GM left out of province’s innovation loop
What government efforts were made to get ahead of the curve?
“Congrats on getting in front of the curve here.”
That analyst’s comment made to General Motors CEO Mary Barra on Monday fairly sums up the Street response to the announced closure of five GM plants, including the long-lived facility in Oshawa, as part of the global automaker’s “transformation for the future.” An estimated $6 billion (U.S.) in cost savings, which includes the slashing of 25 per cent of executive personnel, is just the size of number sell-siders like to hear as they watch, warily, for the next economic downturn.
Predictably, the 1940s-era fulminations of Unifor president Jerry Dias — fight tooth and nail, hell of a fight, etc. — were delivered with gusto. Political leaders emerged sad and mad. Workers wept. Don’t get me wrong. Barring a last-minute miracle, the end of GM Oshawa is a tragedy. The second tragedy, really, after the takeover of Sam McLaughlin’s McLaughlin Motor Co. by General Motors in 1918. For GM
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workers in Oshawa, this was supposed to be a celebratory centenary year. “Here’s to the next 100 years at GM Canada,” was a recent corporate tweet.
But this isn’t the beginning of the end. This is the end of the end.
Perhaps I put too much stock in those auto geeks who spend their days examining the supply chain and sales volumes and consumer sentiment.
And perhaps I put too much stock in the trail of bread crumbs left by the company itself.
But let’s go back a year, when GM Canada announced an increase in down weeks on the Impala and Cadillac XTS production, while noting the shrinking of the car market against the growth of SUVs. Or the report from the online market research outfit JustAuto, last December, on how the XTS “should remain in production until eventually being phased out in 2019.” Automotive News emphasized 11 months ago that the announced Oshawa finishing assembly of the GMC Sierra and Chevrolet Silverado was for the outgoing 2018 models only. Adopting the in-house GM lingo, the legacy truck platform (K2 in Oshawa) would assemble the 2018 models while the new generation (T1) pickups would go to Fort Wayne, Ind.
I get that the new technology, with what the company says are entirely new state-of-theart engines, combined with new composite materials making lighter and more fuel efficient trucks, takes aim at Ford and Chrysler.
GM Canada made it clear, in fact, that the company’s halfbillion-dollar investment in the Oshawa truck works, transforming a vastly underutilized car line to a pickup line, was meant only to “transition” the company to next generation assembly elsewhere.
“This strategy will help us meet customer demand as we transition our production and introduce our exciting new models into the market starting later in 2018,” a corporate spokesperson told Automotive News.
The lack of exciting new models for Oshawa read like a company playing out the string. Jerry Dias was asked then about what that meant for the plant’s future.
“Right now, the commitment is to the existing portfolio,” he said.
Right now, that doesn’t do Oshawa much good.
“It’s always been known to be a temporary program that would end at the end of 2019,” says David Paterson, vicepresident corporate and environmental affairs for GM Canada, speaking specifically to pickups.
The Unifor contract that included the assembly of those transition trucks was for four years, and was signed in September 2016.
So there were really only two surprises in the announce- ment from the carmaker’s global headquarters.
The first was that it arrived six months earlier than anticipated.
The second came in the announcement that the Impala would cease production.
When asked in that analysts’ call on Monday which cars specifically were on the block, Barra said the Chevrolet Cruze would cease production at Lordstown in Warren, Ohio — the assembly plant will close — and that “there will be a period of time the Impala will still be available.”
Impala production will cease at the end of 2019 at both the Oshawa and Detroit-Hamtramck plants. The Detroit assembly plant will also close.
As CEO Barra wins plaudits for “getting in front of the curve” the obvious question arises: what efforts were made at Queen’s Park and Ottawa to get ahead of the curve too?
The Oshawa closure is distinct from other dire stories of American companies bailing on Canada. I’m thinking here of Electro-Motive in London or Kraft Heinz in Leamington or Hershey in Smiths Falls.
GM remains invested here, in St. Catharines and Ingersoll and through technology centres in Oshawa and Markham. Just last summer, Toronto city council approved the Toronto GM Mobility Campus, to be build at Lake Shore Blvd. E. and Eastern Ave., with its promised R&D and vehicle sales, “and a public experience showcasing innovations in mobility, including electric and autonomous vehicles, e-bikes and car sharing.” An automotive innovation hub, in other words.
The Oshawa plant, clearly, was left out of the innovation loop. How that was allowed to happen is a question for economic development minister Navdeep “Super Clusters” Bains, and Prime Minister Justin Trudeau and Ontario Premier Doug Ford. Oh, and Jerry Dias too.