San Francisco voters approve new taxes for wealthy CEOs and tech companies

Any company whose top executive earns 100 times or more than their average worker will pay a surcharge under new law


Associated Press

Thu 5 Nov 2020

 ‘The very wealthy are gaining more and more. They’ve gotten much richer during the pandemic, while everyone else has remained stagnant,’ says the author of the measure. 

In an effort to address economic disparity laid bare by the coronavirus pandemic, San Francisco voters overwhelmingly approved several tax measures targeting property owners and big businesses with CEOs paid far higher than their average workers.

Under the new law, any company whose top executive earns 100 times more than their average worker will pay an extra 0.1% surcharge on its annual business tax payment. If a CEO makes 200 times more than the average employee, the surcharge increases to 0.2%; 300 times gets a 0.3% surcharge and so on.

Voters also agreed to sweeping business tax changes that will lead to a higher tax rate for many tech companies, and a higher transfer tax on property sales valued between $10m and $25m.

“We’re not gonna shed any tears if penthouse dwellers have to cough up,” the San Francisco League of Pissed Off Voters wrote in its voter guide.

The results “show that San Franciscans are concerned about growing economic inequality”, city Supervisor Matt Haney, the author of the measure titled the Overpaid Executive Tax, said on Wednesday. “The very wealthy are gaining more and more. They’ve gotten much richer during the pandemic, while everyone else has remained stagnant.

“We need the wealth that has been generated in the city to be shared more broadly with workers and residents,” he said.

Critics call the surcharge a blatant attempt at redistribution of wealth and criticized raising business taxes in the middle of a recession.

Since March, Covid-19 restrictions have shut down critical elements of San Francisco’s economy. Tourists are scarce, and legions of workers in tech and in the city’s main business and financial districts have left, able to work remotely from anywhere. Office vacancy rates went up while rents in the prohibitively expensive city dropped to their lowest in years.
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“The middle of pandemic-fueled shutdown is the wrong time to raise taxes,“ said Jim Wunderman, president and CEO of the business advocacy group Bay Area Council. “The drip, drip, drip of new general taxes is going to erode the already shaky foundations of local economies decimated by the worst downturn in generations.”

The CEO tax is expected to generate between $60m and $140m per year, and Haney said he wants most of the money directed towards health services. He dismisses fears that the surcharge will drive companies out of the city, saying the tax was modest in comparison to the cost of moving a business. He said he hoped the tax would drive companies to re-examine their compensation structure and will ultimately be adopted on a national level.

The tax is somewhat similar to an executive-pay surcharge passed by the city council in Portland, Oregon, nearly four years ago. San Francisco city leaders considered the idea several years ago, and a 2014 state proposal to lower taxes for companies whose executives were paid less than 100 times the median worker did not pass in the California legislature.

“The idea didn’t get a lot of traction because people in San Francisco didn’t feel it made sense to tax CEOs,“ political consultant Jim Ross said. “But now you’re seeing a big segregation between the have and have-nots as executives get absurdly paid while others are struggling.”

 

Patients reported international hydroxychloroquine shortages due to
COVID-19

AMERICAN COLLEGE OF RHEUMATOLOGY

Research News

 

ATLANTA -- A new study shows that patients with rheumatic diseases across Africa, Southeast Asia, the Americas and Europe had trouble filling their prescriptions of antimalarial drugs, including hydroxychloroquine, during the 2020 global coronavirus pandemic, when antimalarials were touted as a possible COVID-19 treatment. Patients who could not access their antimalarial drugs faced worse physical and mental health outcomes as a result. Details of the research was presented at ACR Convergence, the American College of Rheumatology's annual meeting (ABSTRACT #0007).

Systemic lupus erythematosus, also called lupus or SLE, is a chronic (long-term) disease that causes systemic inflammation which can affect multiple organs: the skin, joints, kidneys, the tissue lining the lungs (pleura), heart (pericardium) and brain. Many patients experience fatigue, weight loss and fever. Antimalarial drugs are taken regularly by most people with lupus, as well as many with rheumatoid arthritis (RA) and other rheumatic diseases.

In the early weeks of the global SARS-CoV-2 (COVID-19) pandemic, two antimalarial drugs often used to treat lupus and RA, hydroxychloroquine and chloroquine, were touted to potentially prevent or treat COVID-19 infections. Both drugs were suddenly repurposed as COVID-19 treatments despite a lack of data to support this use, leading to worldwide shortages of both. A team of international researchers launched this study to assess the effects of antimalarials on COVID-19 infection and the impact of drug shortages on people with rheumatic disease.

