GM says its move to phase out some internal combustion auto assembly plants in North America — including Oshawa — will free up as much as $8 billion to help fund its global shift to electric and autonomous vehicles.

On Monday the company announced that vehicle plants in Oshawa and four U.S. centres will be “unallocated” production in 2019, a move that puts more than 2,500 unionized workers in Oshawa on a path to retirement or layoff.

GM said in a statement that resources allocated to electric and autonomous vehicle programs will double in the next two years as it prioritizes future vehicle investments in next-generation battery-electric offerings.

“That could have enormous potential benefits for Canada,” said David Paterson, corporate and environmental affairs vice-president with GM Canada, noting that the company hired several hundred software engineers over the past year at its Canadian Technical Centre in Markham where it’s developing self-driving technologies.

Paterson said it’s too early to tell if the Oshawa plant will be completely mothballed when its current allocation of models runs out next year, or if it could be retooled to produce electric and autonomous models.

“That remains to be determined,” he said. “It doesn’t mean we won’t continue to look for opportunities, we will, but there are no assurances of that at all.”

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He noted that General Motors is building production versions of its self-driving Cruise AV at facilities near Detroit, which could become something of a template for future plants.

Auto sector analysts say that while automakers such as Mercedes, Audi and BMW are introducing electric models, the earliest offerings are still built on existing chassis originally designed for cars powered by internal combustion engines and using traditional assembly line procedures and a typical complement of workers.

However, a report from management consulting firm McKinsey & Co. says the established automakers who have announced launches of more than 100 new electric vehicles by 2024 stand to reduce costs through increasing design efficiency, and lower manufacturing and labour costs associated with electric vehicle production compared with internal combustion assembly.

For the Oshawa plant, the writing has been on the wall for some time, according to data provided by DesRosiers Automotive Consultants Inc.

Production at the facility has been declining from its peak in 2003. Total Canadian production across all automakers during roughly the same period has dropped from about 3 million annual units to more than 2 million, said Dennis DesRosiers, president of the Richmond Hill-based research and consulting firm.

“I am not saying that Canada will become Australia and eventually lose all its vehicle assembly operations, but there is more to come. I just don’t know which plants and when they will disappear.”

GM in 2016 said it would invest up to $400 million to upgrade assembly systems at the Oshawa plant, but Paterson said the assembly operation produces passenger sedans and older model trucks that have lost favour with consumers who prefer the latest light trucks, SUVs and crossovers.

Detroit-based General Motors Company has seen its North American market share drop to the low teens from mid-40 per cent a few decades ago.

DesRosiers said companies are being forced to find the cash to respond to radical change in the auto industry in the form of electrification, autonomous vehicles, ride-sharing and subscription services.

In January, GM committed to rolling out fully driverless cars in a shortened time frame as it attempts to outmanoeuvre rivals as well as current electric vehicle market leader Tesla.

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Along with the established automakers, numerous electric car brands have been introduced by smaller companies to serve a hybrid and electric vehicle market that accounted for just 0.8 per cent of new vehicle registrations through August, according to data from IHS Markit.

That’s tiny, but substantially more than the 0.5 per cent at the same time in 2017. Automakers in the U.S. sold just over 155,000 fully electric vehicles through October, about 1 per cent of total sales, says Edmunds.com, while Navigant Research predicts huge global growth in the next seven years, from just over 1 million sales this year to 6.5 million by 2025.

With a file from Bloomberg

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