotive research as well as enhanced government labs. The Automotive Innovation Network thereby allows the Canadian industry to more effectively compete in the hyper-competitive global automotive market.
In 2007, the CEC began to transform from primarily a vehicle engineering organization into a centre that focused its activities on advanced technology innovation and applied R&D activities. Advanced “Green” automotive technology development was targeted for the CEC as this is a critical corporate priority. The development and commercialization of these advanced “Green” technologies are essential in order to meet changing consumer preferences as well as meeting the new stringent fuel economy regulations being finalized. Transitioning the GMCL Canadian Engineering Centre towards higher value-added innovation activities will continue into 2009.
Concerns about global climate change and worries about energy supply, cost and security are driving this unparalleled level of transportation innovation. The CEC is projected to conduct $40 million in advanced environmental technology innovation, over the next five years, with numerous projects in vehicle electrification (such as advanced battery related technologies and mechatronics technology) as well as in fuel efficiency related technologies (such as hybrid vehicle systems and light weight materials). The work would be conducted in Canada with the involvement of selected Canadian automotive suppliers and universities, providing them with a unique opportunity to Submitted: February 20, 2009 GMCL Restructuring Plan Page 52 of 52
quickly develop a new range of market-relevant environmental automotive technologies, skills, capabilities and capacity.
Addressing Key Auto Industry Challenges
GM today faces significant transformational challenges across its North American business. Canadian competitive strengths, such as a low Canadian dollar, the public health care system, competitive labour costs and reliable transportation and energy infrastructure, no longer provide the competitive advantages that once helped to attract strategic automotive investment to Canada. As a result, GMCL is being forced to change and adapt very quickly.
While these challenges have become daunting, there are significant Canadian benefits in maintaining the GMCL engineering advantage. However, the engineering activity in Canada is threatened if support programs comparable to the US Department of Energy, Energy Independence and Security Act (Section 136) are not available in Canada. Without comparable Canadian supports, “Green” automotive advanced technology work and “Green” vehicle manufacturing planned by GM in this country is threatened.