General Motors of Canada Ltd. seeks job reductions and other contract changes from members of the Canadian Auto Workers union at its Oshawa, Ont., Canada plants where the auto maker wants to convert its two car-assembly plants into a single flexible plant.

GM reportedly would invest C$800 million ($701 million) for the capability to produce different vehicles. The expectation is the lineup would include a new Chevrolet Camaro from GM’s new Zeta rear-wheel-drive architecture.

CAW Local 222 workers began voting Thursday on changes to the 3-year labor agreement reached last fall. Essentially, hourly employees are being asked to give up jobs and some paid break time in return for the promise of future product and retention of jobs past 2009.

Chevy Camaro concept

The 11,000 workers have been told a no vote will result in closure of the two car plants when the current products reach the end of their lifecycle, a move that would eliminate more than 5,000 assembly jobs.

Oshawa No.2 is to be shuttered in 2008 when GM stops making the Pontiac Grand Prix and Buick LaCrosse and Allure.

Oshawa No.1 loses its third shift later this year, but the investment would ensure replacements for the Chevy Impala and Monte Carlo in 2009, presumably from the Zeta platform.

A third truck facility is not on the bubble, but will be idled for five weeks later this year to retool for the next-generation fullsize pickups. (See related story: GM Slates Oshawa Downtime, Reveals Suburban Prices )

GM is to make a decision on the Oshawa investment later this year.

Meanwhile, investor Marty Whitman, founder of Third Avenue Funds, reportedly has acquired $2 million of debt in GM and also is calling for the auto maker to consider reorganization to address its legacy costs

GM earlier this week said it would cut its year-end 2006 pension liability by about $1.6 billion this year and save $420 million on a pretax basis next year by freezing the accrued pension benefits for about 42,000 U.S. salaried employees starting Jan. 1.

Salaried employees hired after Jan. 1, 2001 will shift to a defined-contribution plan and more senior employees would remain on the old plan, but see some benefit reductions.

The move does not affect hourly workers or retirees.

GM’s pension liability was $10.92 billion in 2005.

Last month, GM said it would cap retiree health-care benefits for U.S. salaried retirees, cut compensation for top executives and board members and halve the quarterly dividend. (See related story: GM Cuts Top Exec Pay, Dividend, Salaried Benefits )

Last fall GM and the United Auto Workers reached an agreement to cut hourly retiree health care costs. Hourly workers approved the deal that awaits court approval, but retirees have launched a legal challenge.

A ruling on the agreement is expected later this month.