By on December 31, 2018

2018 Chevrolet Impala, Image: General Motors

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.

2018 Cadillac XTS, Image: General Motors

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]

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29 Comments on “Faint Hope for GM’s Oshawa Assembly Ahead of Jan. 7 Decision...”


  • avatar
    Jack Smith

    I say fine GM 42 Billion USD NOW unless they increase employees in the USA
    we lent the scum company 13 Billion bail out time for payback if they are screwing America as a country. This is what happens when you let a low life run the company who is pilfering 22 million a year and screwing workers.

  • avatar
    Art Vandelay

    Does anyone want the plant? I mean Toyota/GM could crank out 500,000 a year at NUMMI so I’d think there is some room for improvement for Tesla at Freemont (plus the China factory). Ford or Chrysler aren’t looking for extra capacity and the Asian/Germans seem to be focused on building in the Southern United States (or Mexico) with respect to North American production. Toyota is already building in Alabama.

    • 0 avatar
      SCE to AUX

      Fremont could improve, but I think that 500k number is a strawman target since that was the volume of essentially one cheap compact car. Tesla has 3 different lines running larger, more expensive and complex vehicles, and so I doubt it can ever match that volume.

      Also, Tesla is looking forward to truck (pickup and semi) production, low-volume Roadster 2.0 production, and the mythical Model Y CUV. They’ll need more space.

      VW is looking at a huge expansion into EVs, but I’m not sure they can achieve any volume soon.

  • avatar
    mikey

    Picture this scenario …For the sake of argument, lets say Hyundai came along .. : ” yeah Hyundai could use that Flex plant and its contiguous Stamping facility “. …Great news eh ?

    So Hyundai shows up at the table, Cheque book in hand..? Hyundai officials look around the table : “W.T.F is Jerry Dias and the UNIFOR doing here ? ” Well you see, under Ontario Labour laws UNIFOR has succession rights . If Hyundai want to operate the plant, UNIFOR comes with the package.

    At this point, Hyundai walks out, Cheque book and all. Now the press gets a hold of this, and you can bet that UNIFOR will be dragged through the dirt . Even the hard left media will have a hard time siding with UNIFOR on this one. UNIFOR will need to go into heavy “damage control mode”

    Want to make it more interesting ? Hyundai waits a few weeks, then comes up with this jewel .” Hyundai will buy, and operate the former GM plant. “Hyundai will commit to hiring 2200 full time workers.” With one stipulation ..UNIFOR waives their succession rights….Throw that one at Jerry Dias. Let the SJW”s and the “humanitarian “side of UNIFOR mull that one over.

    The chances of this happening are pretty slim. That being said , it would certainly be entertaining .

    • 0 avatar
      SCE to AUX

      You paint a fascinating picture, and I can see it going that way.

      Whether Unifor is really interested in keeping jobs in the area, or only interested in its own preservation remains to be seen. I believe it’s the latter.

  • avatar
    crazyforwheels

    I am really angry with GM over the Oshawa plant decision.

    I’m a 64 yr old Canadian who has owned many GM cars since the early 1970’s. I’ve recently owned a 2014 Impala LT1, a 2016 Impala LTZ and now 2018 Cadillac XTS. Obviously I’m one of their best customers who bought these cars because they were Canadian made.

    But here’s what really steams me. The Canadian plant is pumping out the best two cars that Chevrolet has EVER made. I’ve had zero problems, great gas mileage (good for the environment), comfortable rides and I’ve been given compliments on these cars good looks to.

    I’m so angry, this could be my last GM. Barra likes her numbers, but she is definitely not in tune with her customers, and the unintended reactions.

    I’m not a GM employee or do I know a GM employee.

    But she still keeps dumping money into the low volume corvette.

    • 0 avatar
      Bill Wade

      Unfortunately too many others aren’t buying passenger cars.

      • 0 avatar
        crazyforwheels

        I would wager that if they actually stopped sloping the rear windows and put a trunk lid back on the cars, so the trunk was usable, it would help sales of cars.

        • 0 avatar
          Lorenzo

          Nobody mentions the design of modern cars as any sort of problem.

          If you’ve seen a sedan minus its front and rear clips and running gear, you might realize ease and economy of construction and assembly takes precedence over function, at least the function as desired by the buyer.

          The sloping roof, raked rear window, and tiny trunk opening are are just some of the compromises that make sedans less attractive than SUVs/CUVs.

          But don’t worry – just looking at the older boxy trucks compared to this year’s models will tell you that the process that killed user utility in sedans is already happening with SUVs/CUVs.

          • 0 avatar
            jatz

            “the process that killed user utility in sedans is already happening with SUVs/CUVs.”

            Yea, verily, but do you absolve aerodynamics to boost CAFE of any role in that?

          • 0 avatar
            JohnTaurus

            An excellent point, jatz.

          • 0 avatar
            Lorenzo

            Yes, Jatz, I agree the wind tunnel testing connected to mileage standards had an effect, as has crash testing, but when it comes to complex manufacturing, cost and ease of assembly dominate. The unibody existed long before EPA economy standards, and took over primarily due to the economics of assembly.

