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By Thomas WalkomNational Affairs Columnist
Tues., Nov. 27, 2018
General Motors’ decision to close its Oshawa plant is treated by the federal and Ontario governments as irreversible — as the inevitable result of global market forces. It is neither.
Rather it is a self-serving decision made by a multinational adept in navigating the areas where politics and economics intersect. In making it, GM has taken advantage of Prime Minister Justin Trudeau’s fascination with high technology and Ontario Premier Doug Ford’s laissez-faire approach to industrial policy.
Rather it is a self-serving decision made by a multinational adept in navigating the areas where politics and economics intersect. In making it, GM has taken advantage of Prime Minister Justin Trudeau’s fascination with high technology and Ontario Premier Doug Ford’s laissez-faire approach to industrial policy.
/https://www.thestar.com/content/dam/thestar/opinion/star-columnists/2018/11/27/trump-fights-while-trudeau-and-ford-roll-over-on-gm-plant-closure/afp_1b480z.jpg)
True, there is an important economic element behind the automaker’s plan to close eight plants worldwide. Consumers no longer buy many of the cars GM makes, including the Chevrolet Impala sedan manufactured in Oshawa.
Nor are they buying the hybrid Chevy Volt, once touted by GM as the car of the future. The Detroit plant that makes the Volt is one of the eight due to be shuttered.
Rather, consumers are buying gas-guzzling SUVs and pickup trucks — including the Silverado and Sierra models assembled in Oshawa.
Nor are they buying the hybrid Chevy Volt, once touted by GM as the car of the future. The Detroit plant that makes the Volt is one of the eight due to be shuttered.
Rather, consumers are buying gas-guzzling SUVs and pickup trucks — including the Silverado and Sierra models assembled in Oshawa.
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They are doing so in part because oil prices are low. But they are also expressing a stubborn preference for big vehicles, no matter how politically incorrect.
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So when GM says it wants to focus on developing electric and self-driving autos, it isn’t being entirely straightforward.
What the company really wants to do is shift production from vehicles that people don’t buy — including electric hybrids like the Volt — to those they do buy, such as pickup trucks.
What the company really wants to do is shift production from vehicles that people don’t buy — including electric hybrids like the Volt — to those they do buy, such as pickup trucks.
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GM would be pleased if, along the way, its engineers happened to develop a revolutionary electric car. But until that day arrives, it will concentrate on the more mundane task of making as much money as possible.
In a nutshell, this is the economics behind GM’s Monday announcement that it will close four plants in the U.S. and three overseas as well as Oshawa.
The politics of the decision has to do with where GM will manufacture those models it still plans to produce.
Its preference is to assemble them in low-wage countries like Mexico. But like all car companies it is willing to be enticed by government subsidies and is susceptible to pressure from government threats.
In strict efficiency terms, it would make sense for GM to shift the production of profitable models to its Oshawa plant. Oshawa’s flexible assembly line can handle both cars and trucks. Oshawa already performs the final assembly stage of two profitable pickup models. GM itself says the Oshawa workforce is one of the most productive in its stable.
But in the real world of politics, GM knows it wouldn’t get away with keeping a Canadian plant open when it was shutting down four U.S. operations. Donald Trump wouldn’t let it happen.
Indeed, the U.S. president has already signalled that he expects GM to backtrack on at least one plant closure in Ohio. If the company can’t make money selling the compact cars manufactured there now, he warned Monday, then “They’d better put something else in.”
What can Trump do? He’s already shown he can use tariffs with devastating effect. I’m sure he’d think of some way to punish GM if it didn’t comply.
But the importance of the Trump threat is that he’s not taken in by arguments of economic inevitability. He knows that when it comes to the auto industry, nothing is written in stone.
By contrast, Canada’s federal and Ontario governments have convinced themselves that nothing can be done. The Trudeau Liberals are so focused on high-tech jobs of the future that they too often — as in this case — forget the needs of the present.
Trudeau, who has spent some time cultivating GM head Mary Barra, appears to have accepted her claim that the Oshawa decision is irreversible.
Ford, for different reasons, has taken the same tack. He blames the planned federal carbon tax in part for GM’s decision, yet insists that nothing can be done to change it.
Both Canadian leaders fail to see what Trump instinctively understands: This is the auto industry we’re talking about; nothing is immutable.
Thomas Walkom is a Toronto-based columnist covering politics. Follow him on Twitter: @tomwalkom
In a nutshell, this is the economics behind GM’s Monday announcement that it will close four plants in the U.S. and three overseas as well as Oshawa.
