By on June 3, 2008

610x.jpgAs you can imagine, GM's decision to close their Oshawa truck assembly plant in Ontario, Canada doesn't set well with the Canadian Auto Workers (CAW). "It's nothing short of betrayal," CAW Oshawa branch president Chris Buckley told Reuters. "General Motors is going to produce our truck in Mexico and the United States. That's absolutely disgusting." If he's looking for the real betrayal, he should think back to the contract negotiations in May, when CAW president Buzz Hargrove took a hard line stance against contract concessions, making Canada the most expensive place in North America to assemble cars. Or recall Buzz' statement that "It's my last set of negotiations and my legacy is not going to be that the sons and daughters of current workers that were hired over 20 years ago are going to come in at the same rate in 2008 as their parents did in '86 or '87." It now looks like Buzz' legacy will be unemployed sons and daughters of current workers thanks to his inflexibility driving production out of Canada and back to the lower-paid hands of the UAW and Mexican auto workers. Just sayin'.

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31 Comments on “CAW Betrayed by GM, but Who’s Really to Blame?...”


  • avatar
    Skooter

    Way to go Buzz. You showed em’. You priced your plant right out of the picture.

  • avatar
    Brendon from Canada

    Listening to the radio this morning it also sounds like the government of Ontario is also going to be looking for some money from GM. The contention stated was that the subsidies given to GM was in exchange for jobs; GM’s current stance is that they money will be returned to the province – but isn’t owed until the end of contract term – which is 2013…

  • avatar
    Lichtronamo

    With Mexico already being a low cost manufacturing area and the deal GM got from the UAW, the CAW had no foundation upon which to stake their demands. This move should hardly come as a surprise except for the fact that GM actually did it. Like Ford sending the Fiesta to Mexico, the CAW and UAW need to wake up to a big ol’ cup of reality and realize that these companies are going down fast and drastic measures are required. Granted RW probably should have waited on taking that salary/bonus package because its disgusting to take the money and then can 10,000 people.

  • avatar
    Raskolnikov

    “Nothing short of betrayal…”

    Right. It’s actually called strategic production planning.
    I’m not sure giving any of the remaining slice of pie to the UAW is a great move, though. After the recent sympathy strikes, I would be looking to send more production south of the border.

    Also, Lichtronamo, while I believe execs should get paid well, tough times require them to sacrifice as well. No salary til North America is profitable would be great PR for the Wagonater.

  • avatar
    crc

    Lichtronamo “Granted RW probably should have waited on taking that salary/bonus package because its disgusting to take the money and then can 10,000 people.”

    He actually deserves more of a salary/bonus package because he saved all of that money by moving production.

  • avatar

    Here’s a stunning fact that Buzz might fail to realize: Bolting panels onto frames and sweeping factory floors just isn’t worth $25/hour+ anymore. People can still live a pretty comfortable life without having enough extra dough to buy a boat and a big huge house and a new car every 2 years. Anything you are fully qualified to do at the age of 16 isn’t worth big bucks, especially if there are literally about 3 billion other people on earth qualified to do the same job you do. It sucks, sure, but this is a new economy. Hargrove blew it, hard, especially with the weak US dollar he knew he couldn’t hold production in Canada. What a dope.

  • avatar
    nocaster

    Perhaps Buzz should have studied Global Labor Arbitrage before taking such a hard line.

  • avatar
    gamper

    I am not totally up to speed on GM’s future product plans, but they seem to be changing daily. Is a new product for Oshawa out of the question??

  • avatar
    psarhjinian

    “I am not totally up to speed on GM’s future product plans, but they seem to be changing daily. Is a new product for Oshawa out of the question??”

    Oshawa is getting the Camaro. When that plays itself out (and GM’s constant overexposure has pretty much guaranteed that) it will be down the Allure/Lacrosse and Impala (the Grand Prix dies and G8 is being shipped from overseas), which actually sell pretty well. My worry is, though, that with the Malibu as good a car as it is, that the Impala might not be long for this world. That leaves the Buick, and Buick is solidly in GM’s “Damaged Brands” portfolio.

    And yes, Hargrove blew it. He could have negotiated for production guarantees, or pushed for retooling of Oshawa for something with more mass-market appeal. Instead, he made the same mistakes Wagoner et do:
    * Live in a vacuum, ignoring the markets and competition
    * Live in the past, thinking that 1962 rules still apply
    * Be blinded by bling, thinking that flashy, expensive products that GM toadies and press lackeys fawn over will pay the bills.

    I remember Hargrove’s championing of Oshawa’s winning the Camaro and I couldn’t help but wonder: how is a low-volume, fickle-market sports car going to provide long-term jobs? But hey, look, the Camaro is shiny!

