THE FAR-REACHING EFFECTS OF GM PLANT SHUTDOWN IN ONTARIO
Decision is devastating to local economy now and even more so down the road
According to CBC, some 2,522 automobile-assembly jobs will be lost when General Motors closes its Oshawa assembly plant late next year. That, of course, doesn’t include the knock-on effect of the closure on jobs that supply parts for the Chevrolet Impalas, Cadillac XTSs and Chevy/GMC Silverado/Sierra pickups that Oshawa still assembles. Depending on who you’re listening to, as many as 10,000 to 15,000 auto-parts workers will be affected. And those jobs are not coming back. Oh, the politicians will lament, Justin Trudeau and Doug Ford will cajole, and Unifor president Jerry Dias will threaten — “They are not closing our damn plant without a fight” — but the fact is that it looks like those high-paying, family-supporting, community-invigorating jobs are lost forever. Perhaps the most telling aspect of this entire experience is that the governments/unions/workers were not informed. No concessions were demanded from Unifor, no subsidies requested from Big Government. As the Ontario premier noted, “They told me straight up there’s nothing we can do.” The writing has been on Oshawa’s wall for quite some time. For one thing, the plant is operating far below capacity. As Dennis DesRosiers, of DesRosiers Automotive Consultants, points out, producing only 148,133 cars last year compared to the 940,044 it pumped out in 2003. More telling perhaps is that while the popular Silverado and Sierras are “final assembled” in Oshawa, the plant’s main job is building Chevrolet Impalas and Cadillac XTSs, both large traditional sedans that are rapidly falling out of favour with consumers and are expected to be dumped once the plant is shut down. Indeed, GM also announced the end of the Chevy Volt and Buick LaCrosse, which explains why Detroit/Hamtramck plant is also being closed. Ditto for the Cruze compact sedan, which is why Ohio’s Lordstown is being mothballed as well. It’s not quite all doom, however. For one thing, General Motors has hired some 500 of the planned 700 high-tech programmers and hardware designers for its Markham Technical Centre charged with developing the company’s autonomous cars of the future and is expanding its Oshawa engineering centre, both of which appear to be unthreatened by these latest announcements. More importantly, DesRosiers says Canada’s automotive industry — when you include sales personnel and service technicians as well as assembly-line workers — is healthier than ever, accounting for 806,327 “direct automotive jobs” in Canada as of June this year, compared with 687,425 in 2010. That’s small comfort to those 2,522 workers about to lose their jobs, but it does seem a little early to write off the Canadian auto business in its entirety. What is worrying, however, is the reaction of the American administration, most specifically the president. Donald Trump is already capitalizing on GM’s woes in his own inimitable, threat-that-is-not-a-threat style, vowing to get tough — “You better get back in there soon” — with GM chief executive Mary Barra. Why does this matter? Well, though it passed largely unnoticed here in the Great White Frozen North, Trump had a similar spat with Harley-Davidson about six months ago, when The Motor Company announced it was offshoring some of its production as the result of the president’s ongoing tariff war. Trump’s response was to call for a boycott via his favourite policy tool, Twitter. Since then, Harley’s sales have tumbled dramatically and its direct competitor, Indian, capitalized on its weakness. Just like Harley, GM’s core buyer (especially for its extremely popular pickups and full-size SUVs) is also Trump’s hardcore “base.” As devastating as it will be for those assembly-line workers and Ontario’s economy, GM’s decision to “unallocate” — that’s the company’s legal team trying to soften the blow of getting fired — Oshawa and the four other plants it is closing is likely to have more severe ramifications down the road.