GM Oshawa's bombshell closure fuels calls for green economy policies in Ontario

An abrupt announcement by General Motors that its state-of-the-art manufacturing plant in Oshawa, Ont. will be closed triggered fresh concern about the province's lack of clean economy policies and alarm about the impact of mass layoffs.

GM has been manufacturing cars in Oshawa for 100 years, but on Monday the Detroit-based automaker announced its plants in Oshawa and four American communities were being shut to facilitate a major restructuring that will double their investment in electric vehicles and self-driving cars.

The closure will affect over 2,500 hourly and salaried workers in the plant, more than a third of GM's workforce in Canada, as well as parts and other suppliers and an array of businesses that depend on their incomes. Thousands of GM Oshawa workers walked off the job to protest Monday the news of the plant's closure by the end of 2019.

The dramatic news comes two years after GM announced it would create over 700 jobs for engineers at a new software research centre in Markham, focused on self-driving cars. This centre was unaffected by Monday’s cuts.​​​​ GM's two other Ontario manufacturing plants in St. Catharine's and Ingersoll were also unaffected.

DesRosiers Automotive Consultants says the Oshawa plant had seen a severe drop in the manufacturing in recent years due to a decline in demand for sedans. Production declined from 940,044 in 2003 to over 148,133 in 2017, according to their data.

Last year, the company announced several new electric vehicles would be added to its manufacturing roster. The car manufacturer said Monday it "now intends to prioritize future vehicle investments in its next-generation battery-electric architectures."

But, in its first five months in office, the Ford government has eliminated rebate programs for electric car buyers and scrapped all policies that would make Ontario an attractive place for such clean economy manufacturing initiatives, including the cancellation of 758 clean energy contracts, a cap and trade program to reduce carbon emissions and no plan to address climate change.

The Ford government has also taken a strong stand against the federal price on pollution, committing to a $30 million lawsuit to fight it.

Opposition members and critics were quick to link GM's decision to shut down its Oshawa operations.

"It sends a signal to job creators and investors that Ontario is not interested in embracing a clean economy," Green Party leader and MPP Mike Schreiner told reporters. "We need a premier who will put evidence above ideology and shelve his anti-environmental, anti-clean economy agenda and embrace where investment and job creation in the world is going."

"The government needs to be at the table when it comes to helping these kind of manufacturers retool their operations to build the cars of the future," NDP leader Andrea Horwath told reporters. "The reality is that around the world governments around the world partner with industry to make sure that their existing footprints are stable and that our investments are brought higher."

"Taking away these subsidies is having a huge impact already," Hassan Yussuff, president of the Canadian Labour Congress, said in a phone interview. "This is a dumb decision on (Ford's) part, and they did it without understanding the whole sector."

Closure happened 'after 15 years of terrible policies': Doug Ford

As Oshawa workers battled against the loss of their livelihoods on Monday morning and geared for what the union deemed as "one hell of a fight," federal and provincial politicians embarked on a partisan debate that tested every politician's allegiance to the auto industry and their commitment to a transition to a clean economy.

During question period, Premier Doug Ford told the provincial legislature that he had spoken to Prime Minister Justin Trudeau in the morning to discuss changes to the employment insurance eligibility for the laid off workers, the extension of work-sharing agreements and the reintroduction of the Career Transition Assistance Initiative to retrain workers (a program that was last used during the 2008 recession).

"We may have our political differences, but when it comes to supporting the people of Durham and Ontario, we’re on the same page," Ford told the legislature, noting that the day was not about pointing fingers at anyone but helping the workers.

Prime Minister Trudeau echoed these comments in Ottawa later in the day and in a subsequent tweet, noting that both he and the premier had agreed "that we were going to do everything we can to help the workers."

Neither Trudeau nor Navdeep Bains, the federal minister of innovation, science and economic development, outlined any specific options in response to the plant closure but promised they were "going to look at all the options" and work with the province. Bains told reporters "this is not a political issue. This is not about pointing fingers. This is about standing up for the automotive sector, this is about standing up for the auto workers."

In his remarks to the legislature, Ford insisted that he, too, would "make sure all three levels of government work together" to help the workers, but within minutes he took shots at both the NDP and Liberal members for creating an environment for the closure to happen.

"After 15 years of terrible policies—don’t think their decision to change over to another location happened yesterday. It didn’t happen in five months. It didn’t happen in six months. It happened well over a year ago," Ford said, taking aim at the 15 years of Liberal rule over the province.