  • avatar
    menno

    Handwriting. Wall. Nose. Face. “DUH” Saw this one coming months ago. Kind of like looking down a train tunnel with a light on the other side, listening to a train horn and realizing it’s night time – that ain’t no sunshine on the other side of the tunnel. Time to get off the tracks… Sorry, Mikey, but your union leaders are knuckle dragging, sub-moronic, first-class (?!) imbeciles and blind as well.

  • avatar
    MikeInCanada

    Anyone care to guess the probability of the Ontario government getting their $250 million bribe back from GM?

    All it takes is for GM to tell the government that unless they want to loose the rest of GM’s manufacturing in Ontario they’d just better forget about it.

    And you know what, they will.

    This is what happens when governments pick and chose favorites. Free markets gets the last laugh once again.

  • avatar
    mel23

    Look ahead a few years. Why should we expect any manufacturer to build stuff in other than the lowest cost country? The only way we can compete with Mexico is for our currency/wages to be lower than theirs, offsetting for transportation costs of course. Toyota and Honda have already started reducing the wages they pay in response to the lowered UAW wages, so it’s a race to the bottom that was a certainty from day one of the globalization frenzy. Sure CAW/UAW givebacks can delay the inevitable for a period, but just that. People aren’t going to buy gas-hog trucks and SUVs at any price with energy costs at present levels and likely to go higher.

    Of course it isn’t just manufacturing; legal, medical, financial, insurance and just about anything that doesn’t involve a physical interface with a customer is a candidate for off shoring.

  • avatar
    John B

    Betrayed by GM? Hardly. I heard the interview this morning with Chris Buckley on CBC radio where Buckley refused to even discuss or talk about the closing with Denis Desrosiers who was also on the line. This article presently on Autoblog:

    “In response to plummeting sales of large trucks, GM will close down four more North American Assembly plants by 2010. The plants in Janesville, Wisconsin, Oshawa Ontario, Moraine, Ohio, and Toluca, Mexico are already running reduced production schedules and will cease operations entirely as products are discontinued or shifted to other plants.”
    http://www.autoblog.com/2008/06/03/breaking-gm-to-close-4-truck-plants-may-sell-or-close-hummer/

  • avatar
    Robert Schwartz

    “That leaves the two Buicks, and Buick is solidly in GM’s “Damaged Brands” portfolio.”

    Buick announces new motto: “Waiting for the last customer to die.”

  • avatar
    kps

    According to a report I heard this morning, auto sector employment in Ontario is — despite the ‘big’ 2.7182818 and their self-serving company and union bosses — increasing.

  • avatar
    MikeInCanada

    Re: mel23 –

    The only way we can compete with Mexico/China, anyone for that matter is on the basis of ‘efficiency’. There many examples of high wage jobs existing within successful, and healthy companies.

    Just imagine if Honda Canada and GM Oshawa were to make an identical product – who do you think would be the more efficient producer?

    That’s the issue at hand.

  • avatar
    gsp

    Ontario will go after GM for the money. Our governing party is already making a public issue about it, so they have to now.

    Funny though that the highest ranking plant in North America for quality (per JD Power) GM (of all people) is shutting down.

  • avatar
    Busbodger

    gsp: Funny though that the highest ranking plant in North America for quality (per JD Power) GM (of all people) is shutting down

    That’s probably initial quality – right? As a consumer careful with his money I’m much more concerned with how good the car/truck is at 150K miles or more. JD Powers’ survey holds little value to me.

    That’s also going to affect what its worth when I replace it someday.

    What’s still moving and looking good at the 10 year mark?

  • avatar
    Luther

    “Our” Truck?

    I think Buzz is a bit confused about that whole property rights non-sense…

    Idiot Marxist.

  • avatar
    daro31

    Buzz Hargrove whining about being betrayed by General Motors reminds me of people who are surprised when they are attacked by their pet tigers. No matter how much control the lion tamer thinks he has, he is still always dealing with something with traits which are characteristic of the species. Every time a man is attacked by his pet, we blame the man for being so foolish as to think that he can overcome the nature of the beast. The car companies are no different; they are controlled by their need for food (money) and preservation instincts, (responsibility to shareholders). Buzz Hargrove should have been around these auto guys long enough to know that there is no room for trust or feelings, it is a business. If Buzz has a contract, then exercise his rights in the courtroom or the streets if he is feeling particularity assertive, but please don’t whine.

  • avatar
    NickR

    hmmmm

    union plants = closing
    non-union plants = expanding

    Buzz is a relic of a bygone era, I cringe when I think there are people who believed his rhetoric and thought he was going to be their saviour.

    BTW, if GM goes bankrupt they can get out of paying the government back, can’t they? I thought so.

    Anyways Mikey, wherever you are, I hope you made it through unscathed.

