March 14, 2005

GM Canada's $2.5B Beacon Project will include support for green technologies

A $2.5-billion reinvestment in General Motors' Canadian operations represents the largest and most comprehensive automotive investment in Canadian history. Building on agreements with the Ontario and federal governments, General Motors of Canada's Beacon Project involves three of GM Canada's manufacturing facilities as well as its Canadian Engineering Centre. The project will support the development and integration of environmental technologies as it strengthens the company's automotive engineering, manufacturing and research and development capabilities in Canada.

For example, the company plans to proceed with significant investments in industry-leading environmental technologies as part of a new paint shop which will support GM Canada's Oshawa Autoplex-the largest auto assembly complex in the western hemisphere. The new paint shop investments will increase the total production capacity of GM's Oshawa car plants while also setting a new environmental benchmark among Canadian auto plants.

Another part of the project is a $23-million investment in a new 5.3-litre V8 "Displacement on Demand" (DoD) engine to be manufactured at its Powertrain operation in St Catharines, Ontario. This will add another engine manufacturing program at the St Catharines plant and is linked to new vehicle programs at GM's auto assembly plant in Oshawa.

The new St Catharines DoD engine will save fuel by using only half of the engine's cylinders during most normal driving conditions. When loads are light, the control system automatically closes both intake and exhaust valves for half of the cylinders, cutting off their air and fuel supply. The fuel supply resumes and valves are reopened to provide all-cylinder operation when the driver needs it for brisk acceleration or for hauling heavy loads. This benefits both customers and the environment with significant improvement in fuel economy and a resulting lowering of greenhouse gas emissions and fuel costs.

The Beacon Project will also establish a university-based Automotive Innovation Network, designed to work with a number of university partners on automotive research and development, and to help address the "commercialization gap" in Canada. GM is currently the only automaker designing and engineering vehicles which are manufactured in Canada, and this project will serve to enhance its current leadership position in this area.

The federal government is contributing $200 million toward the Beacon Project. The conditionally repayable contribution will support areas of the project related to innovative process technologies, environmental research and advanced engineering.

Canada's contribution to GM is part of a larger commitment to the entire automotive industry. The government is continuing to work on the development of an automotive strategic framework which will present a vision of Canada's automotive sector through the year 2020. It will examine the key competitive issues affecting the sector's long-term growth, including sustainable development, research and development, infrastructure, regulatory harmonization, skills development, trade and investment. The government will also work with GM on its Canadian supplier development initiatives.

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