By on August 29, 2014

1024px-2011_Chevrolet_Equinox_LTZ_--_03-09-2011

News that GM will be sending some production of the Chevrolet Equinox to their Ramos Arizpe, Mexico plant passed without much fanfare – GM’s PR machine was much more interested in touting the move of the Cadillac SRX to Spring Hill, Tennessee. While the Equinox’s move to Mexico will backfill capacity at that plant, it spells another blow for the future of GM’s Oshawa, Ontario plant.

The Equinox (and its GMC Terrain twin) is primarily built at GM’s CAMI plant in Ingersoll, Ontario. Currently overflow production is handled by Oshawa and Spring Hill. For the next generation, Ingersoll and Ramos Arizpe were in direct competition for the new crossovers, with Ingersoll eventually winning out.

The Theta crossovers (as the Equinox and Terrain are known internally) have been a big success for GM, necessitating the overflow production at two sites. But with the move to Mexico, it’s merely another bad sign for Oshawa, which has had a succession of product moving away from the plant, and absolutely nothing in the way of investment announcements or product commitments.

At this rate, Oshawa’s closing in 2016 (when GM’s bailout-related obligations to the Canadian government expire) is almost a certainty.

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61 Comments on “Another Bad Sign For Oshawa As GM Moves Chevrolet Equinox To Mexico...”


  • avatar
    Arthur Dailey

    So much for commitments to quality, re-assurances to the government or getting co-operation from the union.

    The Oshawa plant for over a decade has been a top scoring plant, worldwide for quality.

    The union has made many concessions to ‘protect’ jobs.

    The government has helped bail out and fund the company in return for promises of future jobs and commitment.

    Guess that these don’t add up to a hill of beans when compared with cheap labour.

    • 0 avatar
      28-Cars-Later

      Yup.

    • 0 avatar
      calgarytek

      I sympathize with the workers, but not on the premise of quality. A polished turd is still a turd.

      If it was quality indeed, well, you wouldn’t have GM’s bankruptcy, recall, general reputation.

      Many of those people should have seen where the wind is blowing and packed up and gone to Cambridge or Alliston. If you work with the product that close, you see it’s flaws, well…

      Cheaper cost of living too!

      • 0 avatar
        psarhjinian

        “If it was quality indeed, well, you wouldn’t have GM’s bankruptcy, recall, general reputation.”

        The products were well-assembled. They may not have been particularly well-engineered or even that good, but the plant itself has been the best in North America, and one of the best in the world, several times.

        A turd some of the products might be, but they were well-formed.

        “Many of those people should have seen where the wind is blowing and packed up and gone to Cambridge or Alliston. If you work with the product that close, you see it’s flaws, well…”

        It’s not that easy to get a job at Cambridge, Woodstock (both Toyota) or Alliston (Honda). The other issue is the downstream suppliers that surround the plant: this takes out them as well, which in turn ripples through the surrounding area. It’s unfortunate in the extreme, doubly so when you consider the quality of the product.

        • 0 avatar
          28-Cars-Later

          Excellent post.

        • 0 avatar
          Joebaldheadedgranny

          Great post psarhjinian, yet one of the realities of globalization is that now even high-end vehicles will likely be assembled in places like Mexico. As much as I hate to admit it, a well-engineered vehicle will sell in any first-world market if it is made in a low-cost nation.

          The average vehicle cost $32579 in July, with an average loan period of 66 months and an average hold period of 11.5 years. People seem willing to pay the money for all the features and they don’t seem as interested anymore where the OEM is based or where their vehicles are assembled.

        • 0 avatar
          bd2

          @psarhjinian

          Exactly.

          While every automaker has its hiccups in assembly, most of the recalls (in particular, the massive recalls) have to do with engineering/faulty parts issues (such as the Toyota recalls from a few years ago).

          Canada is having the same issue as Australia.

          A strong currency due to export of natural resources has made local auto manufacturing a losing proposition.

      • 0 avatar
        Arthur Dailey

        Calgarytek:
        1) Cost of living in Cambridge area (particularly housing) is higher than Oshawa/Clarington area.
        2) Many non-union companies have an internal policy of not hiring workers from union shops. Although this is illegal under the Ontario Labour Relations Act, it is almost impossible to prove.
        3) The workers only produce the cars as they are designed. The quality of their assembly work is quite separate from the quality of the engineering, components and design.
        4) Therefore if GM’s bankruptcy was due to inferior products blame the highly overpaid and overpopulated management and executives not the assemblers. The exec’s all got their bonuses and golden parachutes rather than being fired for cause, as many deserved. And GM’s organizational structure is bloated with way too many management levels and types. Meanwhile they cut assembly jobs and cheap out on components. A text book example of bad management, trying to shift the blame elsewhere.