"The COVID-19 Global Rheumatology Alliance's Patient Experience Survey was launched in April 2020 during the early days of the pandemic, when the scientific and research communities were under extraordinary pressure to identify safe and effective treatments for SARS-CoV-2. Since hydroxychloroquine is an essential treatment for RA and lupus, reported drug shortages of antimalarials became a major concern," says the study's lead author, Emily Sirotich, a doctoral student at McMaster Centre for Transfusion Research in Hamilton, Ontario. and Patient Engagement Lead of the COVID-19 Global Rheumatology Alliance. "The aims of this study were to assess the prevalence and impact of drug shortages during the COVID-19 pandemic, and whether the use of antimalarials in patients with rheumatic disease was associated with a lower risk of COVID-19 infection."

Data for the new study was collected using the COVID-19 Global Rheumatology Alliance Patient Experience Survey. The survey was distributed online through patient support organizations and social media. Both patients with rheumatic diseases and parents of pediatric patients anonymously completed the surveys with information on their rheumatic disease diagnosis, medications they take, COVID-19 status and any disease outcomes. The researchers evaluated the impact of antimalarial drug shortages on patients' disease activity, as well as their mental health and physical health.

Of the 9,393 people who responded to the survey, 3,872 were taking antimalarial drugs and 230 said they were unable to continue taking their medications because of a lack of supply at their pharmacy. Antimalarial shortages were worse for people in Africa and Southeast Asia: 26.7% of respondents in Africa and 21.4% of respondents in Southeast Asia reported inadequate supplies at local pharmacies. Patients in the Americas (6.8%) and Europe (2.1%) also reported being unable to fill their prescriptions at their pharmacy due to lack of supply.

The study found that patients on antimalarials and those who did not take these drugs had similar rates of COVID-19 infection. A total of 28 patients with COVID-19, who were also taking antimalarials, were hospitalized. Of 519 patients diagnosed with COVID-19 in the survey, 68 reported that they were prescribed an antimalarial for their coronavirus infection. Patients who could not fill their antimalarial prescriptions experienced higher levels of disease activity and also experienced worse mental and physical health symptoms, the study found.

"The findings from this study highlight the harmful consequences of repurposing antimalarials, without adequate evidence for benefit, on patients who rely on access to their hydroxychloroquine or chloroquine prescriptions for their rheumatic diseases," says Ms. Sirotich. "It is necessary to maintain scientific rigor even in the context of a pandemic and recognize the potential impacts of drug shortages. It is also important to address regional disparities in access to medications, to ensure all people, particularly those living in developing countries, receive fair and equitable access to their essential medications."

###

About ACR Convergence

ACR Convergence, the ACR's annual meeting, is where rheumatology meets to collaborate, celebrate, congregate, and learn. Join ACR for an all-encompassing experience designed for the entire rheumatology community. ACR Convergence is not just another meeting - it's where inspiration and opportunity unite to create an unmatched educational experience. For more information about the meeting, visit https://www.rheumatology.org/Annual-Meeting, or join the conversation on Twitter by following the official hashtag (#ACR20).

About the American College of Rheumatology

The American College of Rheumatology (ACR) is an international medical society representing over 7,700 rheumatologists and rheumatology health professionals with a mission to empower rheumatology professionals to excel in their specialty. In doing so, the ACR offers education, research, advocacy and practice management support to help its members continue their innovative work and provide quality patient care. Rheumatologists are experts in the diagnosis, management and treatment of more than 100 different types of arthritis and rheumatic diseases.

ABSTRACT:

Antimalarial Drug Shortages During the COVID-19 Pandemic: Results from the Global Rheumatology Alliance Patient Experience Survey

Background/Purpose:

Early in the COVID-19 pandemic, hydroxychloroquine and chloroquine were empirically promoted and used for treatment and prevention of SARS-CoV-2 infection. The repurposing of these drugs before robust efficacy data were available led to potentially harmful shortages for people with rheumatic diseases. The aims of this study were to assess (1) whether the use of antimalarials in patients with rheumatic disease was associated with a lower risk of COVID-19 infection, and (2) the prevalence and impact of drug shortages during the COVID-19 pandemic.

Methods:

The COVID-19 Global Rheumatology Alliance (C19-GRA) Patient Experience Survey was distributed online through patient support organizations and on social media. Patients with rheumatic diseases (or the parents of pediatric patients) anonymously entered data including their rheumatic disease diagnosis, medications, COVID-19 status, and disease outcomes. Impact of drug shortages was evaluated for the effect on patient disease activity, mental health and physical health states by comparing mean values with two-sided independent t-tests to identify significant differences.

