General Motors under pressure to move production on Canadian military contracts to Canada

Ottawa is putting some pressure on General Motors to move Canadian Armed Forces contracts to Canada to help preserve jobs in the midst of a trade war with the administration of U.S. President Donald Trump.

General Motors showcased a Light Utility Vehicle (LUV) for the Canadian military based on the Oshawa-made Chevrolet Silverado in 2023, a key plank in the launch of GM Defence Canada to support efforts to upgrade the logistical abilities of the Canadian Armed Forces.

GM Defense Canada was awarded a $35.8 million contract by Ottawa for 90 light tactical vehicles that year, with an option to procure up to an additional 18 LTVs. The vehicles can be serviced and maintained through GM Canada’s network of 448 dealers and GM’s global supply chain but are built in a plant in North Carolina.

Industry Minister Melanie Joly told reporters Thursday that she believes that investing in defence is one way to support an auto industry currently under threat from Trump-imposed tariffs.

“This is an opportunity we haven’t seen since the Second World War to build in Canada and help support sectors affected by the tariffs,” she said at a Toronto press conference following a tour of the Oshawa Assembly plant

“We know that Canada will be investing more than ever in defence. These investments must enable jobs in Canada,” Joly said. “I’m convinced that we have fantastic Canadian workers who are willing to put ‘elbows up’ and we want to make sure they can build for our men and women serving in Canada and abroad.”

Joly met with GM executives and unionized workers during her Oshawa visit and said Defence Minister David McGuinty is talking to General Motors management about the “biggest re-investment” and to get the company to “spend even more” on jobs in Canada.

A drive to bolster Canada’s military will form part of Ottawa’s response to Trump’s trade war on the Canadian auto industry and the manufacturers – like GM – will be needed to achieve that objective.

“It will drive jobs in Canada and encourage Canadian innovation,” declared a spokesperson in Joly’s office.

GM Defense International was established in 2022 and added GM Defense Canada to the portfolio the next year, a move that will strengthen the company’s ability to “develop solutions in Canada,” such as the Light Utility Vehicle and Light Forces Enhancement programs, explained GM Defense Canada President Steve duMont.

duMont said the establishment of the Canadian division was a “natural next step” in expanding GM’s global presence in the field. “We have a seamless partnership with GM Canada that will enable us to deliver highly customized solutions to meet the unique requirements of Canadian defense and government customers. We understand that the Canadian military procurement process requires significant investments in the country, and we’re confident GM’s current and future investments will help us meet our obligations in support of our Canadian customers.”

GM Defense participated at the Canadian Association of the Defence and Security Industries exhibit in Ottawa in 2022 where it showcased commercial-based solutions to the Canadian Armed Forces. GM Defense demonstrated its Light Utility Vehicle prototype based on the Silverado and two variants of the proven and already fielded Infantry Squad Vehicle, based on the Chevrolet Colorado ZR2.