General Motors announced Monday that its Oshawa Assembly factory in Ontario, Canada as well as four other plants will be “unallocated” in 2019, prompting backlash from local laborers and Canadian officials.
The Oshawa plant is responsible for final assembly and painting of the Chevrolet Silverado and GMC Sierra, production of all North American-spec Cadillac XTS sedans, and the Chevrolet Impala, which it splits with the Detroit-Hamtramck facility. Both the trucks and the Cadillac are at the end of their product cycles, and despite GM CEO Mary Barra previously affirming a future for the Impala, the automaker confirmed the Detroit-Hamtramck plant will suffer the same fate has the Oshawa plant, which is believed to spell the end for the model.
GM explains its justification for closing the plant is due to a changing market preference for crossovers instead of traditional body styles such as sedans.
“With changing customer preferences in the U.S. and in response to market-related volume declines in cars, future products will be allocated to fewer plants next year,” the company stated.
Canadian private sector labor union Unifor, some of whose members are employed at the plant, was informed Sunday that GM has no planned product allocation to the plant after December of 2019. The union responded by calling on GM to honor “commitments made during 2016 contract negotiations.”
“Oshawa Assembly is GM’s most decorated plant with a highly skilled, committed workforce,” stated Jerry Dias, Unifor’s national president. “Additionally, the USMCA provides the Canadian auto industry with firm footing so walking away after a hundred year history of manufacturing makes no sense.”
Dias was adamant that Unifor, its members, and the plant’s other employees can negotiate re-allocation of products to the plant.
“Unifor does not accept the closure of the plant as a foregone conclusion,” he continued. “Oshawa has been in this situation before with no product on the horizon and we were able to successfully make the case for continued operations. We will vigorously fight again to maintain these good-paying auto jobs.”
Unifor members have staged a walkout in protest of the planned closure, and Canadian officials have expressed displeasure with GM’s intent to cease operations in Oshawa.
“The first thing I said is, ‘What can we do? What do we have to do?'” said Canadian primmer Doug Ford, recalling for Reuters a phone call with GM Canada president Travis Hester. “He said the ship has already left the dock.”
“We’re disappointed in GM. We supported GM years ago when they were in trouble,” he added, referring to the Canadian government’s contribution to GM’s financial bailout in 2009. Government funds also modernized the Oshawa plant’s painting facility in 2005. Even Canadian prime minister Justin Trudeau issued a statement on the plant’s closure via social media.
One former auto executive told Reuters it was unlikely that governmental pressure would reverse GM’s decision to vacate Oshawa.
“The government has done everything they could to keep them afloat. Obviously, incentives by themselves don’t keep a car plant open. It’s all about getting a product mandate.”
Plant closures and production eliminations are part of a cost-cutting initiative by GM. The automaker began contract buyouts of senior employees across North America earlier this month, targeting salaried workers who started with the company prior to Dec. 31, 2018. As of Saturday, the buyouts were reportedly fewer in number than the company hoped, with just 4,000 of 18,000 buyout offers accepted, around 3,000 short of GM’s target. This may trigger as many as 3,000 layoffs in early 2019.
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