By on December 18, 2019

GM Canada

Canada had just turned 40 and Teddy Roosevelt was running a zoo out of the White House when the first automobiles rolled out of Oshawa, Ontario.

Starting in 1907, Oshawa built vehicles of the McLaughlin Motor Car Company, with the cars carrying Buick drivetrains shipped in from Flint, Michigan. An early alliance! Thank the close friendship between Sam McLaughlin and William Durant for that partnership. The Chevrolet brand set up shop at the lakeside assembly plant not long thereafter, and in 1918 General Motors of Canada Limited was formed from McLaughlin and Chevrolet Canada.

Fast-forward 101 years, and the last GM vehicle has left the factory. Workers put the finishing touches on the final vehicle today.

As a way to keep the plant humming through the end of its soon-to-expire labor contract, GM Canada shipped unfinished previous-generation Chevrolet Silverado and GMC Sierra from Fort Wayne, Indiana to Oshawa for final assembly. Well, nothing lasts forever, and the same can be said of those full-size pickups.

The Canadian Press (via Global News) reports that Wednesday saw assembly of the final pickup, paving the way for 2,600 job losses at the country’s oldest auto plant. The plant’s previous products, the Cadillac XTS and Chevrolet Impala, ceased production earlier this fall.

“This has been coming in slow motion, and suddenly it’s here,” Joel Smith, a union organizer with Unifor Local 222, told CP.

“It’s not lost on anybody that this is the birthplace of General Motors. This is where it started, and that they just walked away from this, from vehicle production after over a 100 years. It’s hard to stomach.”

The current facility rose on the site in 1953, cranking out a vast range of products over the following 66 years. Among those early products, the Pontiac Strato Chief and Chevrolet Biscayne. The first signs of trouble came during the recession, when the car assembly plant’s adjacent truck facility closed its doors. Worries rose during the economic recovery, with the Chevrolet Camaro bowing out of Oshawa in 2015 and the Chevrolet Equinox disappearing in 2017.

2016 Chevrolet Silverado crew cab blue

Then came word that GM would close five North American plants; four in the U.S., one in Canada. While Detroit-Hamtramck was spared CEO Mary Barra’s cust-cutting wrath in the latest UAW-GM labor contract, Oshawa Assembly did not magically spring new models. Some 300 jobs will be retained at the site as the plant transforms into a stamping facility for GM body panels and an autonomous vehicle test facility. (A 55-acre test track, funded with $170 million in GM cash, broke ground not long ago.)

Of the 2,300 workers who stand to lose their jobs, 1,200 qualify for full retirement packages. Others will head to GM’s Ontario two technical centers, the propulsion plant in St. Catharines, or its remaining Ingersoll assembly plant. Still others will receive various buyout and lump sum packages, while the rest are eligible for up to $6,000 in retraining cash, thanks to a fund created by Unifor with the help of the Ontario government.

In an open letter published earlier this week, GM Canada President Scott Bell claimed the loss of assembly operations is “emblematic of wider changes in the economy,” adding that “Change is hard and 2019 was especially so” for the plant’s workers and broader community.

“Positive transformations are driven by a clear sense of greater purpose,” Bell wrote. “GM Chairman and CEO Mary Barra has always made that crystal clear. That means taking the lead in self-driving technology, electric vehicles and new business models for urban transportation. Our vision is a world with Zero Crashes, Zero Emissions and Zero Congestion. It won’t come without hard work and change, but in Oshawa, we are embracing that vision for our future.”

For many workers, their future will not include Oshawa.

[Image: GM Canada]

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25 Comments on “Canada’s Oldest Auto Plant Runs Out of Vehicles...”


  • avatar
    Arthur Dailey

    I shed a tear. The end of a century of history. Oshawa and GM were tied together for that long. Just one example being the Oshawa ‘Generals’ hockey team playing out of the GM Centre. Even Oshawa’s minor hockey teams were known as The Generals.

    When the workers can consistently win corporate awards for quality and efficiency, yet that is still not enough to save their jobs, what more can be expected of them?

  • avatar
    Mnemic

    GM didn’t leave Oshawa, they left the union.

    • 0 avatar
      Arthur Dailey

      If that were true why are other unionized GM assembly/manufacturing plants still open?

      Oshawa’s workforce consistently had the best record among GM factories worldwide for quality and efficiency. Union and non-union included.

      • 0 avatar
        Mnemic

        They just closed 5 plants, after closing up I forget how many in recent years past. If that isn’t enough proof for you I don’t know what is. GM can’t spend $2500 more to build a car than Toyota, then sell it cheaper – while tanking in quality scores because they had to use cheaper parts to build it. That’s a recipe for chapter 11.

        As for the workers, go take some business classes. GM head office out there is always hiring and can’t find people because nobody will commute from Toronto nor will they move there. BMW had to move their head office to Markham for a reason!

        • 0 avatar
          Maymar

          Do you care to source that $2,500 per car? Assuming the plant made 200,000 cars per year, that’s an extra $500,000,000 spent. Split amongst the 4000 quoted staff of the plant, that means each worker would be costing an extra $125k per year.

