General Motors will be without an engine block supplier for some of its Chinese operations. Mexico-based Nemak announced it will close a Canada-based factory that currently builds engine blocks for Cadillac vehicles made in China.
Reuters first reported on the news Tuesday with additional reporting from CBC Windsor. The plant, based in Windsor, Ontario, employs 270 workers. Nemak said the plant’s closure comes after the loss of a Chinese client. It’s actually unclear if GM China was the Chinese client; the information available is unclear. The reports said 90 percent of the engine blocks produced in the facility were shipped to China for Cadillac production at the automaker’s joint-venture Shanghai-based assembly plant.
The CBC report claimed GM China reduced its needs for engine blocks from the facility, but again, it’s unclear if GM is the unnamed Chinese client.
Without the unnamed Chinese client, the plant would have run at 10 percent of its total capacity in 2020. Thus, Nemak decided the factory will close sometime in the middle of next year.
The Chinese automaker is in the midst of a slump, which has numerous automakers scurrying to find ways to protect healthy profit margins. China is the world’s largest market for new automobiles. The country’s record-smashing sales figures have also helped companies shoulder the weight of investments in future technologies such as self-driving technology and electrification. The latter is becoming a strict requirement in many global markets, including China itself, as regions crackdown on tailpipe emissions.