The faint hope that existed at the end of 2018 in regards to General Motors’ Oshawa, Ontario assembly plant no longer exists, except maybe in the minds of the most optimistic of union brass. On Tuesday, the automaker told Unifor, the union representing Detroit Three autoworkers in Canada, that its proposals to save the country’s oldest auto plant weren’t feasible.
GM laid out its reasoning in a letter to Unifor President Jerry Dias. As before, it all came down to cost … and the public’s dislike of cars.
“There were a variety of declining and significant economic and market factors that precipitated the November 26th announcement, including but not limited to the substantial decline in the large car market caused by market shifts from sedans to crossovers and SUVs, significantly increased material costs, the discontinuation of the products currently produced at Oshawa, and excess capacity at GM combined with very low capacity utilization at Oshawa assembly,” read the letter, signed by Gerald Johnson, GM VP of labor relations, and Travis Hester, president of GM Canada.
“These economic factors created an imperative need to consolidate operations, reduce costs and improve cash flow.”
GM says it analyzed Unifor’s proposals “and re-examined those that had been previously discussed internally,” but ultimately couldn’t find a way to allocate new product in a manner that didn’t increase GM’s cash outflow.
“Unfortunately, all Unifor’s proposals would involve substantial incremental costs and a further deterioration of GM’s competitive position,” the company wrote. “Having completed an analysis of Unifor’s proposals, GM has determined that it cannot pursue them because they would not combat the declining economic and market factors that must be addressed.”
The automaker said it planned to work with Unifor to “discuss transition strategies and supports” for the roughly 1,500 workers at the plant, which opened in 1907. In response to the letter, workers walked off the job Tuesday night.
“The workers were so upset they couldn’t work. They couldn’t believe that General Motors had announced that all their hard work was going to be rewarded by cancelling their livelihoods, by telling them the plant is closing,” Unifor plant chairman Greg Moffatt told assembled media. Those workers would return to their jobs Wednesday morning, Moffatt added.
Unifor has long railed against GM’s desire to cut costs by boosting Mexican vehicle output, and did so again yesterday. Dias previously said that new vehicles like the Mexican-built Chevrolet Blazer could easily have been allocated to Oshawa. Instead, the company’s Indiana-to-Ontario truck shuttle program (previous-gen Silverados and Sierras) will dry up before the end of the year, along with production of the Cadillac XTS and Chevrolet Impala.
“We are not calling for a boycott, but we are asking Canadian consumers to continue showing their displeasure with this decision,” said Dias following a meeting with GM brass in Detroit. Dias vows that the fight will continue.
Of course, Oshawa isn’t alone in shouldering the pain born of GM’s restructuring efforts. Joining it on the chopping block are two transmission plants in Michigan and Maryland, GM’s Detroit-Hamtramck Assembly, and Lordstown Assembly in Ohio.
[Sources: Automotive News Canada, Global] [Image: General Motors]
I am still a bit confused. Is it possible that GM will bring another CUV to the table and need a place to build it? Wouldn’t this, or one of the other closed plants be considered?
Seems to me a fair amount of activity has taken place in the last decade with the foreign manufacturers building plants in the U.S that maybe one or some of these shuttered facilities could be sold. I keep thinking about the Packard plant in Detroit that my family and I visited in October (visited = drove around in awe that such a massive facility could sit dormant for so long that trees were growing on the roof) and wonder why it is that if one automotive company shutters a facility no attempt is made to sell it to another.
The Packard facility was built in a time where vehicles were built on several floors—it was outdated by the time it was closed. The cost of retooling that facility was far greater than building a new facility somewhere else.
I’d suspect other facilities were in the same boat—Buick City, Norfolk Assembly, Atlanta Assembly, Janesville…
Norwood (camaro plant) 3 floors, cars were snaking up/down and all around, closed in 87
Oshawa.
High cost plant with a very good work force (what industry experts say). Shame really.
What s bad for these workers is they have fewer plant / less of a chance to transfer to other plants.
Chrysler found when building the initial FWD LH platform cars that the highest “assembly quality” was at one of their oldest factories that also had the most experienced workforce compared to the other plants that were assembling the same product.
We had good quality from our Terrain a d XTS Vsport. Good paint quality too for being black.
This is tough for all who are involved.
I don’t know why I have some secret brotherly love for Canada over Mexico, maybe its because I know so many canadians and that my mother is a canuck… but I hate to see Canada lose jobs to Mexico. I know in theory it shouldn’t matter, and good for Mexico to get more jobs down there, but its sad to see anyone lose their jobs.
Good luck to all of you at Oshawa :(
GM is a shitty, failing company. If they can’t build compelling gasoline engined vehicles, why will their electric vehicles be any better? And what happens if the electric car market does not materialize in a big way? GM Hecho in Mexico. And China. Buy American – buy Honda. Not only Canadians should boycott GM.
