GM PLANT CLOSURE – Union vows to fight for 2,500 lost jobs in Oshawa; feds discuss support
The union representing workers at the General Motors assembly plant in Oshawa, Ont., is promising “one hell of a fight” after the automaker announced it would close the location along with four other facilities in the U.S. as part of a global reorganization.
Hours after GM’s announcement, Jerry Dias, national president of Unifor, stood before a union hall overflowing with anxious GM workers and said the union will fight against the planned move “tooth and nail.”
“They are not closing our damn plant without one hell of a fight,” Dias told the audience, some still drenched from holding an impromptu picket line in the driving rain.
He said the plant has won “every award” and was the best by “every matrix.”
“We are sick and tired of being pushed around. And we’re not going to be pushed around... we deserve respect,” he said.
GM announced the closures Monday as part of a sweeping strategy to transform its product line and manufacturing process that will see the company focus on electric and autonomous vehicle programs, a plan that it said will save the company US$6 billion by the year 2020.
“This industry is changing very rapidly, when you look at all of the transformative technologies, be it propulsion, autonomous driving... These are things we’re doing to strengthen the core business,” GM chief executive and chairwoman Mary Barra told reporters Monday. “We think it’s appropriate to do it at a time, and get in front of it, while the company is strong and while the economy is strong.”
GM also said it will reduce salaried and salaried contract staff by 15 per cent, which includes 25 per cent fewer executives. The US$6 billion in savings includes cost reductions of US$4.5 billion and lower capital expenditure annually of almost US$1.5 billion.
GM’s shares in New York jumped as high as 7.8 per cent to US$38.75, their highest level since July. The automaker’s shares closed at US$37.65, up 4.79 per cent.
The impending shutdown is “scary,” said Matt Smith, who has worked at the Oshawa plant for 12 years. He said his wife also works at the GM facility and the pair have an 11-month-old at home.
“I don’t know how I’m going to feed my family,” he said outside of the plant’s south gate, where workers instituted a blockade for trucks from the entrance.
“It’s hard, it’s horrible‚Ķ We have always been the best plant in North America. It’s a kick in the nuts.”
Unifor, the union representing more than 2,500 workers at the plant, said it has been told that there is no product allocated to the Oshawa plant past December 2019.
Production began at the Oshawa plant on Nov. 7, 1953, and in the 1980s the plant employed roughly 23,000 people.
GM is also closing the DetroitHamtramck Assembly plant in Detroit and the Lordstown Assembly in Warren, Ohio in 2019. GM propulsion plants in White Marsh, Md., and Warren, Mich., are also due to close as well.
The automaker did not say the plants would close, but used the term “unallocated,” which means no future products would be allocated to these facilities next year.
On top of the previously announced closure of the assembly plant in Gunsan, Korea, GM will also cease the operations of two additional plants outside North America by the end of next year.
The closures come as North American automakers feel pressure from U.S. tariffs on imported steel and aluminum. Last month, GM rival Ford Motor. Co. reported a US$991 million profit during its third quarter, but said tariffs cost the company about US$1 billion. Of that amount, US$600 million was due largely to U.S. tariffs on imported steel and US$200 million from retaliatory tariffs imposed by China on American vehicles, Ford said.
The restructuring announcement also comes after Canada and the U.S. reached the United States-MexicoCanada Agreement to replace the North American Free Trade Agreement, after months of strained negotiations.
Under the new trade deal, 40 per cent of the content of automobiles must be produced by workers earning at least US$16 per hour to qualify for duty-free movement across the continent. The agreement also stipulates that 75 per cent of the automobile’s contents must be made in North America in order to be tariff-free.
Last month, as GM reported a US$2.5-billion third-quarter profit, the automaker also said it was aiming to cut costs by offering buyouts to roughly 18,000 white-collar workers with 12 or more years of service. That represented more than one third of the company’s 50,000 salaried workers across North America. Workers had until Nov. 19 to decide, and they would have to exit by the end of the year.
And in July, GM executives said pressure from commodity prices and foreign exchange rates had been more significant than expected and the automaker expected a US$1-billion additional headwind, with the biggest exposure being steel.
Meanwhile, GM’s Barra said Monday the company will be investing in autonomous and electric vehicle technology. Vehicles have become more “software-oriented” and GM will be looking to hire more employees with the “right skill set” going forward, she said.