The politics of the decision has to do with where GM will manufacture those models it still plans to produce.
Its preference is to assemble them in low-wage countries like Mexico. But like all car companies it is willing to be enticed by government subsidies and is susceptible to pressure from government threats.
In strict efficiency terms, it would make sense for GM to shift the production of profitable models to its Oshawa plant. Oshawa’s flexible assembly line can handle both cars and trucks. Oshawa already performs the final assembly stage of two profitable pickup models. GM itself says the Oshawa workforce is one of the most productive in its stable.
But in the real world of politics, GM knows it wouldn’t get away with keeping a Canadian plant open when it was shutting down four U.S. operations. Donald Trump wouldn’t let it happen.
Indeed, the U.S. president has already signalled that he expects GM to backtrack on at least one plant closure in Ohio. If the company can’t make money selling the compact cars manufactured there now, he warned Monday, then “They’d better put something else in.”
What can Trump do? He’s already shown he can use tariffs with devastating effect. I’m sure he’d think of some way to punish GM if it didn’t comply.
But the importance of the Trump threat is that he’s not taken in by arguments of economic inevitability. He knows that when it comes to the auto industry, nothing is written in stone.
By contrast, Canada’s federal and Ontario governments have convinced themselves that nothing can be done. The Trudeau Liberals are so focused on high-tech jobs of the future that they too often — as in this case — forget the needs of the present.
Trudeau, who has spent some time cultivating GM head Mary Barra, appears to have accepted her claim that the Oshawa decision is irreversible.
Ford, for different reasons, has taken the same tack. He blames the planned federal carbon tax in part for GM’s decision, yet insists that nothing can be done to change it.
Both Canadian leaders fail to see what Trump instinctively understands: This is the auto industry we’re talking about; nothing is immutable.
Thomas Walkom is a Toronto-based columnist covering politics. Follow him on Twitter: @tomwalkom
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Canada and United States urged to work together to fight General Motors
Tues., Nov. 27, 2018
OTTAWA—A defiant union leader is urging Prime Minister Justin Trudeau and U.S. President Donald Trump to work together on an “aggressive” strategy to force General Motors to reverse plans to cease production in Oshawa and four other plants in the United States.
Jerry Dias, the national president of Unifor which represents some 2,500 workers at the Oshawa plant, called for punishing tariffs on General Motors vehicles produced in Mexico and labour action in both Canada and the U.S. to get the company’s attention.
Jerry Dias, the national president of Unifor which represents some 2,500 workers at the Oshawa plant, called for punishing tariffs on General Motors vehicles produced in Mexico and labour action in both Canada and the U.S. to get the company’s attention.
/https://www.thestar.com/content/dam/thestar/politics/federal/2018/11/27/canada-and-united-states-urged-to-work-together-to-fight-general-motors/trudeau_and_dias.jpg)
“We’re playing with a corporation that plays by its own rules,” Dias told reporters on Parliament Hill.
“If you’re going to have a company that’s going to show us their middle finger, then I think our governments should show them their middle finger as well,” he said.
Dias warned that the stakes are high. General Motors has already moved production of five vehicles out of Canada — four of those to Mexico — and closure of the Oshawa plant will only leave one GM vehicle produced here, he said.
“If you’re going to have a company that’s going to show us their middle finger, then I think our governments should show them their middle finger as well,” he said.
Dias warned that the stakes are high. General Motors has already moved production of five vehicles out of Canada — four of those to Mexico — and closure of the Oshawa plant will only leave one GM vehicle produced here, he said.
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“GM is on the cusp of complete disinvestment in Canada and will lead to a catastrophic end to Canada’s most lucrative export industry,” he said.
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“We are not going to let our plant close. Our plant in Oshawa is not closing and we will do whatever it takes to make sure our plant in Oshawa doesn’t close,” said Dias, who will be in the U.S. Wednesday for meetings with his counterparts with the United Auto Workers.
General Motors announced on Monday that it intended to halt production in Oshawa and four facilities in the U.S. by the end of 2019 as part of a transformation to refocus its line-up on crossovers, SUVs and trucks and zero emissions vehicles.
General Motors announced on Monday that it intended to halt production in Oshawa and four facilities in the U.S. by the end of 2019 as part of a transformation to refocus its line-up on crossovers, SUVs and trucks and zero emissions vehicles.
Article Continued Below
News of the plant closures rippled in Washington and Ottawa Tuesday. Trump took a hard line, saying he was “very disappointed” that plants were closing in Ohio, Michigan and Maryland and vowed possible reprisals.
“Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including for electric cars,” Trump said on Twitter.