Results:

From 9,393 respondents (mean age 46.1 (SD 12.8) years, 90.0% female), 3,872 (41.2%) were taking antimalarials (Table 1). Of these, 230 (6.2%) were unable to continue taking antimalarials because of a lack of supply at their pharmacy. 21.4% of patients in South-East Asia and 26.7% in African regions reported an inadequate supply of antimalarials in pharmacies, in contrast to 6.8% of patients in the Americas and 2.1% in European regions. There were similar rates of COVID-19 infection among patients on antimalarials as compared to patients not on these drugs (6.7% vs. 4.7%). A total of 28 patients (10.8%) with COVID-19 who were taking antimalarials were hospitalized. Of 519 patients diagnosed with COVID-19, 68 (13.1%) indicated they were prescribed antimalarials as a treatment for their COVID-19 infection.

Patients who were unable to obtain antimalarials from their pharmacies compared to those who did not experience medication shortages experienced higher levels of rheumatic disease activity (5.1 > 4.3, t(244) = 4.44, p < 0.001) (Figure 1) and poorer mental (5.8 < 6.3, t(252) = 3.82, p < 0.001) and physical health (5.6 < 6.4, t(254) = 5.97, p < 0.001) (Figure 2).

Conclusions:

Patients in African and South-East Asian regions reported greater difficulty obtaining antimalarial drugs to treat their rheumatic disease in contrast to patients in the Americas and European regions. Patients who experienced antimalarial drug shortages reported worse mental and physical health outcomes than those able to obtain their medications. Antimalarials did not protect patients with rheumatic disease from COVID-19 or from hospitalization as a result of COVID-19. The unintended harmful consequences of repurposing antimalarials, without adequate evidence for benefit, highlights the importance of maintaining scientific rigor even in the context of a pandemic. Regional disparities of access to medications should be addressed to ensure all people, particularly those living in developing countries, receive fair and equitable access to these essential medications.

Disclaimer: AAAS and EurekAlert! are not responsible for the accuracy of news releas

Court orders FDA to assess environmental impact of GM salmon

NEW YORK — A federal court judge ordered the U.S. Food and Drug Administration on Thursday to conduct an environmental assessment of genetically modified salmon that he said was required for the agency’s approval of the fish.

© Provided by The Canadian Press

But the judge did not vacate the FDA’s approval of the salmon for human consumption in the meantime, because he said the risk for near-term environmental harm is low.

“The FDA has to go back to the drawing board and do its homework,” said George Kimbrell, legal director for the Center for Food Safety, one of the groups that filed suit challenging the agency's approval of the genetically modified salmon.

The ruling by U.S. District Court Judge Vince Chhabria in San Francisco centres on AquaBounty’s salmon, which are genetically modified to grow faster than normal salmon. In 2015, the fish became the first genetically modified animal approved for human consumption in the U.S. After clearing other regulatory hurdles. AquaBounty began growing the fish in indoor tanks at an Indiana plant last year.

In an email Thursday, a representative for AquaBounty noted that the ruling covered the potential environmental impact of the fish, and not the health and safety of eating them. The company said the salmon are not yet being sold in the U.S.; it had previously said the fish could be in the market by late this year.

The FDA said in a statement that its approval of the salmon remains in place but did not address the judges ruling on the adequacy of its environmental assessment.

To ensure the fish do not escape and breed with wild fish, Massachusetts-based AquaBounty says its salmon are raised in tanks and bred to be female and sterile.

But advocacy groups maintain the company’s own tests have shown it’s not 100% certain the fish would be sterile, and that the risk of fish escaping into waters could grow if the company were to expand operations.

In his ruling, Judge Chhabria noted that the FDA determined the probability of the salmon escaping and surviving in the wild to be quite low. But he said the company's production could expand, and that “with every new facility built, the possibility of exposure grows.” And even if it’s unlikely the fish could get into the wild, he said the FDA was still required to assess the consequences of the possibility.

AquaBounty fish are Atlantic salmon injected with DNA from other fish species that makes them grow faster. The salmon already has been sold in limited quantities in Canada, where it doesn’t have to be labeled as genetically modified, the company has said.

___

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

Candice Choi, The Associated Press

Washington Supreme Court: Farmworkers to get overtime pay

SEATTLE — A divided Washington Supreme Court ruled Thursday the state’s dairy workers are entitled to overtime pay if they work more than 40 hours a week, a decision expected to apply to the rest of the agriculture industry.

