No. It’s best placed to build cars of future
There is nothing inevitable about the closure of the GM assembly plant in Oshawa. The industry is in transition, not decline, and the choices that we make now will determine Canada’s place in an industry that will continue to create great wealth in North America. There’s nothing inevitable in history. Choices, whether made by corporations or governments, matter.
General Motors today is a healthy and profitable corporation, a solid No. 10 on Forbes Top 500 list — a far cry from the company that nearly went bankrupt in 2009. It is now a global leader in research and development on self-driving vehicles, electric vehicles and alternative fuel cells.
Over the past several years, Canada has also developed hubs of research expertise in key areas that are necessary to transition to a modern auto manufacturing industry, such as artificial intelligence (AI), fuel cells and electric-vehicle technology.
A research hub was even developed in Oshawa in partnership with GM: the Automotive Centre of Excellence (ACE) at the University of Ontario Institute of Technology (UOIT).
Given Canada and Oshawa’s combination of cutting-edge research capacity and skilled autoworkers, it’s difficult to believe GM could find a better location to invest in its stated objective of building high-quality autonomous and energy efficient vehicles.
When the governments of Ontario and Canada invested $10.6 billion in GM Canada in 2009, the company made some promises, including a commitment to invest $1 billion between 2009 and 2016 on “green research, development and innovation focusing on energy diversification, fuel economy improvements and vehicle electrification, through its Oshawa-based Engineering Centre.”
Unfortunately, both Ontario and Canada sold all its GM stock by 2015, a year before the deadline. This reduced their leverage to extend GM’s commitments to undertake the challenging work of transitioning the Oshawa plant and workforce to greener vehicle production. However, GM should be reminded that for more than two decades prior to the signing of a new trade deal with the U.S., and subsequently Mexico, the company obtained hundreds of millions of dollars in benefits from the1965 Canada-U.S. Automotive Products Agreement.
Along with Chrysler and Ford, GM, in return for investments in Canada, was entirely exempt from paying duties or tariffs on cars, trucks and parts imported into Canada from the U.S. Japanese and European manufacturers had no such exemptions. This Canadian government provision gained GM an immense price benefit over non-North American competition.
Both levels of government have known for years about the need for GM to restructure its operations in Canada. But the inevitability of this restructuring should not be confused with the inevitable demise of auto manufacturing in Canada. Quite the contrary. Gov- ernment investment in 2009 helped ensure the longevity of GM’s plants in Ingersoll and St. Catharines, and it can and should be done for Oshawa now.
What’s at stake is much more than the 2,500 workers at the GM assembly plant in Oshawa. Thousands of workers will be affected throughout the supply chain, not to mention the blow to local businesses that rely on GM workers spending their paycheques in their stores. Even beyond that, what’s at stake is Canada’s place in the high-tech manufacturing sector of the future.
Just this August, Prime Minister Justin Trudeau made a stop at ACE in Oshawa to announce an additional $10 million in funding for wind tunnel research through UOIT. At the announcement, Trudeau said, “With a skilled workforce, world-renowned companies, and leading-edge research, Canada’s auto sector is well positioned to create the vehicles of the future — ones that will be both safer and more efficient.”
What workers and Canadians need now is for the provincial and federal governments to forcefully remind a highly profitable GM that it is now up to them to deliver. It’s time for payback in Oshawa. Oshawa MPP Jennifer French expressed what so many workers in Ontario were feeling when she said, “GM did not build Oshawa. Oshawa built GM.”
Now is the time for GM to ensure that Oshawa can be part of building a greener high-tech auto industry for years to come.
Ed Broadbent is the chair of the Broadbent Institute. He was the MP for his hometown of Oshawa between 1968 and 1989.