    • 0 avatar
      JohnTaurus

      There are a lot of good cars being discontinued. It isnt because they are GM (or Ford or FCA) products, they’re just the wrong product for the market at this point.

      The Asian and German manufacturers arent immune to this trend, they’re just far more heavily invested in attempting to turn the tide back towards cars (sedans). It isnt working, all of their sedans are on a slide downward just like their American competitors. Their strength does not lie in profitable trucks and BOF SUVs, so the fact that car-based utilities are selling well is the only thing that is saving their bacon.

      Those who already hate American cars are trying to make out like they’re too incompetent to succeed, and that is just confirming their own bias based on untruths and wishful thinking. The American manufacturers are very strong when it comes to light trucks, and that’s where the market is headed. Pretending it isnt so wont make it go away. Their cars, Ford’s PowerSh¡t transmission notwithstanding, are every bit as good, they’re just not in demand.

      • 0 avatar
        geozinger

        John, I agree with your assessment of the situation. But I feel I could add on to it a bit. One of the issues that the domestic auto industry did not deal with in the GFC was the overcapacity issue. We already had an overcapacity issue back in 2008-09, it’s only gotten worse. With the newest plants from Mazda, Honda and Toyota being opened in Mexico, they’re slowly rendering the US plants obsolete. Add that to the situation with tariffs and NAFTA, which will only make the anguish worse when it comes time for a reckoning.

        I keep hearing about this onslaught of electric cars coming from GM (and others), but I’m not seeing anything; no spy pix, no confirmation of tooling orders… Nothing. I live in Michigan and my company works with GM suppliers. It’s been rather quiet since late summer/fall, which having worked for suppliers before, usually means something is up.

        For those who are enjoying these historically low fuel prices right now: Thank the folks who are buying the Priuses, Volts, Bolts and Teslas. Their leadership into the EV world is causing more and more people to seriously consider a battery electric. In addition, we can thank the folks who have found the oil, their overcapacity is our gain. With hybrids, PHEVs and BEVs gaining momentum, short of a speculation crisis (like what happened in 2008), I don’t foresee huge increases in motor fuels.

        • 0 avatar
          PrincipalDan

          GM has been building plants to pie in the sky capacity since at least the first production of the W-body.

          That is the core of the problem.

          FCA is operating the LX plant at 80% capacity because they had a more realistic expectation of sales. I’ve heard reports that GM isn’t even operating the Equinox plant at that capacity.

          That’s what should worry Wall St. (and Main St.) about GM.

          • 0 avatar
            Lorenzo

            Funny thing about Wall Street – it pans Ford, whose base truck market is booming now and will hold up the company in a downturn, while buying in to GM’s autonomy/mobility talk while it culls models. It’s almost like the analysts have been beguiled by the Silicon Valley Next Big Thing syndrome. After all, they’ve hyped Tesla stock beyond all reason.

  • avatar
    Gardiner Westbound

    Mikey nailed it!

    In an earlier life I managed a large industrial park. The first question prospective lessees asked was what unions are in the Park. They walked out at the mention of the CAW/Unifor, testament to its longstanding reputation for confrontation and intransigence.

    What goes around comes around.

  • avatar
    seth1065

    Not sure what GM really could have done with the plant, cars are not selling, perhaps the blazer could be built there but how much does that add to the cost, I have no idea , but I assume mexico is cheaper , do they even have a union there, no idea, also I am assuming Canada is a more expensive place to do business vs Mexico. Would it be nice IF GM did the Blazer there, maybe ( not if you were in the Mexican Plant) but their job is not to be nice, if Canada wanted to keep GM in that plant they either had to do one of 2 things, cough up dollars now or added in a flyer when GM needed Money for the trip into bankruptcy and include a cause you gotta keep the plant open for the next 25 years , as far as I know they did not do either. I think they got rid of their ownership state ( Canda that is) It does not seem fair that a plant that pumps out good put together product gets passed over due to stuff not in the workers control but GM did now owe them anything not written in a contract.

    • 0 avatar
      JohnTaurus

      It was passed over for reasons out of GM’s control, as in high labor costs. You really think they’re shuttering plants out of pure meanness? They’re in business to make money. That doesnt mean they should continue to build poor-selling products that dont make money in a very expensive (again, as in labor costs) area.

      Yes, they could have built the Blazer there, but they stand to make more money off of it if it’s cheaper to manufacture. I’m not excusing what is happening, but I do understand why they’re doing what they’re doing. All major car makers have plants in Mexico for the same reasons: No unions and low wages.

      But Toyota can build cars in the US! Yeah, in the south where there are no unions and wages are lower. If GM built a plant in Alabama, 99% chance it would be unionized quickly. Do they treat their workers worse than Toyota does? No. Do they pay them less? No. But if it’s an American manufacturer, they’re going to be unionized here.

      • 0 avatar
        tomLU86

        Perhaps GM should build everything in China and Mexico.

