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However GM still intends to cease vehicle production in Oshawa in December, marking the end of an era that will eliminate 2,300 unionized jobs
General Motors of Canada Co. threw a lifeline to its century-old Oshawa, Ont. facility with a $170-million investment to save 300 jobs and maintain operations for at least a decade, preserving a smaller footprint in the industry town in a move that analysts say addresses both economic realities and technological advancements in the auto sector.
The automaker announced Wednesday it will transform the Oshawa assembly plant into a stamping facility and maker of spare parts for existing vehicles. It will also turn 55 acres of the property into a test track for autonomous vehicles.
“This new business will retain 300 Oshawa jobs with the intent to grow and generate significant additional jobs within the coming years as the business attracts new customers,” GM Canada president Travis Hester said at a news conference in Toronto Wednesday alongside Unifor president Jerry Dias.
But GM still intends to cease vehicle production in Oshawa in December, marking the end of an era that will eliminate 2,300 unionized jobs. The shutdown is part of a global restructuring plan to close eight plants, cut 6,700 jobs and save the company US$6 billion annually to spend instead on future technologies such as self-driving and electric vehicles.
The fact that GM plans to spend some of this future-focused money on an autonomous test track in Oshawa is a positive signal for plant’s longevity. DesRosiers Automotive Consultants’ Dennis DesRosiers called the test track “the jewel” of GM’s plans.
“The future of the auto sector in Canada is very much the six inches between our ears,” DesRosiers said in an interview. “It gives job security to the research and development workers and the innovation workers in Oshawa … it’s exactly where Canada needs to be.”
It’s too expensive to produce in Canada compared to low-cost jurisdictions, DesRosiers said. Instead of wasting time trying, he said efforts should be focused on higher-skilled, value-added areas of production such as components jobs, which tend to have higher job security.
“The chances of assembly jobs being brought back to Canada is near zero, but the possibility of taking this core 300 jobs in the body stamping plant and building on it is very real,” he said.
Still, it was a bittersweet day for Dias, whose union represents about 2,600 of the plant’s nearly 3,000 employees, including his niece and nephew. The union spent six months fighting to convince GM to build another vehicle in Oshawa with a combative public campaign that included an expensive advertisement during the Super Bowl and a call to boycott GM vehicles produced in Mexico.
“Do I believe this is perfect, the answer is no,” Dias said. But based on industry realities, he said had to be honest with himself and accept that a long-term commitment to operations, even on a smaller scale, was better than a hard closure.
“The fact that we’re going to maintain the integrity of manufacturing for the long term is critically important,” he said.
GM has previously re-invested in facilities where it stopped allocating production. Dias cited as examples the Spring Hill plant in Tennessee and the Fremont plant in California. Both saw thousands of jobs return after being idled, with Spring Hill now employing 4,000 people making parts and Fremont, now a Tesla Motors’ factory, employing 10,000 workers.
GM doesn’t expect job growth in that vicinity for Oshawa, Hester said. But GM does see an opportunity beyond 300 jobs, including higher-tech jobs related to the new testing track, its first autonomous track in Canada.
Automakers are required to make aftermarket parts such as doors, hoods and trunks for older models for at least 10 years. That business naturally grows over time, and GM has already lined up 50 components for production in Oshawa, Hester said.
GM has also been in talks with autoparts makers Martinrea International Inc. and Magna International, he added.
Previously, Oshawa built sedans such as the Chevrolet Impala. For the employees who will be out of work in December, GM is offering enhanced packages to 1,300 workers eligible for retirement, relocations to other Ontario locations or financial support for skills training.
GM will maintain its engineering and research facilities located about 300 metres from the plant. Flavio Volpe, president of the Automotive Parts Manufacturers Association, hopes Oshawa will have a role in GM’s new focus on electric and self-driving vehicles.
“Tying Oshawa into those efforts may be what saves it,” Volpe said.
Regardless, it’s good news that the plant will remain in operation, keeping the door open for future manufacturing opportunities, he said.
“When you see a plant close, you usually see the company mothball the physical asset and end operation. This keeps us in the game.”
With files from Naomi Powell
Copyright Postmedia Network Inc., 2019