By on June 22, 2012

As part of their bailout package, General Motors agreed that at least 16 percent of its North American production would take place in Canada. The closing of the Oshawa consolidated line may cause GM to be in violation of those terms.

A report in the Globe and Mail states that unless GM can find more capacity, whether at the Oshawa flex line or elsewhere, GM will only be building 13 percent of its North American-produced vehicles in Canada once production of the Impala and Equinox moves to factories in the United States. Currently, the two Oshawa lines and the CAMI plant in Ingersoll, Ontario account for a 21 percent share.

GM says it intends to honor its commitments, but no government officials would divulge the penalties or mechanisms in place to ensure that GM complies. Negotiations with the CAW are scheduled to begin this summer, and the union is hoping to save the roughly 2,000 jobs at stake by reversing GM’s decision on the consolidated line and convincing them to add a third shift to the Oshawa flex line, something that GM says is not in the cards.

 

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45 Comments on “Closing Oshawa Could Violate GM’s Bailout Conditions...”


  • avatar
    Philosophil

    It will be interesting to see what happens with this. I guess we’ll soon find out whether those government conditions have any real bite, or are merely all gums.

  • avatar
    segfault

    If they’re violating the terms of the bailout, “undo” the bailout and force them back into bankruptcy. If you think about it, it’s only speeding up the inevitable.

    • 0 avatar
      gslippy

      I was thinking they could just pay back the billions still owed, and then they can do whatever they want.

    • 0 avatar
      mikey

      @GM Canada has never gone bankrupt. The American owned parent company did.

      In 2009, the provincial, and federal governments, and the CAW,were all told.

      “Kick in some cash,or we close the doors and go home”

      The salary, and hourly pension plans were hugely underfunded. Over the years the governments had let GM of the hook for thier pension contributions. After all GM was “too big to fail”

      This is Canada, home of the “social safety net” .Depending on ones position on the political spectrum,it could also be callled a huge “Ponzi” scheme…We all know what happens,when the bottom falls out of a Ponzi,..right? A GM/Chrysler shut would have put hundreds of thousands on welfare.

      The federal Conservitive government,and the provincial Liberals,had no choice.

      • 0 avatar
        84Cressida

        Semantics. GM went bankrupt, therefore GM Canada, a subsidiary of GM, went bankrupt.

      • 0 avatar
        highdesertcat

        Hey, here’s an idea! Why can’t we give whatever GM assets are in Canada, to Canada, rename it GMOC, Holden II, Opel II or Vauxhall II and be done with them. They can do WTF they want with it, even keep Oshawa open if they want to, just like Fiat can do WTF they like with their Chrysler subdivision.

  • avatar
    morbo

    I recently got a week in Oshawa’s finest via Enterprise (and the anomyous coward that hit my 6 month old 300C in the 90% empty Princeton NJ Hyatt parking lot). The shiny red 2012 Impala had 8,000 mile on, actually newer then 300C that was undergoing surgery at the body shop.

    I know rental cars get beaten up, but can someone explain why

    1. On a hot day a 2×1 inch strip of paint popped off the fender flare. Not scraped, not washed off, literally popped off due to heat.

    2. Why does a 2012 impala not have a gear idicator on the shifter? Literally, would the extra $2 for a sticker indicating the gear on shifter assembly really have made that much a dent in GM’s profit.

    3. Why does a 2012 car not have side airbags. I get that they’re not adding them to the pillars this late in the vehivle cycle, but if Ford and Chrylser can add airbagged seats for side impact for their big cars (300/Charger and Town Car/CVPI), why couldn’t GM?

    4. Why does the Impala rental have a dome light less birght then my cell phones home screen?

    This and many other mysteries, including who buys these without massive discounts? Maybe ImpalaMan can weigh in. Maybe this is just epic decontetnting from the 99 Lumina (which I remember driving and not being so horrified by).Maybe its my natural antiGM bias. But something is sick in Oshawa if this is your flagship sedan.

    As much as I miss my Ranger, maybe Ford was right in killing dated product (Ranger, CVPI) to protect the brand

    • 0 avatar
      86er

      Re: #3, I recall TTAC covering this issue. Here are some links:

      http://www.thetruthaboutcars.com/2009/09/positive-post-of-the-day-gm-moves-to-sort-out-side-airbag-issue/

      http://www.thetruthaboutcars.com/2009/08/enterprise-deletes-impala-standard-sidebags/

      • 0 avatar
        Educator(of teachers)Dan

        Yes GM is willing to delete side airbags for fleet customers like Enterprise, although I’d love to know how much cheaper that makes the car for Enterprise.

        the shift indicator thing has been that way since 2005 or so, no reason to change it now with a redesign on the horizion. The real question Morbo is; “What did you think of the engine transmission combo?”