          To try and keep it a straight comparison, the GM union deal is available online through the Unifor website – it quotes most unskilled positions at approx $36/hour, although if I’m interpreting that correctly, they don’t hit that base rate until year 10, and start off around $22/hour. Toyota Manufacturing Canada lists their compensation on their careers section, and it’s right in the same ballpark, start at $22, go up to $36. So, is each worker pulling in over $100k of benefits? Or is that comparing the cost of a unionized worker in Canada or the US against someone in Mexico?

          • 0 avatar
            mikey

            So nobody wants to live in the Shwa ????

            Right … So that would explain why they can’t build subdivisions fast enough to meet the demand for $500 K houses .

          • 0 avatar
            tomLU86

            Arthur is spot on.

            Oshawa consistently did well according to Harbour Report that measures hours per vehicle (Oshawa often bested the best from a Toyota and Honda) and JDPower.

            The salaried and hourly workers there did a superlative job.

            GM knee this.

            The biggest factor in keeping a plant open is what it builds.

            GM, no automaker, can snap their fingers and change from one car to another. Yet even here, Oshawa excelled. It pulled off building the old Silverado for 2 years with minimal investment.

            Compare that to FCA converting Sterling Heights from Chrysler 200 to Ram. It took forever.

            The Impala was not selling well. It was a good car. Consumer Reports loved it in 2013. Yet when launched, GM raised the price too much, so it never sold in volumes like the old Impala

            GM must have thought it would, even with a $5-$10k price increase (which is delusional) , since they tooled TWO plants to build it, and doubled their fixed costs. Pretty stupid for a bunch of ostensibly intelligent people. But those decisions were made before Mary Barra became CEO.

            As far as assembly cost, if it takes 20 hours for an assembly plant to assemble a car in the US, from the news covering the strike, I think GMs UAW plants average $61 per hour, so that’s $1220 in assembly labor. I think Canada is $50-something, and I’ll guess Mexico is $10. These costs include medical, pension, vacation, and are NOT what workers are paid.

            On that basis, there is no way to compete with Mexico on cost. I’m sure that if GM could, they would move all their plants to Mexico or China.

            The CAW/Unifor did not go along with the two-tier wages the UAW did, and my sense is that is why GM abandoned Oshawa, which is like Flint, part of GMs origins. Those 2-tier wages and closures led to a 40 day strike. How much did that cost? And GM agreed to reopen the Hamtamck plant later, which is being closed next month.

            If, no when, GM’s (and Ford’s) strategy of abandoning cars for “hi-margin vehicles” blows up, and it’s only one fuel shock or a few interest rate points from happening, then they will have no cars. Will they have enough cash to ride it out? Or will they go bankrupt?

            As for Bell, his comments that “the loss of jobs is emblematic of wider changes in the economy” and his BS jargon about “transformation” eloquently demonstrate that to be a GM exec, one must be an accomplished sycophant. May his next assignment be to Ramos, Mexico, complete with body guards.

            And being a sycophant is the rule in corporate America today, a sign that America ain’t what it used to be in some regards. When the General was THE AUTOMAKER PAR EXCELLENCE, the CEO and execs made much less than today’s underwhelming crew. Today Toyota is arguably the best run automaker. How much do their execs make, compared to their US and Canadian workers?

            Note that Oshawa was making profitable trucks until last week, that GM could probably use to make up for strike losses; also Ram is eating GMs full size truck sales and will probably outsell Chevy. Good luck getting them back.

            I’m not Canadian, and I’m not a union man, but I feel for Oshawa. They did a good job. Very good job. Today, that is not enough. Live under your means and be prepared for anything. At least they saw it coming.

          • 0 avatar
            28-Cars-Later

            @mikey

            Coming soon, a handful of 80 story condos.

            @Mnemic

            “GM can’t spend $2500 more to build a car than Toyota, then sell it cheaper – while tanking in quality scores because they had to use cheaper parts to build it.”

            Yes, they’d much rather spend less while still using inferior components. RenCen isn’t going to have an epiphany and say “we’re going to build a quality product now”, no chance in hell – a leopard doesn’t change his spots.

            GM is a P.R. China focused company now and mark my words will be relocating most operations there over time. Oh and I’ll point out again, any savings GM realizes will not be passed on to the customer, he only gets the headache which results from inferior components and third world assembly.

        • 0 avatar
          Arthur Dailey

          @Mnemic,there are just so many fallacies in your posting that I am not sure where to start.

          1) Your $2,500 figure is way off. The actual extra cost to assemble in Oshawa in 2010 was just over $200. And with the concessions that the CAW gave since then, it has probably decreased.
          2) There is a very large labour force available in Durham Region. And a skilled labour force thanks to the local Ontario Tech University and Durham College. Plus Centennial College and the labour force of Scarboro is less than a half hour away. Quite a large number of GM workers commute from Port Perry. I knew one in assembly who commuted from Kingston.
          3) VW moved their Head Office to Durham from Scarboro years ago. Demonstrating that there is sufficient labour.
          4) BMW was not assembling in Durham. So a totally different labour market..
          5) “Nobody will move there.” Yeah sure that is why so many homes are being built in Durham. And why the GO train now runs from Toronto to Durham, all day.
          6) The commute to Oshawa is particularly easy with the 407 reaching from Hamilton to Highway 115. And you are largely going against traffic. Two of my neighbours made the drive out there for decades.
          7) Regarding business classes. I can supply you with a long list that you might enjoy enrolling in. In fact I may have contributed to some of the textbooks that you might be using.

