Oshawa mulls life after plant’s demise

Doug Sanders, an Oshawa, Ont., city councillor, worked for 34 years at General Motors Co.

When Sanders started in 1976, he said, GM’s plant workers in Oshawa were seen as having golden tickets — good paying, stable jobs.

“They always assumed you were going to be OK, because General Motors was never going away,” he said in an interview.

On Monday, that assumption was dealt another — possibly final — blow after General Motors announced it would not allocate future products to several of its plants beginning next year, including its assembly in Oshawa, a city of 160,000 located about a 45-minute drive east of Toronto.

GM said its decision — which would leave the Oshawa plant and its more than 2,000 workers facing closure after 2019 — would accelerate the company’s “transformation.”

Even for a city that has learned to cope with the erosion of the local auto industry, the decision came as a surprise.

“It shocked me,” said Oshawa Mayor John Henry. “We didn’t get a heads up at all ... I got the call (Sunday) afternoon. Then I got a call back that said it was a rumour. Then I got a call again from somebody else that said it wasn’t a rumour . ... Then I finally caught up with General Motors and found out what was going on.”

Ironically, it was another transformation more than a century ago, that helped bring them together in the first place. In the 1870s, Robert McLaughlin Sr. was looking for a place to park his thriving carriage company. And McLaughlin, who was a manufacturing trailblazer of sorts, ended up moving the company from Enniskillen, Ont. to Oshawa, which was earning a reputation as a bit of an industrial powerhouse.

In its new home, the company, McLaughlin Carriage Works, would grow to become the biggest such business in the British Empire, according to a history of the family by the Parkwood National Historic Site.

Eventually, Robert’s sons, including Robert Samuel McLaughlin, who would come to be known as “Colonel Sam,” convinced their father that the future was horseless.

The McLaughlin Motor Car Company was formed as a result, and Colonel Sam was made president.

McLaughlin Motor Car was bought by GM in 1918, helping to “facilitate the formation of the Canadian operation of General Motors of Canada,” the history says, and Colonel Sam was again named president of the Canadian company.

“This year literally marks the 100th anniversary of General Motors in Oshawa,” said Jennifer Weymark, the archivist of the Oshawa Museum.

And during that time, she noted, GM has left its fingerprints all over the city, from street names (GM Canada’s headquarters are located on Colonel Sam Drive) to the city ’s lakefront park, which Weymark said was sold by the company to the city for one dollar.

Oshawa also played a big role in helping to bring the labour movement to Canada, according to Weymark, with GM workers going on strike in 1937 over (among other things) the right to have their union recognized.

In response, the Premier of Ontario at the time, Mitchell Hepburn, sent in his own police force, dubbed “Hepburn’s Hussars” and the “Sons of Mitches (or Mitch’s).”

Nearly 50 years later, negotiations between GM and the United Auto Workers reached a point where Oshawa workers began to get a bit rowdy.

“They’re crazy,” a union official says in the documentary Final Offer, which chronicled the 1984 talks. “Like dogs, pissin’ on the Globe and Mail box.”

But those contract negotiations also helped contribute to a break between the American and Canadian autoworkers, leading to the creation of the Canadian Auto Workers union.

When GM decided to close a truck plant in Oshawa in 2008, members of the CAW (which would later help form Unifor), blockaded the company’s head office in the city. They would disperse, eventually, after a court ordered them to do so.

The truck plant closure hit harder, Sanders said, forcing Oshawa city politicians to start trying to diversify the local economy.

Since then, much has been made about the city’s college and university. Suburbs have bloomed all over the north end. A former GM property near the heart of the city has been paved over for a Costco.

Mayor Henry said Oshawa wasn’t at any risk of becoming a bedroom community for people working in Toronto.

“Absolutely, not,” he said. “In the morning, the GO Train leaves with people on it but I’m proud to say people get off the GO Train to go to work or go to school in Oshawa.”

Still, Henry lamented GM’s apparent decision to depart.

“If their plan is to go to autonomous vehicles or electric vehicles, we’re graduating the very people they need to do that,” he said, referring to the automotive centre at the University of Ontario Institute of Technology. “It’s already here. Why not build it where the technology and the talented people were located?”

From a business perspective, the closures may have little to do with what Oshawa does or doesn’t have to offer.

The latest threat to Oshawa’s GM plant was predicted in 2014 by Joe McCabe, president and CEO of the U.S.-based AutoForecast Solutions. When the news broke, McCabe said he wasn’t surprised.

“This is a GM issue,” he said in an interview. “Too many plants, with too little utilization, and too many products. So there wasn’t any bargaining chip to say ‘we will stay here if you give us X, Y and Z,’ because they already have too much excess capacity elsewhere in North America.”

GM has been busy trying to bounce back from its 2009 bankruptcy, which saw the governments of Canada and Ontario chip in around $10.8 billion to help bail out the automaker. The deal came with covenants guaranteeing that GM would keep a certain amount of production in Canada (it also has plants in Ingersoll and St. Catharines, Ont.). Those covenants have since expired.

The Oshawa plant currently builds the Cadillac XTS, Chevrolet Impala and Silverado and the GMC Sierra. It has, however, had other products pulled out of the plant in its recent history, such as the Chevrolet Camaro, which had been built in Oshawa before the decision was made to produce the next-generation version in Michigan, at a cost of around 1,000 jobs.

Unifor has noted that each direct auto job produces an estimated seven spin-off jobs. As of October, there were more than 2,000 workers at the Oshawa plant, meaning there could be around 14,000 spinoff ones hanging in the balance.

While Unifor has vowed to contest GM’s decision, adamant that the plant’s closure was not a “foregone conclusion,” Ontario Premier Doug Ford was not as optimistic after a call with Travis Hester, president of GM Canada

“I asked him very simply, ‘Is there anything we can do?’ ” Ford said. “And I was shot down not once, numerous times.”

Instead, Ford said his focus is on supporting the GM plant workers, including a request to the federal government to extend employment insurance benefits by five weeks — to a total of 50 weeks — for those impacted affected in the auto sector.

Dennis Desrosiers, with Desrosiers Automotive Consultants, said the demise of the automotive sector in Oshawa has been so gradual that the GM plant closure isn’t likely to deal a death blow to the city.

Production statistics, which Desrosiers compiled Monday, show that in 15 years, the Oshawa plant has dropped from a peak of nearly one million vehicles in 2003 to 148,133 vehicles in 2017.

“Oshawa already has already lost three quarters of its automotive in the last two decades. And it’s growing and surviving,” Desrosiers said. “It has survived quite well without them.

“So there’s no obituary required.”