The faint hope that existed at the end of 2018 in regards to General Motors’ Oshawa, Ontario assembly plant no longer exists, except maybe in the minds of the most optimistic of union brass. On Tuesday, the automaker told Unifor, the union representing Detroit Three autoworkers in Canada, that its proposals to save the country’s oldest auto plant weren’t feasible.
GM laid out its reasoning in a letter to Unifor President Jerry Dias. As before, it all came down to cost … and the public’s dislike of cars.
“There were a variety of declining and significant economic and market factors that precipitated the November 26th announcement, including but not limited to the substantial decline in the large car market caused by market shifts from sedans to crossovers and SUVs, significantly increased material costs, the discontinuation of the products currently produced at Oshawa, and excess capacity at GM combined with very low capacity utilization at Oshawa assembly,” read the letter, signed by Gerald Johnson, GM VP of labor relations, and Travis Hester, president of GM Canada.
“These economic factors created an imperative need to consolidate operations, reduce costs and improve cash flow.”
GM says it analyzed Unifor’s proposals “and re-examined those that had been previously discussed internally,” but ultimately couldn’t find a way to allocate new product in a manner that didn’t increase GM’s cash outflow.
“Unfortunately, all Unifor’s proposals would involve substantial incremental costs and a further deterioration of GM’s competitive position,” the company wrote. “Having completed an analysis of Unifor’s proposals, GM has determined that it cannot pursue them because they would not combat the declining economic and market factors that must be addressed.”
The automaker said it planned to work with Unifor to “discuss transition strategies and supports” for the roughly 1,500 workers at the plant, which opened in 1907. In response to the letter, workers walked off the job Tuesday night.
“The workers were so upset they couldn’t work. They couldn’t believe that General Motors had announced that all their hard work was going to be rewarded by cancelling their livelihoods, by telling them the plant is closing,” Unifor plant chairman Greg Moffatt told assembled media. Those workers would return to their jobs Wednesday morning, Moffatt added.
Unifor has long railed against GM’s desire to cut costs by boosting Mexican vehicle output, and did so again yesterday. Dias previously said that new vehicles like the Mexican-built Chevrolet Blazer could easily have been allocated to Oshawa. Instead, the company’s Indiana-to-Ontario truck shuttle program (previous-gen Silverados and Sierras) will dry up before the end of the year, along with production of the Cadillac XTS and Chevrolet Impala.
“We are not calling for a boycott, but we are asking Canadian consumers to continue showing their displeasure with this decision,” said Dias following a meeting with GM brass in Detroit. Dias vows that the fight will continue.
Of course, Oshawa isn’t alone in shouldering the pain born of GM’s restructuring efforts. Joining it on the chopping block are two transmission plants in Michigan and Maryland, GM’s Detroit-Hamtramck Assembly, and Lordstown Assembly in Ohio.