“You will see us have new employees joining the company as others leave the company,” Barra said.
The changes announced Monday will not impact GM’s new trucks and SUVs, which are Barra said are “doing very well.”
The Oshawa plant, however, has been producing an older model, she said.
“Oshawa is building the previous generation trucks that are very helpful in the crossover period... As we’re transitioning to the new truck architecture,” she said.
The timing of the decision was surprising, but not the decision itself, said Dennis DesRosiers, president of DesRosiers Automotive Consultants. He pointed to the steep production decline over the past 15 years from nearly a million units to roughly 148,000 units in 2017.
Lawmakers focus on GM staff, not saving plant
Provincial and federal leaders alike conceded the futility Monday of trying to persuade General Motors to keep its Oshawa, Ont., automotive plant running beyond 2019, and instead focused on ways to ease the pain of more than 2,500 workers who stand to lose their jobs.
Ontario Premier Doug Ford insisted Monday there was nothing his government could do to talk GM into abandoning its plan to shutter the factory at the end of next year. Ford and lawmakers in Ottawa vowed to work together to help affected workers, their families and the city — which will lose its biggest employer.
“The first thing I said was, ‘What can we do?’,” Ford said Monday, recalling his phone call Sunday with Travis Hester, the head of GM Canada. “He said, ‘The ship has already left the dock.’ “
The closure of GM’s Oshawa operation, just east of Toronto, would deliver a major economic blow to the region and will be felt at the Ontario and national levels. In addition to the Oshawa plant, the automaker announced Monday it was planning to close four other plants in the United States and two overseas by the end of 2019 as part of a global restructuring that will see the company cut costs and focus more on autonomous and electric vehicles.
Prime Minister Justin Trudeau said he told GM’s global CEO Mary Barra that he was deeply disappointed about the closure and insisted his government would do everything possible to help laid-off auto employees and their families.
“Obviously, our hearts go out to the workers in the region affected,” Trudeau said during question period in the House of Commons, before noting his government has invested more than $5.6 billion to help the auto industry.
Over the years, billions and billions of public dollars have provided help to the sector, which federal Industry Minister Navdeep Bains says supports 500,000 direct and indirect jobs across the country.
In 2009, during the financial crisis, the federal and Ontario governments spent a combined $13.7 billion of taxpayer money to rescue GM Canada and fellow automaker Chrysler Canada from potential bankruptcy.
Bains was asked Monday by reporters whether he thought the 2009 bailout was a mistake now that one of the companies is closing a major operation. He said the 2009 decision, made by the previous Conservative government, was made because the situation was “very dire.”
Federal programs remain in place to support the auto sector. Bains pointed out the federal government’s announcement last week that it would add another $800 million over five years to its strategic innovation fund, which has provided public money to companies such as Toyota.
In its search for ways to help affected auto workers, the federal government declined to get into specifics — but insisted all options are under consideration.
“We’re very disappointed and very surprised by GM’s announcement that we learned about only yesterday,” said Social Development Minister Jean-Yves Duclos, who joined Bains at a news conference in Ottawa. “Obviously, it touches, (it) affects thousands of families in a cruel manner.”
Duclos, striking a slightly more optimistic tone, insisted Ottawa wouldn’t give up on efforts to persuade GM to stay in Oshawa because too much is at stake.
Ontario called on the federal government Monday to extend employment-insurance eligibility by five weeks to a maximum of 50 weeks for workers affected by the closing. Ford said the province will immediately bolster employment help and retraining measures.
Politicians from both the federal and Ontario governments, who have frequently clashed in public, made efforts Monday to show that when it comes to the GM matter they have, so far, set aside their differences.
“This is not a political issue, this is not about pointing fingers,” Bains said. “This is about standing up for the automotive sector, this is about standing up for the auto workers.”
Ford said he and his federal counterparts would work hand in hand.
But opposition politicians applied pressure on both governments.
At the federal level, Conservative Leader Andrew Scheer demanded Parliament hold an emergency debate on the matter Monday. Scheer said the governing Liberals must immediately explain how they will help workers and protect other manufacturing jobs in Ontario.
“What we’d like to know from this government is, what is on the table? What is possible?” Scheer said in Toronto. “We do know that some of the reasons being cited, being talked about, are the rising costs of energy.”