The True Believers (Mark Reuss is one of them) are designing some good products. Hopefully Reuss can change things, beginning with the hiring of a CMO (Chief Marketing Officer).
Okay, UNIFOR tried GM said no. Its all over , there is no product allocation. Now is not the time for more rhetoric . Salary guys are either taking the package offered , or looking at transferring to CAMI or St Cathrines.
GM is actually offering retired Supervisors a chance to return on a contact basis. One of my former supervisors jumped at the chance . The job may last a month, maybe 6 months, but the plant will be closed by late fall ..Maybe sooner?
At this point Jerry Dias needs to recognize that no amount of boycotts, demonstrations, or threats will change the course of events.
The membership would be far better served with UNIFOR sitting down with GM, and negotiating the best possible package for the hourly work force.
“The voice of reason is inaudible to irrational people.”
– Mardy Grothe
““The voice of reason is inaudible to irrational people.”
– Mardy Grothe”
Sadly this is so .
GM is in business to MAKE MONEY and no other thing .
As a Union Member I understand the importance of a unionized workforce but there comes a point where reality needs to be checked .
I don’t understand how it is that people don’t want to buy cars anymore but this is the fact, time to flex and bend with the prevailing winds or you’ll go under and soon be forgotten .
-Nate
1.9.2019 unbanned and I will try very hard to be good, THANK YOU ! .
Welcome back Nate
Thank you kind sir, unlike some, I don’t think this is a dead nor worthless forum .
-Nate
Hooray for the UnBan Hammer!
Hip hip hooray!
Hello, Nate. Nice to see you back.
And nothing gets people irrational quicker than threatening their paychecks.
If it was a surprise, then I can understand the reaction, but GM isn’t known for being a stable employer.
Thank you again Gentlemen .
I agree ~ if you want a paycheck, WORK YOUR BEHIND OFF because _no_one_ owes you anything .
I’m a GM Fanboi yes but I’m also keenly aware of the slap dash assembly of the units for DECADES, not just the cheapo cars ~ it doesn’t matter what _you_ think of the product if you’re being paid good $ to assemble it ~ make everything you touch, as good as it can be or shaddap and leave , others who are hungrier are waiting for that job .
Boo on GM for not designing vehicles no one seems to want to buy ~ that’s not the worker’s fault, go to work and work hard .
-Nate
How the heck did Nate get banned?
@RNC :
I was banned for a word I used, an offensive word I have to deal with almost daily .
I tried mis – spelling it and it still got me banned .
Remember : when you’re on someone else’s forum, you have to follow their rules even if you *think* you’re in the right or have to speak out .
I’m on another vintage vehicle forum where I was banned for a short time because I spoke out against blatant racism .
-Nate
Is the right to simply walk off the job written into their contract?
That would be cause for immediate dismissal, no?
Everybody went back to work this morning . The official word didn’t come out until late yesterday ..GM Oshawa management were very much aware of the impending sit down. ..The local bars all done well last night.
Can you answer the question?
I do wonder if it is wise to partially walk out of a plant producing discontinued poor selling product?
Oshawa: We’re not working!
GM: Whatever.
“We are not calling for a boycott, but we are asking Canadian consumers to continue showing their displeasure with this decision”
Jerry, why not boycott the Hecho en Mexico Blazer?
So let’s see.
Impala is currently built in Oshawa and Hamtramack and the XTS is only built in Oshawa… (well and Shanghai for Chinese consumption). The LaCrosse is built at Hamtramack…
It will be interesting to see whose assembly quality stays up as the end approaches. (says the guy who loves big sedans and who will be shopping right around the time production stops.)
Good question. My guess is things slide after Oshawa goes out. Although in part because of Oshawa, XTS might be the first Cadillac in many years which could be safe to buy used.
XTS might be the first Cadillac in many years which could be safe to buy used…
And no NorthStar (thank god.)
Debadge it and put “DEVILLE” script on the doors.
@PrincipalDan ….Oshawa has always built a quality product, and will continue to do so. I personally would have no fear whatsoever of purchasing an Oshawa built vehicle.
You don’t think there’s going to be a “we’re pi$$ed” mentality on the assembly floor? They did just walk off the job in protest.
@ PrincipleDan….To answer your question …no…
For sure the folks were indeed pi$$ed off. In my 36 plus years on the floor I’ve witnessed a lot of “upset” people ..Taking your frustrations out on the product is not accepted by either management or your peer group.
Theres that, and the fact that the individual assembler has little or no impact into final build quality . We worked with the tools, and the material provided to us . GM set the standard and we built to GM’s standard.
@mikey – I’ve said it here before and I still believe it – Oshawa assembles/assembled quality vehicles. The ’90 Chevy pickup I bought new 28 years ago was, by far, the best new vehicle I’ve purchased in the last 45 years bar none. The only niggling issues I had during the 275k miles and 12 years I owned it were GM engineering flubs. Sad to see this plant close.
