GM has confirmed it will cut 1,000 jobs at its Oshawa, Ont., assembly plant, even as it announces $5.4 billion US in investment in its American operations.
On Thursday, GM confirmed the end of production for the Chevrolet Camaro at the Oshawa Assembly plant will be Nov. 20 of this year. The plant is still waiting for the company to announce a model to be made after 2016, but GM claims it does not yet have a model ready to go into the plant.
By December of this year, Oshawa will have 2,600 employees, building five vehicles: the Chevrolet Impala, Buick Regal, Cadillac XTS, the Impala Limited, and the Chevrolet Equinox.
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The company said it is working with autoworkers union Unifor to offer retirement incentives to workers to minimize the number of layoffs. More than 2,000 GM workers in Oshawa are eligible for retirement packages.
Even as the announcement of layoffs was made in Canada, GM was pledging $5.4 billion US in investment in its U.S. plants over three years.
Speaking in Pontiac, Michigan, GM North America president Alan Batey outlined specific plans totalling $783.5 million for GM's three Michigan plants.
- $124 million for the Pontiac Metal Center, where major body panel dies will be pre-tested.
- $520 million for tooling and equipment for new vehicle programs at the Lansing Delta Township assembly plant.
- $139.5 million for a new body shop and stamping facility upgrades for pre-production vehicles in Warren.
All of the investments are geared toward improving the quality of GM products, according to GM vice-president Cathy Clegg.
The automaker said it would announce another $4.6 billion in investments over the coming months.
While GM announced in December 2012 it would move production of the Camaro to Michigan, workers had hoped for new investment in Ontario to offset the number of job losses. But GM said it would wait to announce a new model until after its 2016 labour talks with Unifor — a clear indication it is seeking favourable labour conditions in Canada.
Questions about plant's viability
University of Windsor auto analyst Tony Faria says the 1,000 layoffs in Canada could be "just the starting point once the whole thing shakes out."
Parts makers and other industrial jobs linked to the Camaro could well move to Michigan, too.
And GM has more closures on the horizon. In early 2016, GM will be shutting down its consolidated line in Ontario, leaving only the flex line.
From making almost 900,000 cars a year in 2000, the Ontario facility's production had shrunk to 277,000 a year by 2014, an ongoing loss that saw the closing of its truck plant and the move of some Impala and Equinox production to U.S. plants.
"Right now the big theory is that we might see a shutdown of assembly operations in Oshawa. It's hoped that we will hear something of a new vehicle being announced in Oshawa," Faria said.
"At some point in time, the level of assembly gets to the point where it may not be financially feasible to operate that facility," he continued.
Unifor national president Jerry Dias questioned the federal government's decision to sell its GM shares, saying Canada lost leverage with the company.
"The selling of the shares, both by the province and the feds, certainly took away bargaining power," Dias said.
"Shareholders have rights, shareholders have power, and they just gave it away, which to me was completely foolish. Before they sold any of their shares, they should have solidified General Motors' footprint in Canada. But they were all about balancing the budget."
He urged Ottawa and the provinces to develop a strategy so Canada could win the kind of investment announced in Michigan today.
"We have been pushing for an auto strategy in this country for years. But the federal government just gave Volkswagen a half million dollars so it can invest in Mexico," he said, referring to the EDC loan give to VW last week.
He said autoworkers in Oshawa are "frustrated" by the development.
"There was no reason for the GM to move the Camaro out of there. We made changes to our agreement in 2009, concessions so we could get the work," Dias said.
Finance Minister Joe Oliver and Ontario Economic Development Minister Brad Duguid both expressed "disappointment" over the GM decision.
Oliver disagreed that the GM shares could have been a bargaining chip in securing jobs for Canadians.
"We'd always said this would be a temporary investment. It isn't appropriate for the government of Canada to own private sector companiess over the long term and we wanted to reduce the exposure of taxpayers," he said outside the House of Commons on Thursday.
In the past few months, GM has made two investment announcements in Ontario — $560 million at its Cami plant in Ingersoll, Ont., to build the Chevy Equinox and an expansion – without a dollar figure attached – of its research centre in Oshawa.