      • 0 avatar
        28-cars-later

        Maybe its just me but I feel a little safer knowing a car which was designed for impact standards prior to the introduction of these side/door airbags still does not “need them” per see. What I’m a bit fearful of are the newer style cars which can’t take the side impact as well and need these additional airbags to improve survival rates, I mean why else would they be available if not as a crutch to today’s smaller, lighter, flimsier designs?

    • 0 avatar
      CJinSD

      I’d like to think the paint popping off was a matter of a botched body shop repair, but maybe I’m being unfair to body shops. GM obviously does not sweat the details.

      • 0 avatar
        mikey

        @CJinSD….Or a guy rented it and done quick fix before he turned it in.

        FYI The paint shop is only five years old,and uses the same systems and standards that BMW and Honda use.

      • 0 avatar
        CJinSD

        If the car was white, the repair could even have been done by Enterprise’s ‘detailing’ shop. Charge the customer for a repair, pull the dent out with a crow bar and hit it with spray paint.

    • 0 avatar
      mikey

      @morbo…..Great questions. You answered all in one sentence. “natural antiGM bias” You got a bottom of the line decontented rental. What do you expect from such a vehicle? Your a Ford guy? Me too. I own a 2008 Mustang “Deluxe Premium” convertible. No auto headlights. No “Blue Tooth” ABS brakes? notta. A truck release in the car? No again. An outside temp indicater? My cheap little Cobalt has one,not my Mustang.

      Don’t get me wrong. I love my Mustang, my Cobalt, and my Impala LTZ. I have no illusions, they are, what they are. Cheap/less expensive, to buy, own and operate cars.

      End of story.

      The paint peeling? My guess, its been hit, and sombody has doctored it.

      Something sick Oshawa? I don’t think so,thousands of satified Impala owners speaks volumes.

    • 0 avatar
      carbiz

      Or you could just be too darned picky… I, too, rented an Impala, the day after New Year’s last year when a Cadillac back onto the hood of our car while the spouse was driving (no wonder he only drives once a year!) The weather was crap. It was snowy. I didn’t want to give the Impala back. It was quiet, smooth, very confident in the snow. In the dark of January it had more lights than I needed. The shifter is on digital readout on the column – always has been. Do you really look at the shifter when you’re driving?
      Clearly, you shouldn’t buy an Impala. Fine. Not your cup of tea. Got it. But for the buck, the fuel mileage and size, it’s a good car. Or perhaps you love giving money to PetroCanada?

      • 0 avatar
        CJinSD

        “Or you could just be too darned picky…” Huh? He bought a Chrysler 300C, not a Toyota Avalon. It isn’t like he is accustomed to detail and assembly perfection. When the big three are finally gone; blaming the customers for wanting better cars may rank high in the countless list of reasons.

      • 0 avatar
        golden2husky

        ……….not a Toyota Avalon. It isn’t like he is accustomed to detail and assembly perfection…….

        My father owns an Avalon. A nice, softie; the last year with the old man bench seat. But “assembly perfection”…no way.. I really wish posting photos was possible on TTAC (the tech here needs some updating) so I could show you the warped plastic on the center dash radio stack. Or a video of the funny moan that comes out of what I assume to be the clockspring when you spin the wheel in a parking lot. Big deals? No, but when one speaks with an air of snobbery about perfection, it would be nice if it were true.

      • 0 avatar
        CJinSD

        g2h, did you read Morbo’s response a bit further down the page? He more or less conceded that he chose his Chrysler for reasons other than accuracy. We’re talking about cars that are a few months old, not bench seat, decade old cars that are still serving faithfully.

      • 0 avatar
        golden2husky

        Comon, CJ. One, the Avalon is a mid 2000′s model, not decades old. Two, Toyotas were well built, even “decades” ago. Three, where am I saying anything about the Chrysler? Your have to admit that you are anything but open minded when it comes to this issue. US cars mean bad (mostly), Japanese mean great (mostly). Post after post, you say the same thing. Your tone makes it abundantly clear. And, yes, dad’s Avalon is serving him well…

      • 0 avatar
        28-cars-later

        I have a shifter label on my GP but then again it was never available in column shift. If I’m backing out its the first click after park, I don’t have to look, other than reverse its a few click to drive and those are the only gears I use. I suppose if you’re trying to manually shift the automatic from 1,2, to D for whatever reason it would be nice to have a sticker, but as you pointed out its on the dash.

