GM may pay for decision to close truck plant
Automaker could be forced to repay some of the $435 million in incentives
WINDSOR, Ont. — When its Oshawa, Ont., truck plant closes next year, throwing 2,600 workers out of their jobs, General Motors may be forced to repay some of the $435 million in incentives it received from the senior levels of government only three years ago.
Both GM Canada president Arturo Elias and Ontario Premier Dalton McGuinty acknowledged the issue in separate discussions yesterday.
Elias said that “potentially there may be some repayments.”
And McGuinty said that “our sense at this point is they will be (in breach of their agreement) and if so, there are specific provisions under the contract that we will seek to enforce.”
According to the loan agreement, which provided GM with $435 million for its $2.5-billion so-called Beacon project to upgrade its Ontario plants and boost research, the company agreed to keep an average of 16,000 employees across the province over nine years.
GM spokesman Stew Lowe said the current workforce is around 15,000 but “that’s expected to increase by about 700 when we bring people back for the Camaro launch early next year.
“We have also made a commitment to add two new vehicles to the flex line in Oshawa — one during the life of the current collective agreement and another after — and we do not yet know what impact that will ultimately have on staffing levels.
“There’s a lot happening here — some negative and some positive — and I’m not familiar with the language in the Beacon project and how those workforce levels are calculated,” said Lowe.
Earlier yesterday, Canadian Auto Workers president Buzz Hargrove said GM’s closure announcement was a “betrayal of the collective bargaining process” and he vowed to fight the decision.
Hargrove said the union hasn’t ruled out anything in the way of a protest and added “we’re keeping our options open.
“We have power and we’re not going to be afraid to use it,” he said.
Reading from contract language agreed to just two weeks ago, Hargrove said the company agreed to maintain production in Oshawa on a rotating-shift basis for the life of the three-year agreement, based on market demand.
“Clearly, nobody in their right mind would suggest there’s been such a huge market change in the past two weeks to justify such a decision,” said Hargrove. “They clearly knew during bargaining that this was a possibility because you don’t make decisions to close four plants in a two-week time frame.
“Either that or it’s a panic decision that basically says, ‘To hell with the collective agreement, to hell with the workers in Oshawa, and to hell with the relationship we’ve built over the years.’ “
While GM has put the number of workers displaced when the plant closes at around 900, Hargrove said it represents 2,600 workers because they’re all on a series of two-week rotating shifts designed to keep as many workers employed as possible while still retaining seniority and recall rights.
“General Motors has an obligation to our union and its members and to Canadians in general to retain at least a share of its truck production in this country,” said Hargrove.
“We recognize that the overall market for GM’s larger vehicles, including pickups, is enduring a painful adjustment,” Hargrove added. “But that does not give this company the right to violate its recent collective agreement and turn its back on Canada entirely.”
Hargrove called on the federal government to step in to help save the plant and its workers.
“The principles of the old auto pact should guide the government in this situation and prevent a company from selling trucks into this market when it no longer makes them,” said Hargrove.
“GM is not getting out of the business of selling trucks in Canada, but they do seem to be getting out of the business of making them here.
“Oshawa is their best plant, it’s their most productive, their most efficient and this company continues to make money in this country,” said Hargrove. “And our members are some pissed off today.”
Hargrove was reacting to an announcement Monday afternoon by GM chairman Rick Wagoner that the giant automaker was planning to close four plants next year, including the Oshawa truck plant.
Blaming the high cost of gasoline and consumers’ resultant rejection of GM’s bigger vehicles, Wagoner said other plants slated for closure include SUV plants in Wisconsin and Ohio and another plant in Toluca, Mexico.
Also slated for closure next year is Windsor, Ont.’s GM transmission plant, which will result in the loss of 1,400 jobs, including 1,200 unionized workers.