© Provided by The Canadian Press

For the past 60 years, state law — like federal law — has exempted farmworkers from classes of workers who are entitled to overtime pay, but in a 5-4 ruling the court found that unconstitutional. The majority said the Washington state Constitution grants workers in dangerous industries a fundamental right to health and safety protections, including overtime, which is intended to discourage employers from forcing employees to work excessive hours.

The ruling applied directly only to the dairy industry, but its reasoning covers all of the 200,000-plus farmworkers in the state's $10.6 billion agriculture industry, said Lori Isley, an attorney with the non-profit Columbia Legal Services who represented the dairy workers.

“Since 1983, the Washington Supreme Court has recognized that all farm work is very dangerous work, so it's very easy to see how this will extend to all farmworkers,” Isley said. “We are so happy to see the law in our state moving forward in this direction.”

The decision makes Washington the first state to grant farmworkers overtime protections through the courts. California is phasing in some overtime protections, while New York this year began requiring overtime pay when farmworkers work more than 60 hours in a week. Maryland and Minnesota also offer overtime protections to farmworkers.

The ruling could provide a template for extending overtime in other states, said Charlotte Garden, a Seattle University Law School professor who worked on a friend-of-the-court brief in the case.

“(President) Trump’s remake of the federal judiciary means that federal courts are likely to be hostile to workers for the foreseeable future,” she wrote in an instant message. “That means that in many states, workers and their advocates are going to be looking to state courts to vindicate their rights. The law in this case is obviously WA-specific, but it could still inspire new litigation strategies both inside and outside WA.”

The dissenting justices said there was no right to overtime under Washington law.

Dairies and other agriculture industry groups warned the ruling will mean vastly increased labour costs and that it could prompt more to turn to robotics, especially in the dairy industry. They can’t simply pass on higher costs to consumers because they often compete in national or global markets for their products, they argued.

Washington's farms already have some of the nation's highest labour costs, thanks in part to its high minimum wage and to the nature of the crops grown, including fruit and hops, which require intensive hand-picking.

The industry warned that applying overtime protections would leave farms with three options: limiting their harvest and leaving crops to rot, absorbing the extra labour costs, or hiring additional workers to avoid incurring overtime expenses.

The last option is untenable, since there's already a shortage of agriculture workers, the Washington State Tree Fruit Association and the Hop Growers of Washington said in a friend-of-the-court brief.

Giving the workers OT protections would also have the perverse effect of cutting workers' earnings by limiting them to 40 hours or forcing them to find additional work from a second employer — which means they'd be working longer hours without OT anyway, the organizations argued.

Dan Wood, executive director of the Washington State Dairy Federation, noted that some farms already pay $18 to $20 an hour for all hours worked — paying time-and-a-half would boost that to about $27 to $30 for hours above 40 per week.

“My phone’s been ringing off the hook,” Wood said Thursday. “You can’t operate with those costs. The political climate in Washington is far less favourable to agriculture than the natural climate.”

The court majority found the Legislature had no reasonable basis for excluding agriculture workers from the protections. The justices said agriculture work generally is dangerous, with workers exposed to diseases from animals, physical strain, and pesticides and other chemicals that can increase the risk of neurological conditions and cancer. In 2015, the injury rate for Washington’s dairy industry was nearly one-fifth higher than that of the agricultural sector.

In a concurring opinion, Justice Steven González also noted what he described as the racist origins of the overtime exemption for farmworkers. In the South, a feudal-like state replaced slavery, with Black workers continuing to toil on white-owned farms. When federal lawmakers passed major labour reforms in the 1930s, President Franklin D. Roosevelt made compromises to win the support of Southern Democrats, exempting farmworkers from such protections and preserving the racial hierarchy.

Many states, including Washington, subsequently based their labour laws on the federal Fair Labor Standards Act.

Latinos account for 99% of Washington's farmworkers.

“Excluding farmworkers from health and safety protections cannot be justified by an assertion that the agricultural industry, and society’s general welfare, depends on a caste system that is repugnant to our nation’s best self,” González wrote.

The ruling came in a 2016 lawsuit that two workers, Jose Martinez-Cuevas and Patricia Aguilar, brought on behalf of 300 workers against DeRuyter Brothers Dairy in Outlook, southeast of Yakima. The dairy's milking facilities were operated around the clock, and workers were required to stay until all cows were milked and to help clean the barn.

The dairy paid $600,000 to settle most of the claims, including that it failed to provide meal and rest breaks, but the workers' argument that they were entitled to OT had not been resolved. The dairy has been sold to another operator.

The majority did not say whether the workers would be able to collect back pay; that issue is expected to be addressed in future litigation.

