THE POLITICS BEHIND BUILDING PICKUPS IN OSHAWA
A gamble that Trump was on his way out likely was a factor, writes David Booth.
It was perhaps the most astonishing Canadian automotive announcement of the past 10 years: General Motors' Oshawa assembly plant, shuttered since last December, is being reopened. And not just some kind of token keep-Unifor-out-ofour-hair-for-the-next-four-years symbolic reshuffling of some soon-to-be-discontinued sedan that nobody wants.
No siree, Bob! Perilously close to death — it was scheduled to become a parts-stamping facility and autonomous vehicle testing ground — Oshawa has been granted the nearest thing the North American auto industry has to a Fountain of Youth: it will produce pickups. Indeed, it will hold the exalted status of being the only GM plant in the world to produce both light- and heavy-duty trucks. Forget astonishing, this is the paradigm shift that may save Oshawa's 111-year history of auto manufacturing.
Credit where credit is due, outgoing Unifor president Jerry Dias really pulled one out of thin air. Oh, sure, Ford's Oakville plant deal and the pact with
FCA to keep Windsor alive were coups, but those contracts merely saved jobs that already existed. Oshawa's reopening actually brought jobs back to Canada. There were barely 300 Unifor members prowling the cavernous 10-million-square-foot facility, and despite the fact the closure was officially dubbed a “pause” back in May 2019, few had any expectations those jobs would ever return. Instead, anywhere between 1,400 and 1,700 jobs could be revived by the end of 2022, God and cheap gas willing.
More than a few pundits have credited Dias' recent success — the contracts he signed with the Detroit Three represent investments of $4.7-billion in Canadian automotive production — to his close relationship with Prime Minister Justin Trudeau. And while it's true our fearful leader has insinuated himself fairly dramatically in recent automotive dealings, I'd posit it was GM's relationship with another politician that was key to getting the deal signed.
That would be the president of the United States, and I don't think it's an exaggeration to say GM chief executive Mary Barra probably made a calculated bet that Donald Trump wasn't going to get a second term before approving the shift in pickup production to Oshawa. In fact, I'll go even farther: I'm not sure this deal would have been signed if Barra had thought Trump would be around to haunt her for the next four years.
The calculus is simple. Trump doesn't care if Ford produces “globalist” electric vehicles in Oakville or FCA makes electrified minivans in Windsor. His loyal supporters don't buy 'em, don't care about 'em and sure as shootin' aren't calling him out on Fox News for letting production of “elitist” EVs head north.
But building trucks anywhere other than in the good old US of A? Well, that would be a freaking tweetfest. Earlier this year, Trump got on her case, claiming GM was demanding “top dollar” for then-much-needed ventilators, singling out Barra specifically with an “always a mess with Mary B” tweet. Before that, the closing of the Lordstown, Ohio, plant raised his ire.
Look what he did to Harley-Davidson. In a 2018 response to the EU raising taxes on motorcycles built in the U.S. by 25 per cent, Milwaukee announced it was shifting some of its production to Thailand. Never mind that the EU's move was a response to Trump's own decision to impose duties on steel and aluminum imported from Europe, or that it would cost Harley US$2,200 more to export a motorcycle from the U.S. because of these retaliatory restrictions.
Trump went on the warpath, starting with messages bullying HD's management, and eventually calling on his supporters to boycott Harley-Davidson.
So, was Barra prescient in her reading of the political tea leaves? Did GM Canada's recent rebirth really hinge on Trump's election collapse? I don't know. But would Barra have risked the wrath of Trump if the polls had given him a Biden-like lead going into the election? Would anyone willingly walk into that kind of abuse?
Those thinking it wasn't a big part of GM's calculations before the deal was signed are fooling themselves — Jerry Dias' genius notwithstanding, of course.