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CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

GM’s Oshawa announcement stirs debate

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The announcement by GM that it will shutter its Oshawa car plant at the end of 2019 has provoked a storm of comment and controversy.

The fact that the announcement wasn’t literally a shutdown notice – GM simply said that at the end of 2019 the plant won’t have any production “allocated’ to it – seemed to leave the door open for a range of interpretations. While the news is definitely very bad, not all analysts were certain that it was the end of the road for Oshawa or for Canada’s auto industry.
Here’s a rundown of some of the comment Shop Talk has had a look at.
Oshawa could actually bounce back as a centre of ‘green’ vehicle manufacturing, said the National Post’s Terence Corcoran in a Nov. 28 column. Corcoran noted that the company’s shutdown announcement came just as it was ramping up its efforts to get governments to “throw money” at its electric vehicle operations.
“I’d give 50-50 odds that Oshawa will eventually be back in operation in some capacity as part of a subsidized effort to reshape the North American auto industry and turn it green,” Corcoran wrote. He also said the company has been secretive about whether the Oshawa plant could be re-allocated to some aspects of its electric vehicle efforts after the stated shutdown date – and he quoted a GM Canada official who told the CBC he’d love to see electric vehicle investments coming into Canada.
The plant shutdown wasn’t quite the big news it was billed as, said Barrie McKenna in a story in the Globe and Mail. McKenna quoted Bank of Montreal economist Robert Kavcik who noted that the auto sector has been playing less and less of a role in Ontario’s economy over the years – and that the Oshawa plant is in fact the smallest of Ontario’s (and that means Canada’s) eight car plants.
“Oshawa has become a symbol of its past, rather than its present,” McKenna opined.
Disruptive change was the theme for Ryan Flanagan on CTV News. Flanagan pointed out that while GM was readying to shut its Oshawa plant down, it also announced it was hiring for new positions in Markham, ON – but that these were anything but the plant-floor jobs that Oshawa is losing.
GM is hiring programmers and engineers at a new research facility the company launched earlier this year.
“GM has said part of the reason it has no plans to produce vehicles in Oshawa past 2019 is because of a company-wide shift to autonomous and electric vehicles,” Flanagan wrote. “That means more white-collar jobs for the likes of software developers, and fewer blue-collar assembly positions.”
Flanagan noted GM president Mary Barra’s statement earlier this week that vehicles have become much more software-dependent and that the company needs to hone programming skills in its workforce.
Canada’s automotive labour force has declined from around 200,000 in the early years of this century to about 125,000 today.
Disruption was also the main theme for Sunil Johal, policy director at the University of Toronto’s Mowat Centre, in a Nov. 27 Globe and Mail column. Johal noted the challenge that the shift to new technologies such as artificial intelligence and the gig economy poses for policy makers as they try to cushion the blow for workers displaced from older, more traditional forms of work.
“The Oshawa plant closing reminds us that these conversations shouldn’t default to a ‘wait-and-see’ approach, which won’t help workers who are in need of better supports right now,” Johal wrote. “Instead, there’s a growing international consensus that governments must focus on overhauling skills training for adult workers who might face multiple job transitions.”
Global News offered a combined article and viceo report on the impact of the GM announcement – also emphasizing the link between the plant closure and the company’s plans to focus on electric and autonomous vehicles. Their report noted that the Oshawa plant has already been hard hit by production redirected to the US and recent buyouts offered to 18,000 white-collar workers. The 2500+ jobs lost directly in the plant in the current shutdown will also lead to 10,000-15,000 “spillover” losses in the auto parts industry, Global News said.
You can view the Global News video report here.
Pete Evans of CBC News remarked on the large symbolic significance of the Oshawa closure, reminding readers that at its peak the plant produced almost a million cars a year. Joe McCabe, a Pennsylvania automotive consultant, told Evans that recently the Oshawa plant has been reduced to “orphan products” – vehicle types that GM really wasn’t all that invested in.
GM has announced that it will stop making some car models altogether, Evans said, though of course that announcement was buried in Canadian media by the news about Oshawa. GM says it plans to generate three quarters of its sales from just five models in future.
“It’s part of a push by GM to invest in places it thinks can make more money — electric, autonomous vehicles, and larger trucks and SUVs with high profit margin,” Evans reported.

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