“General Motors made a big China bet years ago when they built plants there (and in Mexico) — don’t think that bet is going to pay off. I am here to protect America’s Workers!” the president said.
Trump and Trudeau spoke Tuesday about the plant closings, expressing disappointment at the decision and “underscored their concerns for the workers, families, and communities affected,” according to a read-out of the conversation provided by the Prime Minister’s Office.
The Prime Minister’s Office gave no hint whether the federal government intended to work with the U.S. administration on the issue.
But Dias emerged from a lengthy meeting with Trudeau Tuesday expressing optimism that the prime minister doesn’t see the Oshawa closure as a “fait accompli.”
“He’s certainly going to do whatever he can to get their attention. If that means that we have a joint strategy with the United States, I would welcome that,” Dias said.
Also present at that meeting were Katie Telford, Trudeau’s chief of staff, Navdeep Bains, the minister of innovation, science and economic development, and Patty Hajdu, minister of employment, workforce development and labour.
Dias said he told the prime minister that if GM refuses to reverse course, Canada and the U.S. should look at “significant tariffs” on GM vehicles made in Mexico “to get their attention.”
“It’s clear that General Motors would prefer to build cars in Mexico and ship them to the United States and Canada,” Dias said.
Dias said that Trudeau and Trump “both share a similar concern.”
“Job loss was announced in Canada and the United States and of course there was no impact on anybody in Mexico or any assembly plants,” Dias said.
A spokesperson for Trudeau would not say whether the prime minister supported Dias’ call for tariffs.
United States, Canada and Mexico just completed negotiations for a new North American trade pact, due to be signed later this week, that includes provisions to stem the flow of auto jobs to Mexico but they won’t take effect for several years.
Dias said he spoke with GM executives on Monday and got no indication they would be open to government proposals to keep the plant operating.
But Dias said the Oshawa plant is one of GM’s best with a top paint shop and known for its quality work. He said it could easily produce the vehicles now made in Mexican plants and any of the new designs that GM says it wants to focus on.
“We can build them all. We have a flexible platform in Oshawa that can build every vehicle that GM makes,” he said.
And he suggested that it would not take much government funding to keep the plant running. “This isn’t a situation where they’re going to have to pony up billions of dollars in order to get things rolling. The infrastructure is all there. All we need is the political will,” he said.
General Motors spokesperson could not be reached for comment. However, David Paterson told Canadian Press that the company does not intend to abandon its Canadian operations and indeed noted that it’s hiring 500 people for its technical centre in Markham.
“We sell in Canada, we manufacture in Canada, and we’re actually the biggest and fastest-growing new technology automotive company in Canada, Paterson, the company’s vice president of corporate and environmental affairs told the wire service.
At Queen’s Park, Ontario Economic Development Minister Todd Smith accused opposition parties of giving GM workers a “false sense of hope” by pushing to keep assembly lines rolling in Oshawa.
“They’re dug in on this,” he said of General Motors, citing a conversation with the auto giant’s Detroit-based chief executive Mary Barra.
Addressing concerns that rival automakers Ford, Chrysler, Honda and Toyota could pull vehicle production from Ontario in the coming years as the industry transitions to electric and autonomous vehicles, Smith said “we want to work with those companies” but noted the government’s business support programs are under review to ensure taxpayers are getting “bang for our buck.”
“While we don’t have buckets of money to be handing them (auto companies) to keep them in Ontario, we can make it easier for them to do business in Ontario. We’re going to reduce regulation where we can,” he added.
“They have their business plans, they have their vehicle allocations and so far, from the conversations that we’ve had, we feel confident that the other four are going to live up to those commitments that they’ve made to Ontario.”
NDP Leader Andrea Horwath said Smith’s comments about an uncertain future for business support programs sends the “wrong message” to the auto industry as it contemplates the best location for future production.
“We don’t to be sending signals that we’re not interested, that we’re not prepared to invest, that we don’t believe in technologies of the future.”
It makes no sense that GM, with engineering and high-tech research sites in Oshawa and Markham aimed at developing next-generation vehicles and beyond, does not have Ontario on its radar as a production site, said Green Leader Mike Schreiner, the MPP for Guelph.
“Ontario should be leading the electric vehicle revolution, not losing jobs to it. That’s what’s happening as this government has no auto strategy.”
Bruce Campion-Smith is an Ottawa-based reporter covering national politics. Follow him on Twitter: @yowflier
Rob Ferguson is a Toronto-based reporter covering Ontario politics. Follow him on Twitter: @robferguson1
“Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including for electric cars,” Trump said on Twitter.
