GM invests $245M in Ont. plant

General Motors is investing $245 million in its St. Catharines, Ont., powertrain plant in a move that the automaker says will secure 400 jobs at the factory.

GM Canada president Kevin Williams made the announcement Tuesday morning at an event with Industry Minister Tony Clement and Canadian Auto Workers president Ken Lewenza.

"We are moving forward to grow our business right here in St. Catharines," said Williams.

A 74,300-square-metre expansion will house a transmission production line to produce GM's new, fuel-efficient, six-speed transmissions.

Production is expected to begin in early 2012.

"You are playing a major part in the overall success," Williams told plant workers on hand for the announcement.

"Thank you for being here and for doing what you do!"

The investment comes in addition to GM's April investment of $235 million for engine production at the plant, also securing up to 400 jobs.

GM returns to profitability

The Detroit automaker earned $865 million US in its latest quarter, its first profitable quarter in nearly three years. The $1.66-per-share profit was far better than a loss of $6 billion, or $9.78-per-share, for the same period last year.

The $31.5 billion in revenue for the first three months of 2010 was up 40 per cent compared with the first quarter of 2009, when GM initiated temporary plant shutdowns in Canada and the United States.

GM Canada shed about 2,600 jobs with the closure of a truck plant in Oshawa, Ont., last year.

It also announced plans to shut down a transmission plant in Windsor, Ont., by the end of July, affecting more than 1,000 workers.

However, the company has announced the recall of hundreds of workers to its Canadian plants to meet strong demand for some of its products.

73% of GM is government-owned

The U.S. government still owns 61 per cent of GM, as a result of Washington's $45.3-billion US investment.

The Canadian federal and Ontario governments own about 12 per cent of GM, after they invested a total of $8.1 billion — two-thirds from Ottawa and one-third from the province.

The automaker received $52 billion from the U.S. government and $9.5 billion from the Canadian and Ontario governments, starting in 2008.

At first, the entire amount of U.S. aid was considered a loan as the government tried to keep GM from going under and further pulling down the fragile economy.

During bankruptcy proceedings, however, the U.S. government reduced the loan portion to $6.7 billion and converted the rest to company stock.

Canadian governments also converted part of their debt to shares, reducing its loan balance to $1.4 billion.

The final instalments on those loans were repaid in April, comfortably beating a 2015 deadline.