'Why can't they make the future in Oshawa?' GM VP on electric cars, pensions, and more

As thousands of workers from the GM Oshawa plant deal with the reality of being out of a job a year from now, Susan Ormiston talks to the vice president of corporate and environmental affairs about why it had to happen like this.

The Canadian factory closure has 'absolutely nothing to do' with the U.S. president, GM executive says

Workers at the Oshawa, Ont., plant were told Monday they will be out of a job by the end of 2019. (Eduardo Lima/Canadian Press)

Come this time next year, thousands of Ontario General Motors workers will be facing the stark reality that their time at the Oshawa assembly plant is coming to an end. The automotive giant confirmed yesterday that the plant is one of six that will close in North America. 

GM said it's all part of a global plan to cut costs and dedicate more resources to developing electric and autonomous vehicles. But news that the Oshawa plant would be shuttered left many wondering why the century-old facility was being left out of the future. 

Senior Correspondent Susan Ormiston asked David Paterson, GM's vice president for corporate and environmental affairs, about that — and more. 

GM's Paterson explains why the Oshawa, Ont., plant can't build the vehicles of the future. (CBC News)

Susan Ormiston: So does this plant go because of the U.S. president's aim to make America first and make America great again and produce in America?

David Paterson: This has absolutely nothing to do with the president. This decision has to do with simply being able to make the transition to the future and reallocate capital into the massive investments that are needed for electric vehicles and autonomous vehicles.

The good news is that in terms of that technology, the one place in the world where we are able to do the software development and the high-tech work that is needed for the future is actually in Canada. We have just opened the Markham technology centre.

We're hiring up to 1,000 technical engineers right now. We've hired 500 in last year, and we'll expand that technology centre that's in Markham that will build the cars of the future and the technology of the future.

GM says the Oshawa closure has nothing to do with Trump's 'America First' policy. (Eduardo Lima/Canadian Press)

SO: Given the Canadian investment in GM over the years, why can't the electric and [autonomous] vehicles be made here instead of somewhere else ... why can't they make the "future" here in Oshawa?

DP: We can make anything here in Oshawa. We could make any type of vehicle...

SO: So why isn't GM investing in that?

DP: Because there are only so many vehicles on a global basis that are available for the production footprint of GM. We have 75 plants around the world, but we have far too many plants for the demand in the marketplace.

If there is a surge for demand for electrical vehicles then perhaps there's going to be a need for more production. But you don't produce things unless there's a market demand for the products.

Watch Susan Ormiston press GM's David Paterson on the Oshawa plant's future:

Susan Ormiston asks GM Vice President of Corporate and Environmental Affairs why the Oshawa plant can't be used to build the vehicles of the future 1:15

SO: What are GM's plans to settle with the workers here who have 18 to 24 months left on their contracts? 

DP: Our next steps in dealing with our workers is to sit down and discuss how we make this transition in the next year.

SO: What can you offer them?

GM Vice President, Corporate and Environmental Affairs, David Paterson, says not all of the workers will be relocated to other Ontario plants. (Sylvia Thomson/CBC News)

DP: Well, about half of the workers impacted in GM Oshawa already qualify for a full GM pension. So they'll be able to retire with a little better than a full pension.

The other half are already covered under the terms of our agreement with Unifor. So they would have things such as additional income support, 65 per cent of base salary, and then whatever else we could negotiate with Unifor in terms of when they would leave and under what benefits and what conditions. So we treat our people very well.

SO: How many of the existing workers can find work within GM elsewhere?

DP: We expect that about half of them will move to retirement because they're eligible. And then we'll take a look at which other ones might be able to find work either at our Ingersoll [plant] ... or how many would be able to find work at our other plant in St. Catharines. We need to go through that process. But they won't be able to all be moved to other plants.

Susan Ormiston asks David Paterson whether there will be jobs for everyone at other Ontario plants:

Susan Ormiston asks GM Vice President of Corporate and Environmental Affairs David Paterson how many of the current Oshawa workers could move to other Ontario GM plants. 0:28

This interview has been condensed for length and clarity.