        Oh, but one little problem. The US and Canadian government bailed out General Motors.

        They did so because GM’s previous management was unable to keep the company viable, and both countries felt it was necessary to keep GM afloat to “save jobs”–in the USA AND CANADA.

        In any case, GM, like any other ‘mature’ company has the assets (plants and people) that it has.

        It just can’t close an old plant in the US or Canada and build a new one in China or Mexico on a wholesale basis. It can do this gradually (and has been).

        But if labor cost is all that matters, it still takes time to outsource.

        What about the cost of management? How much do GM’s CEO and VPs make? How much to Toyota’s make?

        Why doesn’t the board of GM simply get rid of the current leadership and hire Asians–they seem to have a better track record for THEIR employers, and the cost their employers less money.

        Just a thought.

  • avatar
    JoDa

    The USA is bad enough but one would need to be an absolute fool to manufacture in Canada. Trump’s Deplorable Movement is only temporary and soon the Establishment Parasitical Elite will continue to push manufacturing offshore again.

  • avatar
    tomLU86

    GM’s officially stated profit and cash-flow targets are very high.

    They are akin to telling a 30-year old who has never won an Olympic medal in track to run a 4-minute mile.

    The main purpose served by these lofty objectives, and the company’s desire to lead in ‘autonomous’ in order to attain “zero congestion, zero emissions, zero fatalities” is to sate GM’s CEO’s big ego, so she can be in the same league as Henry Ford, Soichiro Honda, and Eli Toyoda.

    She is more likely to go down in history as Roger Smith.

    GM’s new trucks, Mary Barra OWNS them. That is GM’s most important product, in terms of profits. The press, from Car and Driver, to the Detroit papers, are fawning over the new Ram, not the new GM trucks.

    If there is a prolonged spike in the price of oil in the future, well, GM (and the other Detroit automakers) will have ceded that market to the Asians. Do you drive without insurance?

    The turmoil that will be caused by the salary layoffs may not be measurable, like the salary payroll savings are, but it will affect the bottom line–in a bad way.

    As for Oshawa, it consistently was one of GM’s better performing plants according to JD Power and the Harbour Report (cost).

    If Dias is serious, he needs to take this all the way—now. Give us a product, in writing, by Jan 21. Or we will stop making trucks on that day.

    If Oshawa stops making trucks, GM’s (if everything works out, we can make X billion) profit targets are not gonna happen.

    The workers are going to lose their jobs anyway.

    GM put the plant in a corner. GM overpriced the Impala. GM then was delusional, and put it in TWO plants (making it more expensive). So the car never hit it’s sale potential, despite a glowing assessment from Consumer Reports.

    GM needs Oshawa’s trucks NOW. Unifor should be prepared to play that card, if it is serious about keeping jobs in Oshawa.

    • 0 avatar
      Scott

      The trucks are only overflow, and are the old model not the new one, so really isn’t all that much leverage there (nor in the cars that they are left manufacturing). I like all the arm chair union bosses saying just do this or that. You have to remember that there are other plants with workers who will still have a job that will be affected by all these bone headed moves that are suggested, meaning that if the Union is too bone head they will loose those plants quicker than might happen otherwise. There are more people working at these other plants now than work for Oshawa. No body wants people to lose their jobs, and the Oshawa plant was always a good one,(but the union was more militant there than the other Canadian plants from what I understand) but it looks like it is going to close for sure (despite this last ditch effort), and if it doesn’t what is the Union going to give up to get product there, and how will it affect the workers at the other plants (it won’t be in a good way). I know that the salaried workforce is starting it moves to the other plants this month so it doesn’t look like it is likely to reverse, but weirder things have happened. Will wait and see.

      • 0 avatar
        mikey

        @Scott. ( “but the union was more militant there than the other Canadian plants from what I understand) ??

        From September 1972 to December 2008 I punched the clock at GM Oshawa..Yup…the UAW and the CAW made a lot of noise . A little “Sabre rattling”… maybe ? Militant ??? I never witnessed it .

        These days, private sector unions could be described as ” All hat no cattle “

    • 0 avatar
      mikey

      Just for the record . Work stoppages (wildcat strikes, lock out etc) during the life of the CBA are illegal ,under Ontario Labour Law.

      Should UNIFOR sanction, or even refuse to intervene during a work stoppage , GM can, and will, sue for lost production.

  • avatar
    dusterdude

    @tomLU86

    +1

    As a Canadian taxpayer, agree they should fight it as vigorously as possible. I’m not sure GM has fully calculated the negative view Canadians will have should the plant permanently close.

  • avatar
    JoDa

    TomLU86 just reveals why one would be a fool to manufacture in Canada. Yeah, it has to do with Mary’s big ego, LOL. Mary Berra is not a fool.

  • avatar
    tomLU86

    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?

    • 0 avatar
      Lorenzo

      Now that he’s out at Nissan, maybe GM can hire Carlos Ghosn – once they let him out of jail. The German companies are well-run too, and there are a bunch of former top execs from Porsche, VW, and Audi available…


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