Gene Johnson, The Associated Press

CONSERVATIVES CAN'T MANAGE MONEY

Alberta auditor flags $1.6B in government accounting blunders, oversight problems

EDMONTON — Alberta’s auditor general has flagged $1.6 billion worth of accounting blunders along with other oversight problems by Premier Jason Kenney’s government.

© Provided by The Canadian Press

Auditor general Doug Wylie says the mistakes are on big-ticket files including oil-by-rail contracts and the so-called energy war room.

He says the errors have been or are being corrected by the United Conservative government, but highlights the importance of adhering to accounting rules so people have an accurate picture of what's going on.

Wylie says, among other concerns, the government earlier this year listed 19 oil-by-rail contracts as sold off for accounting purposes, even though fewer than half the deals were completed.

He says that forced a $637-million adjustment.

He says the government also failed to account for falling oil prices earlier this year on its cash-flow model for the Sturgeon Refinery, forcing a $795-million adjustment to expenses.

And he says the Canadian Energy Centre, the war room created by Kenney to fight perceived misinformation on the oil industry, had not been doing proper oversight or documentation on more than $1 million in contracts.

The Canadian Press

CVS Health raises 2020 earnings guidance as plan to offer wide range of medical services pays off
Melissa Repko 

CVS Health reported a better-than-expected 3.5% jump in third-quarter revenue, as its plan to remake the drugstore chain into a health service company paid off.

The health-care company also raised its 2020 earnings guidance.

It announced that Karen Lynch will become its CEO on Feb. 1.

  

© Provided by CNBC A CVS Pharmacy store is seen in the Manhattan borough of New York City, New York.

CVS Health reported a better-than-expected 3.5% jump in third-quarter revenue and raised its 2020 earnings guidance on Friday as its plan to remake the drugstore chain into a health services company paid off.

Offering everything from insurance to Covid-19 testing, the health-care company also named a new CEO. Karen Lynch will become CEO on Feb. 1. She is currently executive vice president of CVS Health and president of Aetna, the health insurer that CVS acquired in 2018.

The company's longtime CEO Larry Merlo will step down from the role, but serve on CVS' board of directors.

Shares were up by about 5% in pre-market trading.

CVS has sought to become singular health-care destination, as competitors encroach on its turf by filling prescriptions and selling drugstore items online. The company is redesigning hundreds of its stores to turn them into a one-stop shops with medical services and products, such as blood testing and sleep apnea machines.

By end of year, Merlo said CVS will have about 600 of the HealthHUBs. It currently has nearly 450 of the stores in 30 states. Starting January, it will add in-person behavioral health services at those stores.

On an earnings call, Merlo said the addition of Covid-19 testing is "a very tangible proof point of our strategy coming to life in a very meaningful way."

"If we told you a year ago that to date 6 million people would have gone to their local CVS pharmacy for a diagnostic test related to some virus, I would probably get an eyeball roll," he said. "The reality is that's happened, and it really speaks to the strategy that we've talked about in terms of meeting people where they are."

Here's how the company reported for the quarter ended Sept. 30, compared with what analysts were expecting, based on a survey of analysts by Refinitiv:
Adjusted earnings per share: $1.66 adjusted vs. $1.33 expected
Revenue: $67.06 billion, vs. $66.66 billion expected

On an unadjusted basis, the health-care company and drugstore chain reported fiscal third-quarter net income of $1.22 billion, or 93 cents per share, down from $1.53 billion, or $1.17 per share, a year earlier.

Revenue rose 3.5% to $67.06 billion, from $64.81 billion a year prior. It also outpaced the $66.66 billion expected by analysts.

At the company's drugstores, sales rose in both the pharmacy and the front of the store as customers filled more prescriptions, got Covid-19 tests and filled up bigger baskets of items of over-the-counter items.

Prescriptions filled increased 4.6% on a 30-day equivalent basis in the quarter compared with the prior year. Front store revenues increase 2.7% in the quarter compared with the prior year.

CVS raised its full-year guidance for earnings per share to between $5.60 to $5.70 from $5.16 to $5.29 and its full-year 2020 adjusted earnings per share guidance range to $7.35 to $7.45 from $7.14 to $7.27.

It said its cash flow for the full year would range from $12.75 billion to $13.25 billion, higher than its previous outlook of between $11 billion to $11.5 billion.

The company cautioned that there was still some uncertainty because of the Covid-19 pandemic.

CVS has expanded Covid-19 testing, administered flu shots and prepared for the rollout of the coronavirus vaccine during the pandemic. It has more than 4,000 drive-thru test sites at its pharmacies and has administered more than 6 million tests. The company said it plans to have nearly 1,000 sites for rapid testing by the end of the year.