    • 0 avatar
      RobertRyan

      Looks like GM is going for the bottom line , not quality

      • 0 avatar
        rpol35

        Nothing new there, that’s how they ended in bankruptcy, a performance that they will likely repeat if they don’t reform their ways.

        • 0 avatar
          highdesertcat

          And the US taxpayers will stand ready once again with bailouts, handouts and nationalization….

          • 0 avatar
            psarhjinian

            I don’t think you know what “Nationalization” is. The US doesn’t nationalize, just like the US doesn’t do single-payer healthcare.

            The US half-asses it and goes for crony capitalism instead because, well, Socialism!!!11

            Those of us on the left side of the aisle would have preferred outright nationalization of GM. It would have seen a little more deadwood cleared. During Whitacre’s reign I thought this was going to happen, but the government lost it’s nerve.

          • 0 avatar
            MoDo

            Sergio Marchionne praised what you just said in a recent interview – “we were faced with death, “they” were not, and its why “they” didn’t change and we did” or something to that effect. I can’t recall the interview, it was 3-4 months ago at a university and Steve Rattner was also there – its on YouTube in its entirety and a great watch.

          • 0 avatar
            highdesertcat

            psar, for a while there GM was Government Motors.

            But, hey! That’s the new America. And I’m OK with that because I won’t be buying GM products.

            All those GM fans deserve whatever they get, even if it kills them!

  • avatar
    Volt 230

    A couple of days after getting praise for moving some production out of Mexico into the US, they screw up again with this news.

  • avatar
    Mandalorian

    I can’t believe how popular these things are, they are very dated compared to their competition. Still 2009 Transitional GM products.

    It’s about time for a refresh or better yet redesign.

    • 0 avatar
      ixim

      Perfectly adequate cars, if nowhere near cutting edge, well built after 5+ years of production! lots of $$$ on the hood = record sales currently. Redesign coming in 2016; it will probably fall short of the Japanese competition but be an improvement over the current Thetas. Too bad about Oshawa; but the Mexican plants’ quality is also perfectly OK.

  • avatar
    Gardiner Westbound

    Ontario’s auto manufacturing industry is a dead man walking due to noncompetitive labor, electricity, heating and realty tax costs and a longtime hostile union that enjoys favorable labor laws and lax enforcement. Canada cannot afford the massive subsidies necessary to compensate for these issues.

    • 0 avatar
      psarhjinian

      Ontario’s tax rates are quite low, and the electricity costs aren’t out of line versus American assembly (it’s only high versus Quebec, who has even less manufacturing). Labour isn’t a huge percentage of the cost either way, and Oshawa was actually a _very good_ plant in terms of quality and labour costs in independent studies.

      This is first-world manufacturing malaise in general, and several years of Dutch Disease in particular. The commodity-driven high dollar was a boon for Alberta and Saskatchewan, but did Ontario no favours whatsoever.

      • 0 avatar
        iMatt

        No love lost. After struggling miserably in Ontario for a decade, I’m glad to be out west.

        The powerful unions act as gatekeepers to industry while making it extremely difficult to find any kind of meaningful work, even in the trades. (My time in Quebec proved even harder.)

        I used to be a proud Ontarian, not any more. The grass truly is greener on the other side.

      • 0 avatar
        shaker

        I had to look up “Dutch Disease” – Now I get it.

        The US is in the midst of a fracking boom that will have unknown (and possibly similar) consequences.

        Unless massive cracking plants (to make plastics) are built to utilize the glut of natural gas, exports are likely to increase to keep the price up – meanwhile, tax avoidance seems to be built into the frackers’ business model, while their operations are quickly deteriorating the surrounding infrastructure.

    • 0 avatar
      ect

      “Ontario’s auto manufacturing industry is a dead man walking”

      Which of course explains why Chrysler is investing heavily in Windsor for the next-generation minivans. Without subsidies.

      Political bias seldom corresponds to reality.

    • 0 avatar
      Arthur Dailey

      Don’t blame the labour laws or the union. Both have changed significantly over the past 2 decades.

      Blame bad management, currency exchange rates, high electricity rates, environmental laws, an American government that (unofficially) is coercing American companies to return as many jobs as possible to the US and free trade agreements with 3rd world nations.

