Federal Government Announces GM Deal for Ontario

The Canadian federal government said it had struck a deal with General Motors of Canada Ltd. that commits the automaker to invest $290 million at several of its Ontario operations.

The announcement is the second of its kind and may help shore up support for Canada’s minority Conservative government in Southern Ontario, where the auto manufacturing sector has been bleeding jobs, on the eve of an election call. An election has been called for October 14, 2008.

Under the agreement, GM will put about $245 million into its St. Catharines plant to make fuel-efficient 6-speed front-wheel drive transmissions, which would support more than 300 jobs, Industry Canada said in a release.

In Oshawa, where GM recently announced it was shuttering its truck plant, eliminating 2,600 jobs, Canada’s largest auto maker has agreed to build a mid-sized hybrid vehicle at its car plant.

GM will also commit $40 million for environmental research at its Canadian engineering center, also in Oshawa.

The government announced it would invest up to $80 million in Ford Canada facilities in Windsor, Ontario.