In mid-October, CVS and its rival Walgreens announced a deal with the government to administer coronavirus vaccines to the elderly and staff in long-term care facilities when they become available.

Since March, CVS has hired about 76,000 full-time, part-time and temporary employees. It has about 300,000 employees.

Last month, it said it planned to add even more workers. It said it would immediately hire 15,000 people — the majority made up of pharmacy technicians — to prepare for an expected increase in Covid-19 and flu cases this fall and winter.

CRIMINAL CAPITALI$M

Husband of former Amazon.com finance manager pleads guilty to insider trading

By Jonathan Stempel

(Reuters) - The husband of a former Amazon.com Inc finance manager who leaked confidential information about the online retailer's financial performance pleaded guilty on Thursday to an insider trading charge, the U.S. Department of Justice said.

Prosecutors said Viky Bohra, 36, of Bothell, Washington, pleaded guilty to securities fraud, admitting that from 2015 to 2018 he used tips provided by his wife Laksha to make $1.43 million of illegal profit trading Amazon stock.

Authorities said Laksha Bohra had taken advantage of her job as a senior manager in Amazon's tax department to provide the tips, despite repeated warnings against leaking confidential information.

Viky Bohra then used the tips to make successful trades ahead of Amazon earnings announcements, through accounts tied to him and his father Gotham Bohra, authorities said.

A lawyer for Viky Bohra had no immediate comment.

Under a plea agreement, prosecutors will recommend that Viky Bohra serve no more than 33 months in prison, and agreed that Laksha Bohra will not face criminal charges.

Viky Bohra faces a Feb. 8, 2021 sentencing before U.S. District Judge James Robart in Seattle, where Amazon is based.

The Bohras settled related U.S. Securities and Exchange Commission civil charges in September by agreeing to forfeit trading profits and pay a combined $1.11 million in fines.

(Reporting by Jonathan Stempel in New York; Editing by Stephen Coates)

GM pickup truck production to return to Oshawa plant with new Unifor deal

TORONTO — General Motors Corp. plans to reopen its Oshawa, Ont., assembly plant, invest up to $1.3 billion in the facility and hire up to 1,700 workers in a stunning reversal of fortune for an operation that had appeared to have fallen victim to the forces of supply chain economics.

© Provided by The Canadian Press

GM's tentative three-year deal with the Unifor union, which has not yet been approved by workers, would reopen the Oshawa assembly line to make Chevrolet Silverados and Sierras, 11 months after it was idled as part of a global restructuring plan by the automaker.

"During this process, we had numerous critics — and when I say numerous, it's a dramatic understatement — those that never thought we did enough, those who thought we should have pushed harder," said Unifor president Jerry Dias.

"We never gave up hope, and frankly, neither did General Motors."

GM Canada president Scott Bell said construction at the plant would begin immediately and would include a new body shop and flexible assembly module for the company's new line of pickup trucks.

The deal, if approved, would be an unexpected but welcome development for the plant east of Toronto, which was downsized to 300 workers last December, down from 2,600. Unifor's members are set to vote on the new tentative agreement on Sunday.

The restored plant would call back 175 laid-off workers, and Dias said it could create about 2,000 jobs after vehicle production restarts in January 2022, with a second shift in March 2022 and the work on the second vehicle beginning in May 2022. Up to 2,500 workers could be needed if a third shift is added in July 2022, Dias said at a press conference in Toronto.

Dias noted that some of the former workers at Oshawa GM have since moved on to new positions, and some of the buildings there have already been rented out or sold. About 60 workers there have been making face masks for the government.

The union and company plan to talk to settled or severed former employees as well as others in the Oshawa community as they try to find the right skill sets for the new jobs, Dias said.

In a statement, the mayor of Oshawa said the city was celebrating the proposed deal.

“General Motors has been an integral part of the Oshawa community for more than 100 years," Dan Carter said. "With today’s announcement, that legacy will continue for years to come."

The wind-down of the Oshawa plant — which opened in 1907 and was bought by General Motors in 1918 — was “devastating,” Dias said. GM said last year the plant would become a part-stamping and autonomous vehicle testing facility.

Dias said the company and union agreed in May 2019 to “pause” the production at the plant, rather than permanently halt the facilities.

“GM agreed that we'd maintain the integrity of the plant, a plant that has a world-class paint shop. But the key thing was that we maintain the ability to build vehicles in the future. And that in itself was the key piece of what we were able to accomplish in May of 2019,” Dias said.