      • 0 avatar
        Lorenzo

        Most of those problems sort of exist on both sides of the border. GM is playing its old game, and realizes the Ontario government is too tapped out to provide more subsidies. The union is so weak it had to merge, and the value of the looney has dropped, so now’s a bad time to close Oshawa with conditions getting more favorable, but the name of the game for GM is subsidies.

        Chrysler is staying in Windsor because it’s their biggest plant, one of their most advanced, and it’s cheaper to upgrade the existing minivan lines for the next generation than move. There’s room in that plant for additional lines if Sergio wants to add new models.

        The Brampton plant might be in danger if Charger/Challenger/300 sales waver, or updates don’t materialize. Even then, Brampton might be able to accommodate additional Jeep production, with the Toledo assembly going flat out now, and new Jeep models coming soon.

        Both companies are subject to the same conditions, but one of them is still up to its old tricks.

    • 0 avatar
      MoDo

      Burger King just moved to Canada for tax purposes.

  • avatar
    Potemkin

    General Motors is third in sales in Canada with the loss of OSHAWA they will drop even lower. Many life long GM employees and buyers of their products who I have spoke to say they will not buy another GM product if OSHAWA closes. If GM continues to move production out of Canada and the US their sales will decline as fewer jobs paying less translate into less disposable income which means buying Korean.

  • avatar
    alsorl

    Maybe GM can update the interior with all the money saved on the Mexican worker. Duel climate control should be the first update.

  • avatar
    Big Al from Oz

    I do think the Canadian situation is going to end up similar to what is occurring in Australia.

    I do see vehicle components manufactured more and vehicle assembly less. This is natural, why not ‘offshore’ the menial labour intensive work.

    The Canadian government, auto manufacturers and CAW/UAW have made consecutive poor decisions for decades now. You just can’t buy jobs at the end of the day.

    I say let the less or unprofitable aspects of Canadian vehicle manufacturing go ‘offshore’.

    If I was a Canadian I wouldn’t want the Province or national government to continually fork out massive amounts of tax payer dollars for jobs.

    Let real jobs and business flow, the money dumped into a uncompetitive area of an economy is just plain ridiculous.

    Invest the money elsewhere or pay down debt and let the unions, manufacturers resolve their business problems.

    Unions have this view that they should be a part of the managing process. Well if the unions and business enter into a contract and it fails, let everyone lose. It isn’t the average ‘Joe’s’ problem.

    • 0 avatar
      Eyeflyistheeye

      If ifs and buts were candy and nuts, what a merry Christmas it would be!

      Go take care of your own country, your own neighborhood and your own household before you pretend to be king of the world on TTAC and telling folks who live in places you’ve never been to what their economy should be like.

      • 0 avatar
        mikey

        As usual BOFO hasn’t got a clue what he is talking about. I live 5 miles from the plant ,and worked there for 36 years.

        Some facts.

        The Oshawa consolidated plant runs only ,the over flow Equionox production from the Ingorsall Cami plant. Fully assembled ,and welded ,body in white vehicles are shipped to Oshawa consolidated for final paint and assembly. Consolidated also runs the old Impala fleet car. All on a one shift basis. Oshawa consolidated, was scheduled to close in June 2014. If we’re lucky the plant might run until early 2016. Personally ,I’m thinking mid 2015.

        Oshawa Flex ,with its own contiguous stamping plant, is one of the most modern, up to date auto manufacturing facility’s in the world. Oshawa Flex can run any configuration of any vehicle in production today. Full vehicle changeovers can be accomplished in a fraction of the time that a conventional plant can.

        Loosing the Equinox is no big deal to Oshawa at this time.

        • 0 avatar
          RobertRyan

          @Mikey,
          Agree with Big Al from Oz on this. We had some new plant put in by Toyota but it did not save the day for Toyota here, other factors doomed the plant. I have a feeling higher Canadian costs are impacting severely on the viability of Canadian production. Closeness to the US is not going to be a saving grace.

          • 0 avatar
            mikey

            Robert …..To a certain extent , I agree with you. GM will look for the over all lowest cost. It’s a fact things are as a grim as they have ever been here.

            With Ford ,Chrysler , Honda and Toyota all having a foot print here . I can’t see GM pulling out.

          • 0 avatar
            RobertRyan

            @Mikey,
            When one company makes a rush for the door, others quickly follow as we have found out, the t the supplier situation becomes untenable.

        • 0 avatar
          highdesertcat

          mikey, you are too close to the situation to be able to see clearly what is trending here.

          Quite some time ago I mentioned the great shake up in the American auto industry that I believed would happen by 2016.