Ford then took aim at the NDP: "For 15 years, you destroyed this province — 300,000 jobs were destroyed because you voted with the Liberals 97 per cent of the time. You’ve destroyed the energy sector. You’ve destroyed manufacturing. You’ve destroyed 300,000 families that are trying to put food on the table. That’s what you destroyed."

Afterwards, Todd Smith, Ontario minister of economic development, echoed the premier by noting that the news was a result of "15 years of mismanagement."

"The writing has been on the wall for quite some time," Smith added. "The premier and I have heard the alarm bells ringing not just for when it comes to GM but other manufacturers in Ontario."

General Motors gives 'resounding no' to government assistance

Both Smith and Ford confirmed they received news of the closure on Sunday. Ford told the legislature that in his conversation with the president of GM, he had asked what assistance the government could provide. According to the premier, the president said "the ship has already left the dock."

The premier told reporters the company had given him a "resounding no" to any offer of assistance.

"The era of building cars and trucks appears to be over in Oshawa so it's really disappointing," Smith told reporters.

According to GM’s website, production at the Oshawa plant began on Nov. 7, 1953. In the 1980s, it employed roughly 23,000 people. The plant makes the Cadillac XTS and Chevrolet Impala sedans as well as the Chevrolet Silverado and GMC Sierra trucks.

Unifor national president Jerry Dias said in April that the Oshawa complex was headed for closure in June of this year. But he noted the former head of GM Canada, Steve Carlisle, was determined it wouldn't close on his watch.

Carlisle was moved that month to head Cadillac, the global automaker's luxury car division, as part of a management rotation. At the time of the transfer, Dias said Carlisle's appointment to lead Cadillac would raise his profile and influence within GM's headquarters in Detroit, and that "would be a huge benefit for us."

In 2008, the Canadian government provided the car manufacturer a $3.29 billion bailout to keep Canadian branches running while the companies were restructured and rebuilt — a fact that critics say puts an onus on GM to stand by its Canadian workers.

"Canada stood by General Motors when they needed it. They owe the workers and Canada a lot," Yussuff said. "This is a slap in the face...they've done all the things they needed to do to attract new product and investment."

The premier, who recently unveiled an “Ontario — Open For Business” sign along the U.S. border at Sarnia, said the GM announcement is “devastating” but that his government had "absolutely" done a lot of work in ensuring that a strong clean economy was being developed in the province, listing the scrapping of the "carbon tax," their efforts to "lower hydro bills" to create "a competitive economy."

Ford vowed to continue to strengthen the province's business competitiveness and "diversify," although he didn't expand on how he would do this.

"We have to pick ourselves up get back on our feet and be as positive as we can," Ford said.

Ontario needs 'a strategy to keep manufacturing'

But critics noted that GM Oshawa's workers deserved more than just retraining assistance from the provincial and federal governments. The shocking closure of the Oshawa car factory demanded a dedicated auto strategy and clean economy plan, they said.

"He just canceled the (cap and trade) credit that brought investment in the auto sector," interim Ontario Liberal leader John Fraser told reporters on Monday. "Its a cave man approach. His science is prehistoric. Companies like GM and the world are going in a certain direction. And we know where they’re going: cleaner and greener. They’re investing in technology, artificial intelligence. That’s where the jobs are."

"For the premier to say that ship is sailed, it's unbelievable. Its an insult to those families that need their help," Fraser said.

Horwath said the premier was walking away from his responsibility by focusing on corporate taxes and hydro rates over the innovation of the auto sector to keep the jobs in the province. "We have to realize there’s a big change coming in the automotive industry and we should be at the front end of that, not burying our heads in the sand and watching jobs walk away," she told reporters at Queen's Park. "(We should be) saying to the auto industry that we are there to make sure their investments in our communities are solid."

Yussuff said that Oshawa workers needed more than just retraining services and severance packages. They needed "a strategy to innovate manufacturing."

"These workers can go from producing cars to electric vehicles...they have the skills and abilities to do that tomorrow morning," Yussuff said. "But the entire supply chain is under threat, and all levels of government need to address that," listing the car parts factories near the Oshawa plant that would also be hurt.

Schreiner urged the provincial government to consider "a transition strategy to transition workers who are in old economy jobs into new economy jobs."

"Bottom line is we’re a leader in the auto sector and if we’re going to remain a leader, we need a province that’s going to embrace electric vehicles," he said.

With files from Canadian Press

If you’ve made it this far, you must care about in-depth and responsible journalism. How about supporting more articles like this one in National Observer? Get 60% off during our Cyber Monday sale for access to Canada’s top investigations on energy, climate, the environment and more. If you’re already a subscriber, please consider gifting a subscription, just in time for the holiday season.