Video: Unifor announces they've reached tentative deal with General Motors (Global News)

Several Ontario auto parts and service companies also closed after GM’s Oshawa downsizing last year. Dias said he expects many jobs to return for making “bulky” parts, such as seats, that are hard to ship from elsewhere.

Dias also said he believes GM union jobs in Woodstock and St. Catharines, Ont., are secure under the tentative three-year deal. While up to half of St. Catharines workers were on track to be laid off prior to bargaining, GM has agreed to invest $109 million there, as well as about half a million dollars in Woodstock to secure 74 jobs.

In total, Dias estimated GM could spend about $1.4 billion under the terms of the deal, which includes building transmissions for the Chevy Equinox and a new program for the Corvette.

Trucks are both popular and profitable for the company, noted Sam Fiorani, vice-president of global vehicle forecasting at AutoForecast Solutions LLC in the U.S. With GM operating its existing truck plants on an overtime schedule, Fiorani said, the investment in Oshawa makes sense to stem the overflow.

Ian Lee, associate professor at the Sprott School of Business at Carleton University, said Dias' "skilful political leadership" in cultivating ties with the federal Liberal government was one of a "remarkable convergence of events" that helped reverse the fortunes for the Oshawa plant. Lee also cited the "increased recognition that Canada is the largest GM market outside of the U.S. — and especially for light trucks."

The tentative deal with General Motors is the last agreement reached by the union with the major U.S. automakers. Earlier deals with Ford Motor and Fiat Chrysler Automobiles also included promises of billions in new investment in Canada, totalling $4.7 billion between the three companies.

Unlike the commitments from Ford and FCA, which included companion government funding for green initiatives, Dias said talks with GM in Canada this year did not focus on electric vehicle production. A statement from Minister of Innovation, Science and Industry Navdeep Bains on Thursday did not include any financial commitment to GM, although it said the government has "demonstrated that we are prepared to support the future of our auto sector."

One of many sticking points in the overnight talks was the future of the Oshawa plant, Dias said, since revamping the plant for electric vehicle production would take several years, and the union did not want to see the plant sit vacant.

“We entered into bargaining with Detroit Three in August of 2020 amid an incredible, devastating pandemic,” Dias said. “But we went into contract negotiations with the Detroit Three understanding that we needed to solidify the footprint for the auto industry here in Canada.”

GM has announced plans to produce electric vehicles at three plants in Michigan and Tennessee. CEO Mary Barra, speaking to analysts about the company's quarterly results on Thursday, said the company plans to "go hard at EVs," funded in part by gains in the North American business.

"Automakers are looking to enhance their image, as more socially and environmentally friendly," AutoForecast's Fiorani said, "and especially to change the view of stockholders who see car production as old technology and electric vehicles as cutting-edge.

"The Canadian government has stepped up ... unfortunately, this new investment will take years and won’t bear fruit until 2024 or 2025. GM’s agreement provides the investment immediately and gets people working inside the current Unifor contract."

Over the past two decades, Canadian autoworkers, and their unions, have had to compete with plants offering lower wages or taxes in Mexico and the southern U.S., presenting a challenge for Unifor heading into the 2020 negotiations.

But despite factory shutdowns this spring to limit the spread of COVID-19, and what Barra called "austerity measures," the Detroit Three automakers made strong showings in their latest financial results.

The United States-Mexico-Canada Agreement, which replaced NAFTA on July 1, included a provision that a significant percentage of the value of a car be produced by workers earning the equivalent of at least US$16 per hour, something the Canadian government said could improve Canadian automotive manufacturing's competitiveness compared to that of Mexico.

With the United States now finalizing presidential election ballot counts, Barra told analysts that the company will continue to invest in U.S. operations regardless of the outcome.

The Canadian operations will help GM meet demand for full-size pickups, Barra told analysts on the conference call.

This report by The Canadian Press was first published Nov. 5, 2020.

Anita Balakrishnan, The Canadian Press

GM to bring pickups production back to Canada


Thu, 5 November 2020

General Motors announced Thursday a deal with the Canadian auto workers' union to bring back to this country production of pickups to meet rising demand in North America.

GM said it will hire up to 1,700 workers and spend more than Can$1 billion (US$767 million) to retool the Oshawa, Ontario plant, which closed last year, to assemble its "new family of pickup trucks."

Production is expected to begin in January 2022, GM said.

"We will move very quickly," GM chief executive Mary Barra told a conference call. "We expect construction to begin on the new body shop and flexible assembly module at Oshawa immediately upon ratification.