          This reshuffling of production is just the beginning. There’s a whole lot of shakin’ goin’ on. Not just with GM, but also with Ford, Toyota, Mazda, BMW, VW and Mercedes. Even Fiatsler is going to be a player before 2016.

          The UAW has a vested interest to bring the SRX plant back to the US, for a multitude of reasons. Their guaranteed “profit-sharing” plan without fear of losses is just one of the reasons.

          But the UAW doesn’t give a hoot about plants in Canada. If they did, the UAW would vigorously lobby against this move with GM management.

          The big shake-up is on track. It may be politically induced to bringing back the SRX plant from Mexico to the US, but it is not politically viable, nor tenable, to lobby against this Equinox move because it will net GM billions in profit; profits that will be used to off-set the losses from the recalls.

          • 0 avatar
            mikey

            HDC I’m not sure of the specific language in the UAW/ Spring hill contract. I do know that it does differ from the UAW national agreement..

            UNIFOR also has a different agreement at the Cami Equinox plant.

            This statement may get me into $hit.

            Here goes,… Back in 1984 we separated from the UAW to form the CAW. At the time there was quite a few dissenting voices. I was one of them.

            From 1984 to 2005 we prospered. We had the Auto Pact. {sell a vehicle here, build a car here. We enjoyed a 40 cent dollar advantage. We had a government sponsored health care system. Cheap hydro. Our labour laws won’t allow strikes for local issues, during the life of the agreement.

            The CAW was on top of the world. Our brothers and sisters in the UAW were facing plant closures, massive lay offs etc. We working 6 days a week on three shifts.

            With in a short period of time we got hit with Canada-US free trade, then Nafta. The Auto pact got torn up. Gas hit 4.50 a US gallon. The Canadian oil sands, fracking and all, drove up the Loony.

            to be continued

          • 0 avatar
            highdesertcat

            mikey, “This statement may get me into $hit”

            Yeah, that’s one reason I kept my comments re:profit sharing brief and concise and urged others to research it on their own before spouting off about things they knoweth not.

            I was not at liberty to even bring it out in the open, but I did receive a synopsis from a close personal lady friend of the family that illustrated how and why this all came about.

            As we both know, this kind of stuff rarely sees the light of day, and if it does it often cannot stand up to the bright sunlight.

          • 0 avatar
            mikey

            By 2005 the future was looking grim for GM and the CAW. Nobody on either side paid any attention.

            Lets party like its 1985.

            We started to lose shifts, we opened our contracts up and traded retirement packages, for job cuts. The big crunch hit in late 2008. By the end of 2009 the CAW had lost 60 percent of its membership. along with 60 percent of their income

            Those at the top still drew thier big salarys and nobody got cut back. The wannabees and hangers on were all still there.

            Well surprise ! the CAW ran out of money.

            At this point they should have put their hat in their hand, and their tail between their legs. They should of begged the UAW to let them back in.

            Well they didn’t do that at all. Instead they hooked up with the dying paper workers union.

            Think of Studebaker and Packard joining up in the fifties. How did that work out?

            About as well as UNIFOR will

          • 0 avatar
            highdesertcat

            mikey, I do not believe that the UAW would want any alliance or partnership with any other union unless the UAW calls all the shots and manages all the money.

            This would be a topic for the fans of unionization to speak about. And I’m not a fan of unions. My mom and dad were in unions. And they did not like it either.

            I’m neutral on unions. I believe it is up to the employees to choose to organize and have union representation, or not.

            Personally, I don’t see the need for unions in this day and age.

            But getting employees to pay dues is such a lucrative enterprise, that I fully understand the motivation to get as many employees to sign up as possible.

          • 0 avatar
            Arthur Dailey

            Mikey,
            Great synopsis! Wonder what the workers think of Bob White now? And we still show industrial relations and Canadian studies students ‘The Final Offer’ documentary providing a history of the UAW-CAW breakup.

        • 0 avatar
          Big Al from Oz

          @mikey
          It’s nice that you think and you do care about something. But, in actual fact I do see the ‘Canadian’ problem that you apparently can’t or DON’T want to see, that’s the slow demise of vehicle assembly.

          Canadian’s shouldn’t pay money into waste. Why is it that profitable businesses are propping up uncompetitive business.

          Imagine if one of your kids is a dingaling and a sponge, always on the take, would you continually give him money or eventually tell him to get on his bike and get the hell out of house and home and grow some balls?

          This is what should happen to uncompetitive industry.

          Why not advance the more profitable industries rather than ‘has been’ industries attempting to compete with developing nations. Unions and business need to mature in this arena. Look at what business/industrial activity suits a particular market/country.

