General Motors’ plan to shut its assembly plant in Oshawa, Ont., putting 2,800 people out of work, amounts to a breach of the automaker’s contract with its employees, the president of Unifor alleged Monday.
“We have a collective agreement that says they’re not closing any of our facilities … so we will do anything by any means to make sure that they live up to their word,” Jerry Dias said at a press conference in a packed union hall.
“They are not closing our damn plant without one hell of a fight.”
According to Dias, the contract negotiatied between Unifor and the company in 2016 spelled out that GM would not close any of its manufacturing plants in Canada during the contract period, which runs until September 2020.
GM said Monday that it has no plans to manufacture vehicles in Oshawa past the end of 2019. It announced similar fates for three factories in Michigan and one in Ohio, and said it would also close two unspecified facilities outside North America.
The company said the changes were the results of shifts in consumer demand, with SUV and pickup truck sales increasing while sedan sales stall.
“We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success,” GM CEO Mary Barra said in a press release.
In addition, GM plans to cut its non-union staffing levels by 15 per cent, including a 25 per cent reduction in the executive ranks, and double its spending on electric and autonomous vehicles within the next two years.
Overall, the company expects these measures to save it approximately $6 billion per year in expenses. The automaker’s other Canadian facilities – in St. Catharines, Ont. and Ingersoll, Ont. – are not affected by the announcement.
Dias said the plan laid out by GM includes significant new manufacturing in Mexico. He said the two countries produced roughly the same number of GM vehicles five years ago, while more than four times as many vehicles will come out of Mexican plants as Canadian ones by 2023.
“I don’t know how General Motors expects that Canadians are going to continue to support them … when they clearly have no intention of treating us as a nation and as workers with any respect,” he said.
Dias said he had spoken to Ontario Premier Doug Ford about the closure announcement and would be meeting with the federal government on Tuesday. He said Canadians should expect to see a “very aggressive” campaign against the closure launch soon.
“We’re going to have to use all of the power of government to make sure that General Motors understands that they’re not betraying this country again,” he said.
Later this week, Dias will meet with leadership from the United Automobile Workers union in the U.S.
Unifor instructed its members to leave the plant Monday morning rather than wait to hear GM’s planned internal announcement.
“You’ve got to take a stand at one point, so that’s what we’re doing,” one woman said as she made her exit. Everyone would return to work on Tuesday, the union said.
Despite workers’ optimism that a solution could be found to keep the plant in operation, as has happened several times in the past, Ford said he’d been told by GM that the company would not rethink its decision.
“They’re gone; they’re done. They told me straight up there’s nothing we can do,” he said.
The federal government lent GM $10.8 billion in 2009, to help keep the company afloat as it stared down insolvency. A condition of that loan was that GM would not reduce its manufacturing operations in Canada for six years.
Shares in General Motors traded at their highest level in several months following the announcement, at one point reaching US$38.75 in New York.
The full closure of the Oshawa plant will leave 2,500 unionized workers and 300 salaried employees out of work, with indirect effects rippling across the southern Ontario auto industry and beyond.
GM announced last month that it was offering buyouts to approximately 18,000 of its 50,000 salaried employees in North America. It said the buyouts, which were announced on the same day the company reported a $2.5-billion profit, were due to expected future financial challenges brought on by declining sales and U.S.-imposed tariffs on steel and aluminum.
The company has promised to reduce its structural costs by $6.5 billion per year by the end of 2018, and said in October that it was close to delivering on that pledge.
As of July, GM had five factories in the U.S. operating significantly below capacity. Two of those five were among the plants earmarked for closure in Monday’s announcement.
GM production in Oshawa began in 1953 and peaked in the 1980s, when the company employed 23,000 people in the city.
With files from The Canadian Press