My guess is “no”. Looked at several `18 Volt’s built at the now closing Hamtramck plant and some of the issues with them were disgusting.
Hood chipped on both sides on all the cars in the same exact place.
Weld slag in the channel around the rear window on 3 cars.
2 vehicles had mold defects where it appears the plastic was hung up and pulled when it was ejected from the machine.
Front fascia chipped in front corners where it meets the fender.
Buying something from what is very likely the end of the line for Oshawa and the end of GM’s large FWD sedans (possibly the end of *any* GM large sedans in general) would be kind of cool.
The only problem is that it requires giving money to GM.
For decades, the cheaper Canadian dollar and the taxpayer funded health system made Canada a very competitive place for building cars. What’s changed?
I feel for all of the workers losing their jobs! Take it from me, been there done that. I went thru 2 plant closings at Dana Corp. the last being in 1980 after having 12 years with them, they made the frames for the Ford trucks the plant in Michigan was closed all of our work went to our “sister plant” in Canada, so went back to school for a year then took a job in cable tv making half what I made at Dana. Decided to sell the house and move to Kentucky which I did and got in with a cable company in Bowling Green until a job opened up for me at the GM Corvette plant in late 84, they put on a second shifton to keep up with demand of the newly designed model only to be laid off after 18 months! Then jobs opened up at the Norwood Ohio plant (camaro)after taking that move we were told after 3 months of moving there that it was being closed down, for good, all of that work went to our “sister plant” in Van Nuys.Oh boy it gets better, went back to Mich. and got a job installing commercial wallcovering and loved it except that only lasted a few years, wallcovering stopped being used as much in motels, then the job of a lifetime came available – Saturn in Spring Hill, Tn, no layoffs and a 100 year company (so we were told) 20 years later laid off except this time I had enough time to retire, which I did in 2011. moral of my story – Don’t Give Up!!!
Wow, just wow. Thanks for sharing.
Interesting story…you were a “GM Gypsy” and more.
Glad you made it to the finish line.
@redgolf….A true GM Gypsy brother. Enjoy your retirement !
Even though I was a former auto assembler as a young man (UAW Local 4077), I still find Dias’ statements to be hyperbole. Oshawa has been on the decline for years and years – this is a surprise to no one.
Sure seems like a lot of otherwise low margin vehicles get built at high labor cost factories.
1) A walk-out/strike while the collective agreement is still in place is a breach of the Ontario Labour Relations Act. If the union does not act to get the workers back, it can be convicted under the Act and made responsible for lost revenue.
2) Oshawa has been in decline for many years. The workforce is a fraction of what it once was.
3) Canada (Ontario) was for many years much less expensive to manufacture in than the Northern USA. As others posted the Canadian dollar and universal healthcare being the key elements. Cheap electricity also helped. Now we sell/transfer electricity to New York State for less than we get charged for it here. And GM shed much of its healthcare costs by transferring legacy costs and creating a mult-tier wage system. More importantly the cost of production in Mexico is a fraction of that in the USA and Canada. Hence the closing of the American plants, as well as Oshawa.
4) Unifor has to make this as difficult as possible for GM a) to persuade them that closing Ingersol and in particular St Catharines would be too costly and time consuming and b) to demonstrate to the members that the union executives are ‘fighting for them’. Unifor knew this was a foregone conclusion but still have to ‘play the long game’.
5) Quality at Oshawa was 2nd to none. This demonstrates that manufacturing a quality product, efficiently is not enough. If that is not enough, then what can auto workers in Canada and the USA do to save their jobs? The answer is truly nothing without political assistance, such as tariffs.
Arthur nailed it!
The only thing I would add is that Oshawa did a good job (and by GM standards, it EXCELLED!) not only with quality, but in terms of hours per vehicle, Oshawa was for years consistently near the top or at the top of GM’s plants, and the industry in general–even Toyota.
I’m surprised Corporate America has not come up with “Long-term internships”–to get people to work for nothing and have the government pay them.
Had Ontario and Canada, as well as the US govt, not bailed out GM, these people would all have been unemployed 9 years ago. The publicly stated reason for the bailouts on both sides of the border was to ‘save jobs’. But I didn’t think they meant jobs in Mexico, China, and most importantly, the Ren Cen!
Does anyone here know how much GM, which has been very profitable these past 5 years, pays in US and Canadian Federal and State/Provincial taxes?
I feel for the workers, who more often than not get the shit end of the stick, but if the public does not buy what they make GM is right to move on, no idea what the cost difference is between Mexico and Canada but I am guessing a big amount so why build the blazer in Canada? Also remember GM closed 2 other plants in the US as well so this is not just a GM hates Canada thing, hopefully GM will give a good package to the workers.
