UPDATE 1-Canada braces for more GM cutbacks

(Adds details, comments by GM Canada spokesman, Oshawa mayor)

By John McCrank

TORONTO, Nov 21 (Reuters) - General Motors of Canada (GM.N) said on Friday it will shut its Oshawa, Ontario, truck plant on May 14, rather than July 1 as previously announced, because market conditions in the United States have worsened.

"When you look at the uncertainty in the U.S. market and the huge volatility there ... based on where demand is now, it looks like it's just strong enough to run through until May," said Stew Low, a spokesman for GM Canada.

About 2,600 workers will lose their jobs when the plant, which makes the Chevrolet Silverado and the GMC Sierra, shuts its doors.

The Canadian Auto Workers union said GM also plans to cut a second week of production at the car plant in its Oshawa complex in January

"Our car assembly plant was scheduled to be on layoff the first week of January, but they notified us today that they're going to take a second week out of January as well, as the market continues to soften," said Chris Buckley, President of CAW Local 222 in Oshawa.

The company said just two weeks ago it would temporarily lay off 500 people from the car plant at the beginning of 2009, until the market improves.

About 5,000 people work in the plant building the Chevrolet Impala.

GM's Canadian facilities ship about 95 percent of what they build to the United States, where vehicle sales have collapsed in the economic and financial downturn.

Oshawa's mayor, John Gray, on a sidelines of a mayor's meeting in Toronto, said all levels of government must to do whatever it takes to save the struggling industry.

"It's imperative that everybody comes to the table on this," he said, pointing to the tax losses that Oshawa alone would suffer if GM were to fold.

"GM pays about C$20 million ($15.6 million) in property taxes ... how do you make up that difference? You have to have massive tax shifts and the lion's share of that burden would be borne by the residential sector."

Parent General Motors Corp reported a $4.2 billion operating loss for the third quarter. It also said on Friday it plans temporary shutdowns at several U.S. plants over the next two months.

Detroit's Big Three automakers -- GM, Ford Motor Co (F.N), and Chrysler [CBS.UL] -- are seeking $25 billion in immediate funding from the U.S. government to stay afloat.

The Canadian Automobile Dealers Association told a news conference on Friday that their 3,500 dealers employ 140,000 people and they would bear the brunt of the economic impact if the big manufacturers could not obtain bridge financing.

The association also said that while consumers in Canada -- in contrast with the United States -- continue to get adequate automobile financing, the dealers themselves are finding it tough to get financing for their operations. ($1=$1.28 Canadian) (Additional reporting by Randall Palmer; editing by Rob Wilson)