The New GM Restructuring Plans By Pat Munro At Isnare.com Ezine Articles

While General Motors Corporation in the U.S. will complete its restructuring plan through the court system, GM Canada won’t because of government intervention and investments. GM Canada is now an entity on its own, and will not be affected by the U.S. filing. GM Canada was bailed out by the taxpayers of Canada and Ontario, late last month. Consistent with the principal of proportional support for proportional production, the governments of Canada and Ontario have invested $10.6 billion in General Motors. This investment ensures certain benefits for Canadians and Canadian auto workers. These benefits being:

- Five new vehicles including hybrids from the Oshawa and Ingersol production plants.

- Ongoing production of V6 and V8 engines to be maintained at the St. Catherines powertrain.

- The introduction of flexible transmissions, for example - fuel efficient 6 speed front wheel drive engines.

- The GMCL making substantial investments in Canadian facilities over the next 7 years. - There will be no further plant closures, only restructuring.

- GMC’s labor costs to be competitive with Toyota Canada.

- Over the next seven years, GMC plans to invest in ‘green’ research for their development and innovation departments.

- GM Canada intends to better serve the customer’s needs through a consolidation dealer network with the widest coverage across Canada of any automaker.

- Most importantly to past auto workers, GMC will have secured employee pensions for retirees. Including improving funding levels and establishing a Health Care Trust for hourly retiree health care benefits.

This new Health Care Trust is to help preserve and manage retiree health benefits not covered by the country's public health-care system.

For GM Canada, the primary advantage of setting up an independent Health Care Trust is to eliminate liability estimated to be in the billions of dollars linked to retiree health benefits. GM Canada union members will receive at least some portion of benefits from HCT even if the company goes into bankruptcy. Keep in mind that there are questions of whether funds in the HCT will be sufficient to pay the full level of benefits to retirees. This will depend on several factors, including investment returns, life expectancy and healthcare inflation.

Also, GMC’s restructuring plan was unveiled last month. This plan has been developed in order to ensure the General Motors Corporation is economically sound and the government’s investments are secured.

Canadians can expect from their tax dollars:

- The company’s warranties and other service commitments, as well as financing options will remain in full.
- Employees will continue to receive wages and benefits without interruption.
- GM manufacturing will continue producing as previously announced.
- Suppliers will continue to be paid for products and services.
- Dealers are to remain the strongest and broadest network across Canada. Dealers will continue to service GM’s customers and have access to financing plans, parts and warranties.

According to the President of GM Canada, Arturo Elias, customers can confidently continue to purchase new vehicles and receive top notch service. Customers can also take full advantage of GMC’s leading warranty coverage through this restructuring process. Apparently, the new GM Canada will be even more focused on customer satisfaction.
I would hope so.

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