TORONTO (AP) -- The possibility of General Motors acquiring Chrysler raises the specter of "further significant downsizing" in Canada, says Canadian Auto Workers president Ken Lewenza.
A deal for General Motors Corp. to buy Chrysler LLC from New York private equity firm Cerberus Capital Management LP could come soon as both automakers struggle to deal with falling sales.
Lewenza said some Canadian plants -- including Chrysler's minivan plant in Windsor, Ontario -- would likely survive a merger because they manufacture products that are made nowhere else in North America.
Others -- such as Chrysler's Brampton, Ontario car assembly plant -- probably wouldn't be as lucky because it produces cars comparable to those now in GM's lineup, Lewenza said in an interview.
The Brampton plant produces large sedans including the Chrysler 300 and the Dodge Charger. It employs about 3,000 people after 1,100 workers were laid off in a massive downsizing announced last year.
The two companies' products overlap significantly in some areas -- including sport utility vehicles, pickup trucks and crossover vehicles -- and this will likely lead to substantial consolidation should there be a deal, said TD Bank economist Derek Burleton.
"Given the current challenges and the pressures on the companies, there certainly would be a real thrust to secure cost savings, so that will obviously be a risk to further significant downsizing and to the Ontario economy," Burleton said.
CAW economist Jim Stanford said both the Brampton plant and a similar GM car assembly plant in Oshawa, Ontario, have brand new equipment that could protect them from closure. "They would be absolutely insane to close either one of those plants, but that doesn't mean they won't do it," he said.
A combined GM and Chrysler would control about 36 percent of the North American auto market. In Canada, the two companies employ about 30,000 people -- 20,000 at GM and 10,000 at Chrysler -- and have assembly and parts plants across southern Ontario.