“General Motors made a big China bet years ago when they built plants there (and in Mexico) — don’t think that bet is going to pay off. I am here to protect America’s Workers!” the president said.
Trump and Trudeau spoke Tuesday about the plant closings, expressing disappointment at the decision and “underscored their concerns for the workers, families, and communities affected,” according to a read-out of the conversation provided by the Prime Minister’s Office.
The Prime Minister’s Office gave no hint whether the federal government intended to work with the U.S. administration on the issue.
But Dias emerged from a lengthy meeting with Trudeau Tuesday expressing optimism that the prime minister doesn’t see the Oshawa closure as a “fait accompli.”
“He’s certainly going to do whatever he can to get their attention. If that means that we have a joint strategy with the United States, I would welcome that,” Dias said.
Also present at that meeting were Katie Telford, Trudeau’s chief of staff, Navdeep Bains, the minister of innovation, science and economic development, and Patty Hajdu, minister of employment, workforce development and labour.
Dias said he told the prime minister that if GM refuses to reverse course, Canada and the U.S. should look at “significant tariffs” on GM vehicles made in Mexico “to get their attention.”
“It’s clear that General Motors would prefer to build cars in Mexico and ship them to the United States and Canada,” Dias said.
Dias said that Trudeau and Trump “both share a similar concern.”
“Job loss was announced in Canada and the United States and of course there was no impact on anybody in Mexico or any assembly plants,” Dias said.
A spokesperson for Trudeau would not say whether the prime minister supported Dias’ call for tariffs.
United States, Canada and Mexico just completed negotiations for a new North American trade pact, due to be signed later this week, that includes provisions to stem the flow of auto jobs to Mexico but they won’t take effect for several years.
Dias said he spoke with GM executives on Monday and got no indication they would be open to government proposals to keep the plant operating.
But Dias said the Oshawa plant is one of GM’s best with a top paint shop and known for its quality work. He said it could easily produce the vehicles now made in Mexican plants and any of the new designs that GM says it wants to focus on.
“We can build them all. We have a flexible platform in Oshawa that can build every vehicle that GM makes,” he said.
And he suggested that it would not take much government funding to keep the plant running. “This isn’t a situation where they’re going to have to pony up billions of dollars in order to get things rolling. The infrastructure is all there. All we need is the political will,” he said.
General Motors spokesperson could not be reached for comment. However, David Paterson told Canadian Press that the company does not intend to abandon its Canadian operations and indeed noted that it’s hiring 500 people for its technical centre in Markham.
“We sell in Canada, we manufacture in Canada, and we’re actually the biggest and fastest-growing new technology automotive company in Canada, Paterson, the company’s vice president of corporate and environmental affairs told the wire service.
At Queen’s Park, Ontario Economic Development Minister Todd Smith accused opposition parties of giving GM workers a “false sense of hope” by pushing to keep assembly lines rolling in Oshawa.
“They’re dug in on this,” he said of General Motors, citing a conversation with the auto giant’s Detroit-based chief executive Mary Barra.
Addressing concerns that rival automakers Ford, Chrysler, Honda and Toyota could pull vehicle production from Ontario in the coming years as the industry transitions to electric and autonomous vehicles, Smith said “we want to work with those companies” but noted the government’s business support programs are under review to ensure taxpayers are getting “bang for our buck.”
“While we don’t have buckets of money to be handing them (auto companies) to keep them in Ontario, we can make it easier for them to do business in Ontario. We’re going to reduce regulation where we can,” he added.
“They have their business plans, they have their vehicle allocations and so far, from the conversations that we’ve had, we feel confident that the other four are going to live up to those commitments that they’ve made to Ontario.”
NDP Leader Andrea Horwath said Smith’s comments about an uncertain future for business support programs sends the “wrong message” to the auto industry as it contemplates the best location for future production.
“We don’t to be sending signals that we’re not interested, that we’re not prepared to invest, that we don’t believe in technologies of the future.”
It makes no sense that GM, with engineering and high-tech research sites in Oshawa and Markham aimed at developing next-generation vehicles and beyond, does not have Ontario on its radar as a production site, said Green Leader Mike Schreiner, the MPP for Guelph.
“Ontario should be leading the electric vehicle revolution, not losing jobs to it. That’s what’s happening as this government has no auto strategy.”
Bruce Campion-Smith is an Ottawa-based reporter covering national politics. Follow him on Twitter: @yowflier
Rob Ferguson is a Toronto-based reporter covering Ontario politics. Follow him on Twitter: @robferguson1
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