      • 0 avatar
        CJinSD

        2004 was the last year for the bench seat Avalon. I said decade, not decades, call it rounding error. Nonetheless, most car interiors are in their best shape the year of their assembly rather than 8 years later. Warping plastic isn’t a good thing, but I assume that it wasn’t in evidence in 2004. As for the noise on dialing in full steering lock on an 8 year old car, it says something about how well his Avalon has held up that such a thing sticks out on a car that age. You’re reaching and it is amusing.

    • 0 avatar
      dtremit

      The gear indicator is at least in part because the Impala is still available with a split bench seat (!) and column shift. The dash indicator works with both.

    • 0 avatar
      84Cressida

      Doesn’t federal law require that cars 2008 and newer have side airbags? Even Ford had to begrugingly put side airbags in the Crown Vic and Ranger, and I know GM and Enterprise got into hot water a few years ago about deleteing safety features. I can’t believe they’re still doing it, and I work at Enterprise. Sorry you got stuck with an Impala, I’ve driven far more than I would’ve liked and they truly suck.

      • 0 avatar
        ranwhenparked

        No, side airbags are still not mandatory, per se. The NHTSA does set standards for minimum head and torso protection standards in side impacts, and most manufacturers have found that installing side airbags is the easiest way to meet them. However, some cars are still able to score well enough in side impact testing to get by without.

  • avatar
    DC Bruce

    Looks like GM is going to play a game of chicken with the Canadian government. They will argue that any meaningful sanctions — fines, early paybacks — will simply hurt the company further, jeopardizing the CAW’s ownership interest in the company.

    Sort of like “You may have a gun pointed at my head, but I have a bigger gun pointed at yours; and if I pull the trigger, not only will you be dead, but your best friend standing behind you as well. Now, let’s put these guns down and talk some sense.”

    Just to be clear, even though I’m an American, I think it sucks if GM is welshing on the deal with Canada or engaging in these kinds of tactics. Of course, the workers and the taxpayers are the ones caught in the cross-fire in this situation.

  • avatar
    carbiz

    Looks like nobody wants to build here anymore in the land of Swedish taxes with a dollar on par with the U.S.
    I suspect GM could pay back the loan guarantees it got 4 years ago and tell Ottawa to take a hike.
    Other than its 140 year history (McLaughlin Motors) in Canada, why would this be any different than what Mazda, Nissan, Kia, Hyundai and many others are doing? Taking advantage of NAFTA? It used to be Mexico they escaped to.

    Time to bring back the Auto Pact……….

    • 0 avatar
      mikey

      @carbiz…..Your one of my few allies here. Though I have to correct you. Ontario, and Canada, ended up as sharehoders, the same as the US treasury.

      The reality is.with the US owning 33% and the UAW VEBA owning a big chunk, our 10 percent doesn’t count for much.

    • 0 avatar
      gslippy

      If the UAW/CAW wanted to save the jobs, it could self-extinguish the union and let the company operate like the transplants.

  • avatar
    D in the D

    I’m pretty sure the Globe & Mail allowed the CAW to their math on this one. The numbers don’t add up. At GM’s current rate of sales, they would need to build less than 400K units this year to violate this condition. Those 2 plants will build over 500K, just about like now. The Equinox and Impala are not leaving, only the overflow is going to US facilities. Seriously. Fact check at all?

  • avatar
    Conslaw

    The Impala is old, but it does have a 300 horsepower V6. It might be the best HP/Dollar (US or loonie) out there. Edmunds TMV says you can walk in off the street and by a midrange LT model for $23,773. If you are a GM Employee or otherwise have access to the GM discount, you can get a $29,000 list Impala for under $21,000. If you go light on the options you can walk away under $18,000.

    • 0 avatar
      84Cressida

      It may have 300 HP, but it’s still slow and lethargic. An Avalon will easily outgun it all day long.

      • 0 avatar
        NormSV650

        Try sub-6 second 0-60 times for the 2012 Impala when Avalon is still in the 6′s. Hardly out gunned.

      • 0 avatar
        28-cars-later

        Avalons… Toyota Avalons… the Camry IIs… do 0-60mph around six seconds? Did I wake up somewhere other than Earth this morning, when did this happen?

