The former president of the Canadian Auto Workers Union is unimpressed by a new deal struck by the federal government with General Motors of Canada Limited that will see the company invest $290 million in the struggling Ontario auto industry.

Buzz Hargrove said the timing of the deal's announcement, which came just days before Sunday's election call, is "designed simply to buy votes of our members."

"I think they will reject this type of politics," Hargrove said Sunday during an interview on CTV Newsnet.

The new deal is seen as a win-win situation for both the Conservatives and GM. Two days before the Harper government called a federal election, they offered hope to an ailing manufacturing sector but made it clear there would be no public money invested.

GM meanwhile will get a break on paying penalties to the federal and Ontario governments for failing to meet agreed-upon job-creation targets.

In a letter to GM president Arturo S. Elias, Industry Minister Jim Prentice outlined the three initiatives the money would be put toward:

  • a new manufacturing system in St. Catharines that would produce fuel-efficient transmissions;
  • the production of a new mid-size hybrid vehicle in Oshawa;
  • and the creation of research and development projects on environmentally friendly technologies, again in Oshawa.

Prentice said the new investment means the federal government won't invoke the clause of the 2005 Beacon Agreement that would demand early repayment of hundreds of millions of dollars in federal and provincial subsidies for failing to meet promised employment targets.

The federal government was prepared to request early repayment of these subsidies after GM's recent announcement that it would close its Oshawa truck facility on July 1, 2009.

The closing of the facility, which will eliminate about 2,600 jobs, means the company will not meet employment targets at the Oshawa plant that had been set out in the agreement.

Prentice conceded in his letter that the North American auto industry has been hard-hit by ever-rising gas prices, a sluggish U.S. economy and growing consumer interest in hybrid cars and other environmentally friendly initiatives.

About 80,000 manufacturing jobs have been lost in Canada in the past year.

The new agreement would see $245 million go toward upgrading the St. Catharines Glendale Powertrain Facility to produce the fuel-efficient six-speed transmissions.

Production on the line would begin in April 2011 and would "support more than 300 jobs," according to Prentice's letter.

At the Oshawa Car Plant, the new hybrid would be added to the already planned production of a new mid-size car. The manufacture of that car will begin in October 2010, and the hybrid would hit the production line the following spring.

And $40 million over a maximum of five years will go toward developing new environmentally friendly technologies at GM's Canadian engineering facility in Oshawa.

The new agreement followed an announcement by Stephen Harper last week that promised up to $80 million in funding for a Ford Motor Company assembly plant and research centre in Windsor, Ont.

Hargrove said the terms of the new agreement, as well as last week's funding boost, are not nearly enough to help the struggling auto industry.

Hargrove said CAW members will engage in strategic voting in the upcoming election, meaning they will vote for candidates who have a good chance of defeating Tory candidates.

"Our people are angry, they're mad and they can't all go out, as Mr. Harper says, to Fort McMurray and work in the oilsands," Hargrove said. "They want jobs, they want support, they want a government that cares about what happens in their daily lives and the lives of their communities."