Faint Hope for GM's Oshawa Assembly Ahead of Jan. 7 Decision
It isn’t looking good. There’s a greater-than-likely chance we’ll soon have a flexible yet unwanted assembly plant sitting vacant on the other side of the lake from Rochester, New York, joining two transmission facilities, Detroit-Hamtramck Assembly, and Lordstown Assembly on GM’s Island of Misfit Plants.
The union representing Detroit Three automakers north of the border is fighting to keep it open, buying up pages of ad space in Detroit newspapers and taking its case to the loftiest denizens of the Renaissance Center. In a week’s time, General Motors will either give the autoworkers of Oshawa something to be thankful for, or squash any remaining hope.
Leading up to Christmas, GM Canada and Unifor sparred in carefully timed press conferences and press releases. Returning from a “respectful but emotional” Dec. 20 meeting with GM brass (a meeting that didn’t include CEO Mary Barra), Unifor president Jerry Dias had strong words for the company.
“They truly have gone too far,” Dias said of GM’s decision to stop allocating product to five plants while axing six models. “Why betray those who are buying your products? Why penalize workers in two nations who are generating the most profits?”
Roughly 200,000 GM vehicles roll out of Canadian plants annually, Dias said, while Canadian consumers buy some 300,000 or so GM vehicles each year. In Mexico, the country GM Canada’s lost product to in past years, residents don’t take home quite as many of the automaker’s vehicles. On a per capita basis, it’s certainly far less.
Of course, GM will do whatever it wants, and Unifor’s assertion that its 2016 collective agreement holds the company to keeping its hands off the plant until September 2020 hasn’t had much of an impact on the bosses in Detroit. The same day as the press conference, GM Canada fired back with a list of “facts.”
“GM is committed to Canada and we are not going anywhere,” the company stated in a public posting. “Our dedicated remaining workforce is still well over 5,000 Canadians.”
The company’s CAMI Assembly plant in Ingersoll, Ontario and St. Catharines Propulsion Plant in St. Catharines will remain, the company stated, nor are GM’s Ontario technical centers, cold-weather testing facility, Toronto mobility hive, and parts distribution centers going anywhere.
Promising retraining funding for workers who choose not to retire, GM refuted comments made by Dias, saying it hasn’t built a new plant in Mexico in over a decade. GM Canada sources less than 10 percent of its product from Mexico, it added. In response, Dias pointed out that while this is true, GM has invested in expanding its Mexican capacity.
The Mexican-built 2019 Chevrolet Blazer could have been built in Oshawa, Dias said. Instead, the plant is scheduled to go dark by the end of 2019 after final assembly of older-generation Chevrolet Silverado and GMC Sierra models ceases. The declining Cadillac XTS and Chevrolet Impala are also destined for execution in GM plan’s, which calls for a focus on electric vehicles and self-driving technology.
“GM understands that the best-case scenario for EVs might be 5 percent [market share] by 2025,” Dias said, adding that if crossovers and trucks are where the buying public’s interest lies, Oshawa “has one of the best paint shops in the industry.”
The union boss said that GM didn’t completely shut the door during the meeting. The automaker will get back to Unifor by January 7th “about whether they will work for a solution going forward,” he said.
Meanwhile, if the most likely decision does come to pass, Automotive News journalist Larry Vellequette has an idea: Make Oshawa Assembly available to any automaker that wants it, for the price of one dollar. Be it capacity-seeking OEMs like Tesla, Volkswagen, or maybe a startup or contract manufacturer, a changing of hands would keep the city’s tradition of building cars (a practice dating to 1907) alive and “would go a long way toward mitigating the reputational damage GM would suffer across Canada if Oshawa is shuttered and left to die.”
Worthwhile proposal, pipe dream for depressed Canuck autoworkers, or both? Time will tell.
[Images: General Motors]
TomLU86 on Jan 02, 2019
I simply restated that GM's target objectives are exceedingly high for a company with a still considerable manufacturing footprint in the developed world. GM has been doing quite well. It could of course do better if these pesky Canadians were willing to work for Mexican wages, or even $10 per hour. However, GM could be managed better. For starters, with the 2014 Impala (which is now 5 years old and not being replaced), GM delivered a credible car with good reviews. However, it priced it as if it was a BMW, not a Chevy, hurting the car's volume. At the same time, where the "old" Impala was built in one plant, TWO were tooled up for the new one, making it even less profitable. These decisions predate Mary Barra. However, the new truck is all hers. I'll let the TTAC and auto press speak to that one. Suffice it to say, that truck will sell in lower volumes and for less money than it would have had GM done a better job of designing it. Is the new truck that much cheaper to make than the old one, to make it more profitable at a lower prices? I think it probably costs MORE to make. As far as autonomous cars, I think there is a lot of risk there, and the reward may not be commensurate. Data is the key to making money with what I consider to be tablets with wheels, and that is not GM, or any other carmaker's, strong suit. BIG GAMBLE. The decision to abandon cars...FCA did it (they are the weakest of the US carmakers) of necessity. Ford and GM didn't HAVE to. Yes, in theory, why make hamburgers when you can make more money selling big macs. IN reality, it's very costly and hard to change assembly lines. I did show my ignorance in that, if Oshawa can't legally stop making trucks, they cannot. Even if they are the 'old truck', rest assured, GM would not have go to considerable trouble and challenge to build trucks there if the profit per unit was not huge. Mary Barra may be worrying about HER job, hence her drive for even higher profits. That is bigger than her or any CEO perhaps--it's the culture. However, the CEOs are paid huge sums. I stand by my assertion that, if using cheap labor is better for the bottom line, since Chinese and Mexicans are just as industrious as North Americans, then why not hire Asians and pay them Asian salaries to run North American companies for the benefit of the shareholders. After all, Toyota and Honda are considered better-run than GM, aren't they?
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