GM to Invest in Ontario in Bid to Keep Up With Silicon Valley
June 10 2016 - 11:00AM
Dow Jones News
General Motors Co. will expand its engineering and software
development staff in Ontario, the latest investment in Detroit's
spending spree aimed at keeping up with Silicon Valley.
The move is another vote of confidence in Ontario's
tech-industry credentials, which have been significantly bolstered
by the University of Waterloo's efforts to become a magnet for tech
recruiters. GM has long operated in Ontario, building cars and
employing roughly 9,000 people at or in cities near its Oshawa
headquarters for manufacturing and other business activities.
GM said Friday it is adding 700 jobs to its Canadian engineering
center to increase Oshawa's role in the auto maker's race to
develop autonomous and alternative-fuel vehicles capable of chasing
Tesla Motors Inc. or Google Inc. GM has spent more than $1 billion
this year investing in ride-sharing firm Lyft Inc. and buying
autonomous-vehicle developer Cruise Automation Inc.
The No.1 U.S. auto maker estimates it will hire 27,000 salaried
workers in the next five years to expand and replace retiring
employees, 45% of which will be tech jobs. GM is spending $1
billion to make over its technical hub in Warren, Mich.
GM's rivals in the auto industry and a crop of tech
companies—ranging from Apple Inc. to a spate of new startups—are
also conducting an automotive hiring spree. Ford Motor Co. recently
invested more than $100 million to in a software company to acquire
needed skills, a move that mirrors recent acquisitions by Toyota
Motor Co.
At the same time, GM is also investing billions of dollars to
advance luxury vehicles and create more sophisticated entry-level
products for emerging markets. Bolstered by strong profits in North
America amid record sales and solid demand for light trucks, the
company has announced substantial investments for Chinese
operations, Cadillac and electrification since Chief Executive Mary
Barra took the helm in 2014.
In a recent interview, Ms. Barra cited the nearby University of
Waterloo as a source of top math and science graduates who would
otherwise head to Silicon Valley. The school's graduates are the
second-most-frequently hired in Silicon Valley behind students from
University of California, Berkeley, according to a 2015 report by
Startup Compass Inc., which tracks small and midsize
businesses.
"GM's decision to develop next-generation vehicle technologies
in Ontario is a vote of confidence in our province's highly skilled
workers and strength as an innovation hub," Kathleen Wynne, premier
of Ontario, said in a statement. In an interview, Unifor President
Jerry Dias said GM's move sends a positive signal ahead of labor
talks slated for later this year.
Unifor represents Canadian auto workers. Ontario is home to
several assembly plants, including Toyota and Ford factories, but
some of those operations are under pressure amid rising labor
costs.
GM's Oshawa plant in particular has faced uncertainty since the
company announced last year that it would move its Camaro sports
car production to Lansing. The other products made there are either
set to move or be phased out in the coming years.
Mr. Dias said GM's Friday hiring announcement "is a step in the
right direction…not a sign of a company looking to exit the
country. So I'm feeling positive of what that means for contract
negotiations."
Mr. Dias said he is confident the two sides can reach an
agreement, though he said it would be difficult. The priority for
Unifor is landing a new product at the Oshawa assembly plant to
replace the Camaro and its 100,000 units of annual production, he
said.
Christina Rogers contributed to this article
Write to Gautham Nagesh at gautham.nagesh@wsj.com
(END) Dow Jones Newswires
June 10, 2016 10:45 ET (14:45 GMT)
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