Cosma to build frame assemblies for GM in recession-battered St. Thomas, Ont.

AURORA, Ont. - Magna International Inc. (TSX:MG.A) had some welcome news for recession-battered St. Thomas, Ont., on Monday, announcing that it has been chosen to supply frame assemblies for General Motors' next generation of full-size pickups and SUVs.

Magna declined to disclose the value of the contract, but spokeswoman Tracy Fuerst said the company does not plan any new hiring.

"Right now the facility has approximately 900 team members. This new frame business replaces the current program so the same number of employees working on the current program will be required to work on this new program," Fuerst said in an email to The Canadian Press.

Cosma International, an operating unit of Magna, said it will build the frame assemblies at its plants in St. Thomas and Saltillo, Mexico.

"Receiving this third-generation frame business from GM is a real testament to our ability to deliver on key areas, including cost and quality," said Cosma president Horst Prelog. "GM is a long-term valued customer of ours and we look forward to continuing our partnership with them."

The news provides a boost to the manufacturing-based community near London, which has been hit particularly hard by the downturn in the auto industry. Ford plans to close its 1,400-employee St. Thomas assembly plant in 2011, and Daimler AG closed its Sterling truck plant earlier this year, eliminating more than 700 jobs from the region. The Sterling plant employed more than 2,000 people at its peak.

The auto production industry, centred in southern Ontario, has undergone years of cuts due to falling auto sales that were exacerbated by the recession. In the last two years, GM, Chrysler and Ford have cuts tens of thousands of jobs and closed assembly plants across North America to cope with a slump in business and loss of market share to Toyota, Honda and other overseas rivals.

In Canada, GM has already closed down its pickup truck plant in Oshawa and will shutter a transmission plant in Windsor early next year, and all of the so-called Detroit Three automakers have reduced their workforces and streamlined operations.

Cosma manufactures a comprehensive range of metal body systems, components, assemblies and modules including complete vehicle frames, chassis systems and complete body assemblies for the automotive and other industries. It has 37 manufacturing facilities and 12 product development and engineering centres worldwide.

Aurora-based Magna, a leading global auto-parts manufacturer, boasts 72,000 employees in 242 manufacturing operations and 85 product development and engineering centres in 25 countries. Magna shares were up 99 cents at $53.92 Monday on the Toronto Stock Exchange.