          Why don’t the Canadian’s prop up Tee Shirt manufacturers as well.

          I have nothing against unions. But if a union and business strike a deal, then that deal is between them, not the Canadian people. If it doesn’t work out, then suck eggs. That’s the cost of poor business management.

          So, if the Canadian (all manufacturers) vehicle industry continually asks for handouts, then tell them to get on their bikes.

          • 0 avatar
            mikey

            Right, BAFO. They get on their bikes and pedal to the nearest State, County, Province, or Country that’s willing to offer incentives.

            All big manufactures, Union, and non, play the game.

            So it all comes down to “fish or cut bait”

          • 0 avatar
            Big Al from Oz

            @mikey
            Yep, corporate/industrial welfare is the form of welfare that should be stopped.

            This money could be better spent on something else, ie, debt.

            Whilst companies attempt threaten manufacturers of removing operations if governments don’t pay up the public should tell the government don’t pay.

            We did that here thank goodness. Why do I want to subsidise a Ford or GM purchaser?

            I bought a Mazda?

            I suppose you believe McDonalds should be subsidized if they have the wrong menu and employees that work that have bowed down an abided by what their socialist CAW/UAW leaders tell them.

            If the CAW/UAW were that great do you think they would be in the position they are in now?

            So, how can they have input into any business regarding profit?

            Yeah, get on your bikes.

      • 0 avatar
        Big Al from Oz

        @Eyeflyistheeye
        And who were you yesterday?? ;)

  • avatar
    tuffjuff

    My venerable 2013 Chevy Equinox, the only vehicle (and one of the only years of Equinox production) that GM hasn’t recalled, that I’m aware of.

  • avatar
    turboprius

    That Captiva my parents had for a week in the winter was actually a pretty good car. A lot better than what I’d read on here. Granted, theirs’ only had 3K, but I liked it (except for the awful stereo). Mexican, old GM right there.

    Maybe GM could keep the Captiva, freshen the styling, and modernize it. By modernize, I mean MyLink, collision avoidance systems, premium audio, ventilated seats, modern GM interior appointments, etc. 32 max for an LTZ V6.

  • avatar
    Nick

    I am well aware of the realities of business. However, it seems every company desperately wants loyal customers, but they haven’t got the slightest loyalty to employees or communities. On the one hand, I’ve actually considered buying an Impala for my daily driver and in some way I’d be contributing to the Oshawa assembly plant. On the other hand, I’d bitterly resent putting money in GMs pocket if closing Oshawa is their intention.

    • 0 avatar
      Lou_BC

      @AFX – I know your post is tongue in cheek but those Mexicans crossing the border aren’t stealing UAW jobs. Maybe the UAW should unionize heavy manual labour since they aren’t having much luck with the transplants.

      These are the vehicles currently made in Canada.

      •Buick Regal
      •Cadillac XTS
      •Chevrolet Camaro
      •Chevrolet Equinox
      •Chevrolet Impala
      •Chrysler 300
      •Chrysler Cargo Van
      •Chrysler Town & Country
      •Dodge Charger
      •Dodge Challenger
      •Dodge Grand Caravan
      •Fiat Lancia Thema
      •Ford Edge
      •Ford Flex
      •GMC Terrain
      •Honda Civic
      •Honda CR-V
      •Lexus RX 350
      •Lexus RX 450h (Hybrid)
      •Lincoln MKT
      •Lincoln MKX
      •Toyota Corolla
      •Toyota Matrix
      •Toyota RAV4 and RAV4 EV

      Isn’t the Lancia Thema just a rebadged 300?

      • 0 avatar
        AFX

        “Maybe the UAW should unionize heavy manual labour since they aren’t having much luck with the transplants.”

        Or Manuel labor.

        I heard Ford is changing their advertising slogan to “Quality is job Juan”.

  • avatar
    AFX

    So much negativity about GM sending jobs to Mexico !. You guys are looking at it from the wrong angle. These days it seems everybody is complaining about the flood of illegal immigrants across the border from Mexico into the USA. What GM is doing here is trying to stem that flow of illegal immigrants by sending USA jobs to Mexico, thereby eliminating any desire for Mexicans to want to come to the USA. It’s a BRILLIANT move on GM’s part, no jobs in the USA means no illegal immigrants crossing the border looking for work here. You guys should be thankfull that GM cares so much about this country !.

    The only difference in product quality from the vehicles being made in Mexico is that Equinox owners can expect to find Corona beer bottles inside their car doors, instead of labatt or Molson cans.


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