GM to build Buick Regal in Ontario, add 600 jobs

TORONTO (Reuters) - General Motors Co said on Wednesday it will build the 2011 Buick Regal in Oshawa, Ontario, as part of a commitment to Canada to keep production there in exchange for billions in government aid.

The Canadian Auto Workers union said the new vehicle, to be built alongside the hot-selling Camaro starting in the first quarter of 2011, will require a new production shift at the plant and an increase of about 600 jobs.

"Definitely, when the Buick Regal is introduced, there will be a need to put an additional shift on, which will help recall additional members from layoff," said Chris Buckley, president of CAW Local 222.

GM has about 1,200 workers on layoff in Oshawa as a result of the brutal downturn in the auto sector that forced both GM and Chrysler to restructure under bankruptcy protection.

Buckley said GM would launch yet another vehicle in Oshawa in the fourth quarter of 2011.

"It's going to be a rear-wheel-drive vehicle," he said. "All indications are that it is going to be the next generation of Cadillac."

The new vehicles are part of a production commitment to the CAW and to the governments of Canada and the province of Ontario to launch five new vehicles, including hybrids, from plants in Ontario.

GM was given $9.5 billion in Canadian loans earlier this year to help it avoid liquidation. The CAW also agreed to steep concessions to help the company survive.

On top of the product commitments, Canada and Ontario took 11.7 percent of the shares in the newly restructured GM in exchange for the loans.

The company also said it would maintain just under 20 percent of its U.S.-Canada production in Canada, and spend C$2.2 billion ($2.1 billion) on capital projects in the country through 2016, as well as C$1 billion on research and development.

The Regal is the third vehicle in the production commitment, following the Chevrolet Equinox and the GMC Terrain, two popular crossover utility vehicles built at GM's CAMI joint-venture plant with Suzuki Motor Corp in Ingersoll, Ontario.

North American production of the Regal, a midsized sedan based on the Opel Insignia, which was named the 2009 European car of the year, will begin early in 2011, GM said.

"The new Regal gives Buick a modern performance sedan and its production here in Oshawa is terrific news for our employees, the CAW (Canadian Auto Workers union), dealers and suppliers," Arturo Elias, president of General Motors of Canada, said in a statement.

Separately, GM plans to begin production of the Camaro convertible in Oshawa beginning in the first quarter of 2011.

GM also makes the Impala in a second plant in Oshawa.

The company has Canadian manufacturing plants in Oshawa and St. Catharines, a parts distribution plant in Woodstock, a transmission plant in Windsor, and the joint-venture plant with Suzuki in Ingersoll, all in Ontario. It employs about 9,000 people in Canada.

($1=$1.05 Canadian)

(Reporting by John McCrank; Editing by Frank McGurty)