GM plant closures
- June 4, 2008 12:08 PM |
- By Your Voice
General Motors' decision to close four manufacturing plants, including GM's pickup truck plant in Oshawa which will leave 2,600 employees out of work, has come under fire by workers and union leaders. Read the full story here.
GM CEO Rick Wagoner said Tuesday that higher gasoline prices are rapidly changing the auto industry sales mix, as consumers shift away from large trucks and SUVs. Wagoner claims shifting consumer demand has ultimately led to the plant closures.
David Paterson is Vice President of Corporate and Environmental Affairs, and a member of the Board of Directors for General Motors of Canada Limited. He is responsible for GMCL's government, media and community relations, employee communications and environmental performance. According to him, "it doesn't make sense to have a plant producing vehicles that nobody is going to be buying."
David Paterson
David Paterson took your questions on GM's decision to close Oshawa's plant and the reality of shifting consumer demands.
Read his answers below.
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Comments (6)
Will General Motors pay back to Canadian taxpayers all monies it has received from government in the form of incentives, tax exemptions, etc. for the past 10 years?
David Paterson: While GM received no financial support for either our Oshawa Truck or Windsor Transmission facilities under the Beacon agreements, we acknowledge there may be loan prepayments required when we sort out the employment impacts of recent announcements. We would of course make any necessary prepayments on our loans. We also plan to continue to work with government to transform our Canadian business and bring in new products and investments.
I do want to say that we could have no better partners than the Ontario and federal governments and thank goodness those partnerships enabled us to do the $2.5 billion Beacon investment in areas like flexible manufacturing and related paint plant environmental investments as they now give us tools in Canada to look at new car mandates and respond to this unprecedented change in the North American automotive market.
You claim that you will not make a product that is not being bought. However, if I remember correctly sales of cars are up in Canada, but dropped heavily in the US. Is the Oshawa plant there to serve the Canadian or US market? Is there no way that you can build more a new product in the truck plant?
David Paterson: These decisions have nothing to do with product quality or Canadian economic conditions. Over ninety percent of the trucks we build in Canada are exported to the U.S. and the decision is driven by the US crisis in housing, the tightening of credit, and rising fuel prices - factors impacting all truck manufacturers. GM will continue to manage the transformation of its business to adapt to new realities in the North American vehicle market.
Why would GM sign a deal with the union and then 2 weeks later change their minds? Does that mean that anything that is in writing with GM cannot be trusted?
David Paterson: GM has been carefully watching the market for full-size trucks and for the last several years there has been a slow yet steady decline in industry truck sales in the pickup and large utility segments. Recently, there has been a dramatic and rapid shift from trucks to cars and crossovers in the US. This is driven by the crisis in US housing, the tightening of credit, and rising fuel prices.
Consumer demand is moving away from trucks towards cars and crossovers. We acknowledge that in our recent CAW agreement discussions, we indicated our intent and hope to see the next generation pickups come to Oshawa in the future. We have since faced this dramatic and rapid shift from trucks towards cars and crossovers in the US market.
We will likely cease production in 2009 but we have not made any final decision upon a plant closing. We will watch the US market and while we do not expect the market to recover fully, if there was an unexpected return in pickup demand we'd consider Oshawa if that additional capacity was again required .
Good Morning,
in our class we have been discussing debate. The same issue was debated, with two different sides. We started to learn about what is happening in Oshawa at the GM plant and related to 2 concepts together.
Here is our question.
How might GM help the workers who are being laided off?
Our suggestions :
-Training for new jobs
-Putting together a list of potential local jobs
-Send laid off employees to different auto plants
-Send laid off employees to other GM plants that are not closing
Thank you for reading our letter.
We hope for a good ending to the problem.
David Paterson:
While we will likely cease production at Oshawa Truck in 2009, we will manage actual job impacts with the CAW to ensure as smooth a transition as possible for employees. Depending on seniority, hourly workers can receive up to 65% of their base wages in income security benefits and related fringe benefits.
I cannot understand why GM and other major automobile manufacturers are not leading the change to ultra-efficient and low or non-polluting vehicles, rather than being led by tradition and current consumer buying habits. If the excuse is, We make what the people want, I would counter that by saying, Show us something we'll want, and we'll buy it. Is GM going to focus on hybrid and non-polluting vehicles or continue to build cars and trucks which contribute to global warming?
David Paterson: GM is well positioned with a range of new cars and crossovers and moving faster than its competitors to bring forward new fuel-efficient vehicle technology. GM offers more cars that get better than 7L/100 km on the highway than any other automaker, like the new Chevrolet Malibu, Pontiac Vibe and Saturn Astra. We will have eight hybrid models by the end of this year, more than Toyota and Honda, and the hybrid version of the Chevrolet Malibu is the most affordable hybrid in the market. We are also leading the way in advanced vehicle technologies with the worlds largest test fleet of fuel cell vehicles and the Chevrolet Volt electric car.
Why is Toyota and Honda opening plants while GM is closing them? They are both competing in the same tough market. What lessons can GM learn from their competitors?
David Paterson: There is no question our business is transforming across North America just as GM is rapidly expanding its capacity in other global markets. It is important to remember that we have also just completed the largest series of new investments in Canadian automotive history – ($3 billion which is more than twice Toyota’s new investments), including a new flexible manufacturing line at the Oshawa car plant.
GM still drives more than half the $30 billion in supply chain purchases in Canada and we are very focused on building our leadership in hybrids, alternate fuel vehicles, electric vehicles and more – and lots of that engineering happens here in Canada. So we are committed to Canada and we are transforming our business and our products to ensure we are leaders here for another 100 years.