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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