      • 0 avatar
        84Cressida

        Car and Driver got the Avalon to 0-60 in 6.0 seconds flat back in 2006. And I’ve driven both the Avalon and the 2012 Impala, the Impala is a dog compared to the Avalon, especially off the line.

      • 0 avatar
        28-cars-later

        Wow, I’ve been out of the Toyota game for awhile. Most of their products I encounter on a regular basis are older than 2005, and are usually 4-cyl. The last V6 Toyota engine I personally drove was a 2002 Lex ES300 and it was a dog in terms of acceleration and power.

      • 0 avatar
        raph

        Drag racing avalons and impalas – that made me smirk in a walter smitty kinda way. Still its awesom this conversation is going on given that 300 hp in a performance car was a big deal just over a decade ago.

  • avatar
    morbo

    @ CJinSD, ““Or you could just be too darned picky…” Huh? He bought a Chrysler 300C, not a Toyota Avalon. It isn’t like he is accustomed to detail and assembly perfection.”

    I would argue, but admittedly the MKTaurus (or whatever Lincoln calls their Taurus-should-be-named-Contintental) and Genesis I cross shopped did have better fit and finish then my 300C. Granted all three are light years ahead of the Enterprise Impala. I espeically liked that I can feel the road while driving. Mainly from the steering column being a bit loose.

    @Mikey “You got a bottom of the line decontented rental. What do you expect from such a vehicle”

    Truth be told, between work and hotwire I rent something like 25 times a year. The bottom feeder Altima’s, Sonata’s, and Fusions I get are significantly better then the bottom feeder Impala (and Galants/200′s). They too lack all the features, but they each have something: Fusions have auto-lights, Altima’s keyless ignition, Sonata’s….well look cool anyway.

    @ carbiz, “Or perhaps you love giving money to PetroCanada?”
    I for one am doing my part to prevent global cooling, thank you very much. Also doing my part to support theocratic islamofascist middle eastern states, via Sunoco and Exxon.

    As for paint peeling, hadn’t though of a schiatty paint job, makes sense. Forgot about the airbag thing. Good ol’ Enterprise saving me money by culling safety features.

    As for the enginer/transmission, and it pains me to say this with my anti-GM bias, it is a strong point for this car. A bit noisy, but I think trhat’s the goofy resonator they put on the engine to make it sound fast. I was getting about 28mpg fully loaded on the highway with it with reasonable acceleration. Brakes need an upgrade though.

    • 0 avatar
      28-cars-later

      “As for the enginer/transmission, and it pains me to say this with my anti-GM bias, it is a strong point for this car.”

      Coming from you Morbo, this is quite a compliment for the General, they finally got one thing right for you.

  • avatar
    George B

    I see a fleet-only Impala Classic in our future. Police departments and rental car companies would appreciate a big sedan for a low price and producing some old Impalas would delay paying penalties to Canada until the economy starts to grow again.

  • avatar
    el scotto

    It should get interesting when GM and the Canadian Government start arguing over the numbers. GM is kinda like Las Vegas; mike one huge bet or lose money all night?

  • avatar
    dusterdude

    I basically agree the Canadian /Ontario government were under serious pressure to kick in the billions for the bailout — but am I to presume that there weren’t serious guarantees with the billions of $’s ?? How is it that GM could talk about closing a plant 3 mere years after this bailout commitment ? I didn’t hear that the Mexican government kicked in any money — they aren’t closing any plants in Mexico …hmm ??

    • 0 avatar
      28-cars-later

      Its all about the currency wars… Fed is purposely inflating our currency to weaken the dollar vs other currencies in order to make US exports more attractive, among other things (such as exporting their inflation to the Chinese who peg the yuan to the dollar). The peso is still weaker than the dollar… 1 US dollar = 13.8330 Mexican pesos according to the googles, while 1 US dollar = 1.0249 Canadian dollars at the same time. You’ve heard “its the economy, stupid” in this case “its the currency, stupid”.

      Also Impala’s don’t exactly fly off the shelves at attractive prices to justify the increased production costs due to the Dollar to CDN rates…

  • avatar
    oboylepr

    Oshawa’s manufacturing loses to date:

    GM North plant: 2 stamping plants, Injection moulding, RIM,
    paint shop, brake parts, window regulators and more.
    Rad/trilink
    Truck plant: The best one they had.
    Battery plant: Supplied many OEM’s besides GM
    One of the two car plants.

    What’s left will go the way of the above, no doubt about it.


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