        • 0 avatar
          tomLU86

          Labor is a big part of assembly cost, yes.

          How much more does it cost to ship a car or truck from Mexico? It sure does not cost less

          How much does it cost to ship parts there?

          • 0 avatar
            Arthur Dailey

            @28Cars posted ” Oh and I’ll point out again, any savings GM realizes will not be passed on to the customer, he only gets the headache which results from inferior components and third world assembly.”

            I agree 100%.

            Furthermore what is more costly, assembling a vehicle with little to no defects but paying more for the labour, or assembling a vehicle with multiple warranty claims/work/complaints but paying less for labour?

            As for transportation costs which @Tomlu86 addressed. What are the wait times at the USA/Mexico border. And everytime that a trailer crosses that border without being unloaded and inspected what are the chances of something illegal being smuggled inside it? The fear/cost of this is much less on the US/Canada border.

          • 0 avatar
            28-Cars-Later

            @Arthur

            “Furthermore what is more costly, assembling a vehicle with little to no defects but paying more for the labour, or assembling a vehicle with multiple warranty claims/work/complaints but paying less for labour?”

            I imagine someone has crunched the numbers, my guess is the latter because they will simply find ways to *not* honor warranty claims. Similar to how insurance works here in the US, they will go out of their way to *never* pay out.

            Even after you factor in the $500/hr attorneys and bribes, er lobbying, to our “elected” representatives, my guess is the model they have built pays more than the model of decades past. Technology allows for the spread of tyranny, not freedom. I’ve never read the whole paper but I think the Unabomber’s thesis was along those lines.

          • 0 avatar
            eng_alvarado90

            @Tom and Arthur, it’s not as simple as that.
            The shipping costs for raw materials as well as full vehicles from Mexico can be cheaper than some places around the US-Canada border, depending on the dealer those vehicles are headed to.
            The three largest markets in the US are California, Texas and Florida. Toyota, GM, FCA and Ford have Mexican plants less than 500 miles south of the border, while Nissan, Mazda and VW are located about 1000 miles depending on the port of entry. Guess who has the lead on shipping costs for those markets as well as other states nearby? Crossing times are also quick enough as most suppliers work with some kind of trusted supplier certificate like C-TPAT or BASC, which pretty much eliminates the inspection while crossing the border. Most ports of entry have special lines for commercial transportation as well as dedicated lines for trusted Suppliers/merchandise. Suppliers working south of the border also aim for those certificates, otherwise they loose competitiveness. It’s been pretty much dialed in since NAFTA.

          • 0 avatar
            Arthur Dailey

            @Eng: Thanks. Yes the shift in US population has made a difference to manufacturing in Ontario and the American ‘rust belt’.

            The largest American markets used to be fairly close to the Canadian border. That has changed.

  • avatar
    dukeisduke

    Wow, 1907. It really is the birthplace of General Motors, as the McLaughlin-Buick alliance began a year before GM came into existence (1908). The McLaughlin-Buicks get some coverage in a Buick marque history I own (“The Buick”).

  • avatar
    mikey

    Its is a sad day.. The older/senior employees received a nice package. The younger second tier folks were fairly well compensated .

    My sympathy is with the 37 -50 year olds with 16-17 years in . With only two other facilities the “GM Gypsy ” concept works a lot better in the USA than Canada.

  • avatar

    when your marketing sucks, production suffers.

  • avatar
    Jeff S

    A 59 Buick in the picture above.

  • avatar
    28-Cars-Later

    I’ll pour one out.

  • avatar
    PrincipalDan

    Consistently ranked high for quality of assembly there, but then GM has a habit of that sort of stupidity.

    “High quality assembly, experienced employees? Can’t have that.”

  • avatar
    jkross22

    GM – Barra – 21.8mm in total comp
    Ford – Hackett – 17.7mm in total comp
    Toyota – Toyoda – 3.6mm in total comp

    Figures are from 2018.

    Looks like domestic auto CEO’s know no concept of shame. That’s a lot of money for doing a bad job.

    • 0 avatar
      ToddAtlasF1

      To be fair, Toyota’s CEO doesn’t have to make the sorts of hard decisions that come with dismantling a collapsing corporation. It’s probably because he does a better job making moderately challenging decisions though.

  • avatar
    Jeff S

    The hard decision for Barra and Hackett is how much of their prospective companies can they sell off or close to increase their compensation. Do a bad enough job running a corporation and it might get sold off to a larger foreign owned corporation and get a golden parachute in return. Toyota’s CEO is more competent. Also the Japanese take more pride in their work than many Americans.

    • 0 avatar
      Arthur Dailey

      I’m not sure if that is cultural or due to management practices. Management at the D3 was if not lacklustre, then largely downright incompetent for most of the last 45+ years (Iacocca excepted).

      As they say “a fish rots from the head”.

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