Considering Oshawa was pretty well regarded for quality, I don’t think it’s the fault of the labourers that their product wasn’t being purchased, but they’re the ones suffering the losses. Where’s their golden parachute? The people at the top who are the actual source of the problems won’t suffer the way the workers will.
The only thing that will cause a difference is if people stop buying GM. Local new vehicle sales are reportedly down 35% according to a dealership interview, that’s a decent enough start. When its approaching time for it to actually close, and after it closes, the numbers should really drop.
The Canadian Government should extract every last bailout penny they gave to Guangzhou-Guadalajara-LowestBidderWinsAllContractsNoMatterFromWhereSourcedOrHowPoorlyConstructed Motors (GGLBWACNMFWSOHPCM).
How is it GMs fault that these people make (or made after they threw a tantrum and walked out) cars that the buying public does not want?
And why does every single of my comments need to be approved before it’s posted? Is the truth that caustic to some people???
Your first sentence has to be in ‘sarcastica’, right.
Like the workers get to pick the vehicles that they produce, or their design, engineering or even the parts that go into them.
Auto workers have control over only how well they assemble/screw together the vehicle and some impact on overall efficiency.
And the Oshawa auto workers had outstanding scores/results in both categories that they had some control over.
Everything else was controlled by GM’s management. And they failed spectacularly.
it didn’t say “the workers threw a tantrum and walked out” article said “they were so upset they couldn’t work”! They then “returned Wed. morning”,if you’ve never had the big L word (Layoff)dropped on you, then you can never understand the hopeless feeling! Especially if you had a number of years under your belt!
Yes, it is mostly “GM’s fault”.
If the cars had developed a reputation for being shoddily assembled, or rust buckets, THAT’s on the assembly plant.
The assembly plant workers and their salaried managers build what the corporation gives them.
In this case, the cars they built were swimming against the tide of rising CUV popularity. I grant you that.
Even so. that can only explain some of the drop in Impala production. The fact is, this Impala costs A LOT MORE than the old one. Yes, it is a better car. But is it good enough to command sticker prices of $30k to $40k? Probably not…it’s a CHEVY, not an entry Audi or Lexus. So sales dropped.
Not only did GM overcharge for the car (they did the same with the Buick Lacrosse and Cadillac ATS), but they put it in TWO PLANTS. TWO sets of tooling. The old Impala was built exclusively in Oshawa.
So, with the benefit of hindsight (since the people making these decisions lacked the ‘real-world’ knowledge of most working people, hourly OR salary), these were strategic mistakes. HAD the car been better priced and built in one plant (and in this case, Oshawa was the logical plant), it would have both made more money for corporate, and it’s closure might have been delayed or even not happened (if the company developed a replacement).
With Ford having announced they were canning the Taurus and Fusion, those buyers are probably most likely to turn to GM (for Impala/Malibu), or Toyota (Avalon/Camry).
Now Toyota will get that business, reinforcing their position.
Even expensive restaurants feature chicken and pasta. Filet mignon is more profitable–but not everyone eats filet.
TomL,
You nailed it. When the last generation of the Impala came out, I considered it as a replacement for one or my vehicles until I saw the sticker. It seemed like a fine sedan, but GM got way ahead of itself in pricing and lost a potential sale.
“They couldn’t believe that General Motors had announced that all their hard work was going to be rewarded by cancelling their livelihoods…”
This is flawed thinking. Their hard work was rewarded with a paycheck, benefits, and a pension, presumably. There is no guarantee of a job for perpetuity.
What you believe is ‘flawed’ thinking is exactly how the Canadian legal system views the employment relationship. When a worker is hired, unless otherwise specified, it is for an indefinite period and as long as they perform their jobs in a diligent manner, the employer has a legal obligation to provide them with work and to treat them fairly. If the employer does not comply with either, then the employer is in ‘breach of contract’.
Advanced robotics can’t come soon enough!
GM upper management for years has only been concerned with increasing their compensation . The GM employees,
stockholders, customers, and taxpayers of both the US and Canada wound up footing the bill. This is exactly why tariffs are needed when such extreme production costs exist between countries.
When you can’t find ANYTHING you can profitably build in apaid-for billion dollar plant with an experienced workforce, something is wrong.
Looking at this from a higher level its very unfair. Some are saying that GM don’t owe the workers a living – that’s true they don’t, but they don’t owe the Mexicans that are getting more work a living either… Best way to get GM’s attn would be tariff GM vehicles sold in Canada that are made in Mexico. If GM had countered with a very lowball offer, it would been well received versus just hearing “the plant is closing”. I believe that many Canadians will begin to boycott GM vehicles based on this decision.. Let’s see how many GM vehicles Canadians buy this year versus 2018..so will end up as a “lose-lose”. Time will tell…