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GM plant closing in Oshawa 'absolutely sickening'

A GM storage lot at the company's Oshawa, Ont., plant.

Kevin Van Paassen

Employment at General Motors of Canada Ltd., once the biggest employer by far in the auto sector in Canada with more than 40,000 workers, will fall to about one-fifth that number by next June when it ceases production on one of two assembly lines at its Oshawa, Ont., plant.

The Canadian Auto Workers union received official notice Friday that GM will begin shutting down its consolidated assembly line in the fourth quarter, which will wipe out 2,000 jobs, reducing the number of GM employees in Canada to about 8,000.

That's fewer than the 9,400 people who work at Chrysler Canada Inc. and about the same as the 8,000 employees at the three units of Toyota Motor Corp. in Canada.

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The closing was announced in 2005 and originally scheduled for 2008, so by the time production stops next June, the union and the company will have squeezed five more years of production out of the plant than expected.

It's the final piece in one of the periodic restructurings General Motors Corp. made over the past decade amid a steady decline in market share and growing cost burden that ultimately led the auto maker to file for Chapter 11 bankruptcy protection in 2009. In the early 1990s, GM had more than 40,000 employees in Canada before closing assembly plants in Toronto and Ste. Therese, Que., a truck assembly facility in Oshawa, and a transmission factory in Windsor, Ont.

Although union officials have known for years that the closing decision would be hard to reverse, they criticized GM's inability to find new vehicles to assemble on the line. Three shifts of workers crank out Chevrolet Impala mid-sized sedans and do the final assembly of Chevrolet Equinox crossovers shipped in from Ingersoll, Ont.

"This is absolutely sickening," said Chris Buckley, president of CAW local 222, which represents workers on that line and the neighbouring flexible assembly line.

The Impala is being redesigned for the 2014 model year and production of that car will shift to the flex plant, which also produces Chevrolet Camaro, Buick Regal and Cadillac XTS cars.

Workers who assemble vehicles on the line that is closing could be hired next door, if a third shift is added to the flexible line. There are no plans, however, to add a third shift to the flexible line, GM Canada spokeswoman Faye Roberts said Friday.

"We think production volumes are manageable with two shifts," Ms. Roberts said.

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She said the shutdown will happen in three stages, so it's not clear how many people will be laid off or how many might retire between now and the closing.

Industry Minister Christian Paradis called GM's decision to shut the Oshawa line a "disappointment" but pointed out the company had already made the decision to close it in 2005.

Canada is a shareholder in GM but the minister suggested he's not about to dictate what the auto company should be doing as long as it lives up to the investment and research commitments it made in 2008.

"It's still a private matter. It's still a private decision," he said of GM's move to close down the Oshawa plant.

He said the Harper government considers its primary task to keep taxes and tariffs low in order to attract more auto investment.

He said he's regularly pressing GM to consider making new investments here.

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"We have to continue to work to ensure we can attract investment from these guys and that is what we are seeking to do, I assure you."

He said labour and the provincial government have a role to play in ensuring auto makers see Ontario as a place to expand their assembly work.

"I keep constant contacts with the companies to say we're a good place to invest."

Mr. Paradis declined to say whether Ottawa is inclined to offer assistance to GM or other auto makers to make further investments, adding he can't speak to hypothetical situations.

"It's hard to speculate when there is no business case in front of us," he said.

He said he couldn't say when Canada would sell its GM shares, saying that's up to Finance Minister Jim Flaherty.

Mr. Buckley of the CAW said workers should not be losing their jobs after the concessions they made during the 2008-2009 auto crisis, which helped keep the Canadian unit out of creditor protection and win approval for federal and Ontario taxpayer contributions of more than $10-billion to the bailout of General Motors Co.

If there's enough demand that a third shift is added in Oshawa, employment on the flex line would rise to about 2,500 from 2,000 now, he said.

The Chevrolet Equinox crossovers now being shipped to Oshawa will instead be built at the company's former Saturn plant in Spring Hill, Tenn., which GM is reopening after closing it when it killed off Saturn during the Chapter 11 restructuring.

The Spring Hill plant is reopening because the United Auto Workers agreed to allow the company to hire a large number of workers at wages of about $14 (U.S.) an hour and minimal benefits. That compares with about $32 (Canadian) in hourly wages in Oshawa.

The CAW calls such wage-cutting a race to the bottom and has stood fast against wage reductions.

If the Canadian union agreed to such cuts, it would soon be asked to match the $6 an hour Mexican workers are being paid, Mr. Buckley argued Friday.



With files from reporter Steve Chase in Ottawa

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About the Author
Auto and Steel Industry Reporter

Greg Keenan has covered the automotive and steel industries for The Globe and Mail since 1995. He also writes about broader manufacturing trends. He is a graduate of the University of Toronto and of the University of Western Ontario School of Journalism. More

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