"When the plant comes back online in early 2022, we will see a significant increase in our full-size pickup production capacity."

The tentative agreement must still be ratified by workers, but the union, Unifor, is recommending its union members do so.

GM also said it would spend Can$109 million to boost engine and transmission production at its St. Catharines, Ontario propulsion plant and its parts distribution warehouse in nearby Woodstock.

The announcement caps a round of negotiations with the big three Detroit-based automakers that secured new investments also from Ford and Fiat Chrysler to boost auto production in Canada.

Ford said it would build battery-electric vehicles in Oakville, Ontario while Fiat Chrysler pledged more than Can$1 billion to retool its Windsor, Ontario plant to make hybrid and plug-in vehicles.

GM's Oshawa plant used to make the Chevrolet Impala and the Cadillac XTS, as well as Silverado pickup trucks.

Production began in 1953 and at its peak in the 1980s, the plant employed roughly 23,000 people.

Its closure in December 2019 as part of a GM global restructuring had put out of work 2,500 Canadians.

GM to reopen Oshawa plant to make trucks, hiring up to 2,500 workers, says union

Barbara Shecter 

General Motors will invest close to $1.3 billion to reopen its storied Oshawa plant, and heavy-duty trucks will begin rolling off the assembly line by 2022, according to a tentative agreement reached in the wee hours of Thursday with its major union, Unifor.

  

© Provided by Financial Post Oshawa's GM plant was shuttered in 2018.

“We will be a complete assembly operation once again,” said Unifor president Jerry Dias.

The reopening, which follows the “devastating” announcement in 2018 that the plant would be closed, will ultimately employ between 2,000 and 2,500 people, he said.

“We never gave up hope and, frankly, neither did General Motors,” Dias said in a morning announcement of the tentative agreement. A vote on the deal will be held Sunday.

The plant will eventually make both heavy and light-duty trucks, including the Silverado and the Sierra, and is expected to have workers covering either two or three shifts.

Dias said the coronavirus pandemic has “thrown a curve” at the auto industry, but may have helped secure the agreement with GM.

“Canada has always been a loyal customer for General Motors and they know that,” he said.

The Oshawa plant was once the dominant employer in the city about a 45-minute drive east of Toronto and, though fewer people had worked there in recent years, the 2018 announcement that it would close was devastating to workers and the community, where the union estimated each GM job supported seven spinoff jobs.

Dias said Unifor negotiated agreements with Chrysler and then with GM, covering operations in Woodstock and St. Catharines, Ont., before taking on the “gorilla in the room” in Oshawa.

He said Thursday’s agreement was possible only because GM had agreed last year to maintain the “integrity of the shop,” which had been reduced to making after-market parts and employing only about 300 union members.

“GM agreed to hit the pause button,” he said, adding that the initial work at the plant will include refurbishing the existing paint shop and building a new body shop. The first shift is expected to start work in January 2022.

GM’s 2018 decision to close the Oshawa plant was particularly stinging given that the Canadian government had thrown automakers a lifeline of a few billion dollars to keep them afloat in the aftermath of the 2008 financial crisis.

Navdeep Bains, the federal minister of innovation, science, and industry, was pleased to learn of Thursday’s tentative agreement between GM and Unifor to reopen the plant, according to his senior communications adviser John Power.

“Our Government has always been at the table to support Canadian auto workers — from investing in the sector to secure tens of thousands of jobs since 2015, to negotiating the new NAFTA, to creating a policy vision toward an all-Canadian electric vehicle supply chain from mining to battery manufacturing,” Power said.

“We have demonstrated that we are prepared to support the future of our auto sector.”

John Holmes , a professor emeritus at Queen’s University who has researched the auto industry, said recent GM announcements in the United States about battery electric and hybrid vehicles investment and production could have led to the automaker needing more truck capacity.

“But that is only a surmise on my part,” he said, noting that the Oshawa plant would be available to absorb this capacity because GM had agreed last year to keep the plant footprint even though then current vehicle production was to cease in December of 2019.

The original decision to close the Oshawa plant came as a disappointment to many, but was not unexpected. Production in Canada had been on the decline from a peak of about a million units in 2007 to around a third of that. The decline was driven by trends including a shift of production to Mexico and reduced demand for automobiles, and the result was excess capacity.

Still, Dias, whose father and siblings still live in Oshawa, was adamant that he could get GM to reverse its decision to close the plant there.

“Look, we did it,” the union leader said Thursday.

He said Unifor “saved the best for last” when negotiating with GM, adding that he believes the tentative agreement, if ratified Sunday, “will solidify the footprint here in Canada for years and years to come.”

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