  • avatar
    Gardiner Westbound

    Hargrove’s Old Tyme Unionism is as passé as penny loafers. The Detroit-3 maintained Canadian car plants because the dollar traded at a substantial discount to the U.S. greenback and socialized medicine generated billions in benefit savings. Tolerating a buffoon every few years to keep the gravy train rolling was a profitable inconvenience. Buzz deluded himself his superb tactical skills made it all possible. In reality Lady Luck smiled on him, big-time.

    Expensive foreign military adventures and malfunctioning political, economic and regulatory systems devalued the U.S. dollar. A generation of buyers abandoned the domestic auto manufacturers. The Canadian petrodollar irrevocably changed domestic manufacturing economics and a strong federal government is unimpressed with Hargrovian hysteria and extortion, though the provincial government continues to make sappy investments in dying companies.

    My guess is Buzz will retire, leaving the CAW’s inevitable decimation to a hapless successor, and jump into the political trough. Years of doing himself good with other people’s money make him a natural!

  • avatar
    psarhjinian

    “That’s probably initial quality – right? As a consumer careful with his money I’m much more concerned with how good the car/truck is at 150K miles or more. JD Powers’ survey holds little value to me.”

    Well, there’s two points here:
    * Initial quality is _the_ metric of a plant. If a product fails quickly, it’s probably the result of assembly or parts-production issues. If it fails years down the road, it’s design or parts-sourcing.
    * Oshawa really is very good. The classic example is the Grand Prix, which improved to match the Impala and Regal/Century/Lacrosse when it moved to Oshawa. The W-Bodies have won long-term awards and, aside from the plastic intake manifold issue (a design issue) they’re quite solid. They’re not great cars, mind you but they’re reliable.

  • avatar
    rocket88

    I think we need to recognize anohter thing. The particular product made in the Oshawa truck plant isnt selling and isnt likely too. Thus it has to shut based on pure economics. The fuel economy regs and the market forces doomed it, as they may the brampton plant too – im not sure weve seen the last of this in Canada.
    To completely retool that plant (obviously to small cars) takes alot of money, as well as having the product ready to retool it with . Nothing in the CAW portfolio makes that investment worthwhile- if indeed you have the money to do anything at all. For example would anybody today borrow money, to locate anything in a CAW plant? not likely. And for GM every dime is borrowed .

  • avatar
    Rix

    I wonder how much Buzz Hargrove took home in pay last year? It would be interesting to know.

  • avatar
    wmba

    “@Rix :

    I wonder how much Buzz Hargrove took home in pay last year? It would be interesting to know.”

    A few years ago, maybe 3, Buzz was being interviewed here, and after the usual mandatory obfuscations admitted to about $120K. He was defending the average $90K that CAW workers were making then with overtime.

  • avatar

    What a lot of writers on here dont get is that GM Canada concluded and signed a Collective aggreement with the CAW! Collective agreements are a scared trust in both Labour and Business, so even two weeks ago GM Canada must have known and yes I agree with the CAW, GM Canada bargained and signed a agreement in bad faith period.
    But what happens next should be interesting for all.

  • avatar
    MikeInCanada

    Re: George Labrador

    I agree, not just from an ethical perspective, but a bottom line business case view as well – You have to negotiate in good faith if you ever want to effectively manage and work with the majority of the workforce.

    Unfortunately, both sides take that perspective with a grain of salt. Yes, GM more then likely knew that there would be structural changes forthcoming and they should have ‘mentioned’ it. On the side, in the US, after signing a master-national contract the UAW has (is) proceeding with local strike actions; all in an attempt to obtain benefits that were not agreded upon earlier.

    Bottom line: Both sides are responsible for the predicament that they find themselves in today.

  • avatar

    Well the CAW can take GM Canada to Court,but as this company has still not settled the Gasket problems with the defective V6 Engines here in Canada, which they have settled in the USA, I dont hold much hope of anyone getting money out of a Stone cold Company that has no regard to Collective agreements or anything else for that matter.
    Lets face it GM Canada today, Ford and the other Company operating here could be next, these are foreign Companies with no regard for laws here in this Country of Canada, they will do what they want period!

  • avatar
    Dimwit

    Why is this a surprise to anyone? GM is hemorraging sales like crazy. Forget moving manu to Mexico, try building *anything* if this keeps up!

    They just don’t have a product mix for survival right now. Anybody that’s making a truck, SUV or large car in N/A and has had no announcement for product revamp better start job hunting.

  • avatar
    bdjlo

    This is nothing yet. Wait till cars start coming from China or India.

    It was about time this was going to happen
    These jobs that get paid $80000 – $90000/year are no different than what people out there work for $19000 – $25000/year. (or $2000 – $2500 in other countries)
    They always want more money in the contracts
    Well, You can want, but you are out of luck.

    These workers deserve to be out of work and go back to work for 9 bucks an hour.

    Moral: Don’t be greedy.


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