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GM and Oshawa: A successful but tumultuous marriage

FEATURE: The Fourth Estate

By Dave Flaherty/The Oshawa Express

Some Chinese historians subscribe to the ideology of a ‘dynastic circle.’

According to this theory, each dynasty rises to a political, cultural and economic peak and then, due to moral corruption, loses the Mandate of Heaven (a whole other ideology) and falls, only to be replaced by a new dynasty.

While this description doesn’t totally hitch with last week’s announcement that General Motors would be closing its Oshawa plant, there are some similarities.

For the past century, General Motors and Oshawa have stood hand-in-hand. Some have argued that General Motors built Oshawa, while others believe the opposite to be true. Whatever the case is, it’s up to personal perception.

But the plain reality is that the company has been an essential piece, perhaps “the” essential piece, of the city’s modern history.

From the name of the city’s OHL team to the number of GM cars that are on the road and sitting in driveways, not just across Oshawa, but the entire region of Durham, the influence of the auto giant can be seen apparently.

While the company has been clear that come the end of December 2019 its operations will end in Oshawa, a year is a long time and many things can really change during that time.

It’s obvious that a large number of people are not fully tolerant of this fate, either, but more on that later.

For now, workers in Oshawa will continue to do what they’ve done for the past 100 years, and proudly serve General Motors, because this is not the first time this type of news has come down the pike.

Past threats to the future of the auto industry in the city have come and gone with differing results.

 

The first blow

The initial 90 years or so of the GM-Oshawa relationship was one that most married couples would envy.

There were spats over that time, but generally, General Motors was the toast of the town.

Charles Konkle, who now lives in B.C., worked at the Oshawa plant between 1960 and 1975.

He says during his tenure with the company the auto industry was like an undiscovered wilderness with no limits in sight.

“It seemed like there was no end to expansion and market growth,” he recalls. “It’s like a 180-degree difference [from today] – production levels and salaries continued to grow every year.”

“It’s safe to say General Motors was Oshawa. It was almost treason to drive a Ford [in the city],” he says.

Konkle himself had a unique meeting with R.S. McLaughlin, the founder of the McLaughlin Motor Car Company, which served as the genesis for General Motors Canada.

As a youth, he delivered papers to the famed Parkwood Estate, the home of the McLaughlin family.

One day, Konkle was on the grounds collecting fees for The Oshawa Times when he was cornered by two of the family’s large Cane Corsos.

“They just kept me pinned against a wall and R.S. McLaughlin found out. He was very apologetic and asked me if I’d like to look through one of the greenhouses,” Konkle states. “He was very nice to me and I appreciated the fact that I got to talk to him and meet him.”

Konkle also remembers walking down Mary Street as a youth and being able to peak into the windows of the old factory.

He would often see children the same age as him working, helping to put food on the table of local families.

As he mentioned before, there seemed to be no end to the prosperity of General Motors.

By the end of the 1980s, the Oshawa’s plant had become the epicentre of GM’s Canadian operations, producing more than 700,000 vehicles a year and employing nearly 25,000 people.

But as the 2000s dawned, the shine on the relationship began to wear off.

In 2005, the plant which McLaughlin founded his auto business was closed, along with 11 others across North America, cutting nearly 4,000 jobs.

Only three years later, the city and workers received more shocking news when General Motors pegged Oshawa’s truck assembly plant, once a giant in the auto industry, for closure.

This happened only weeks after a tentative agreement was signed between workers and the company.

The plant closed in 2009, not long before the company itself filed for bankruptcy, facing the same fate as many during the devastating recession of the time.

The Canadian and Ontario governments sprung into action, providing nearly $14 billion in support to the company to help ensure it didn’t go under. This was in addition to more than $60 billion provided by the U.S. government for plants located in that country.

A total crisis had been averted, but it was far from the last hurdle faced over the next decade.

 

A not-so-sealed fate

One only has to look back, more than six years ago, to the June 13, 2012 edition of The Oshawa Express.

Shortly before that, General Motors Canada announced the consolidated line at the Oshawa plant would be closing within in a year mainly due to changes to the next generation of the Chevrolet Impala, which was built locally.

Then-president of CAW Local 222 Chris Buckley told The Express that more than 2,000 people would be out of work within a year.

“General Motors has told us that is going to happen. That’s their plan,” he claimed. “In one year’s time, they’re going to close the plant, putting over 2,000 workers on the street. So we’ll end up at GM Oshawa with one assembly line (the flex line) producing vehicles.”

But the fortunes of the company were looking up, not down.

In March 2012, sales were up 12 per cent in the U.S. from the previous year. In 2011, General Motors sold 2.5 million cars, a 14 per cent increase over 2010 levels, which were a 21 per cent improvement compared to 2009. It achieved market share in both 2011 and 2010.

“We expect gradual improvement in the economy going forward,” said Don Johnson, vice president of U.S. Sales Operations in a April 2012 media release. “Over time, strength in the manufacturing sector and strong retail sales will lead to more job creation. That will help more consumers put the recession behind them, gain even more confidence and drive vehicle sales higher for both the industry and GM.”

Back in 2012, as is the case today, many are quick to point out the effect of closing the GM plant in Oshawa will not just be on those working within the walls of the facility.

Local 222 president Colin James says for every one of the 2,500-plus plant workers who will be out of work, the ripple effect flows over five to seven workers in feeder businesses such as suppliers.

“It’s not just going to be hurting our community. It’s not only about the union and salaried employees,” Oshawa MP Colin Carrie said the day of the announcement. “It’s all the associated businesses and the businesses that rely on workers. This is going to send shockwaves not through only our community, but all of Ontario.”

These comments feel eerily similar to those made in 2012.

“There will be a ripple effect,” says Buckley. “There will be a ripple effect when several thousand people that rely on good-paying jobs, that live in this community, don’t have the type of income to go to a movie theatre, to go to a restaurant, to go to a car dealership and make a purchase, to maybe look at the purchase of a home. There won’t be that opportunity to put your children through one of their favourite sports because sports are expensive.”

But six years ago, Oshawa’s assembly plant was granted clemency.

In October 2013, General Motors revealed the consolidated line would remain open after an increased demand for the Chevrolet Impala and Equinox.

“By maintaining production over the next few years, we have a chance to bring in another product and keep the plant open longer,” Ron Svajlenko, then-president of Unifor Local 222, which represents workers at the plant, said in a statement.

Originally it was stated the consolidated line would stay open until 2016, but two years later in 2018, it remains active.

So history has shown when the Oshawa assembly plant has faced threats before, it is not always an automatic death sentence.

 

Today’s situation

While past occurrences can create a sense of optimism, the main difference between 2018 and 2012 is that the Impala and XTS, the cars currently built in Oshawa, have faced serious decline in market share over the past decade.

U.S. sales for the Impala have declined from 172,078 in 2010 to 75,877 in 2017, a decrease of nearly 78 per cent.

In fact, the decrease has been even more drastic over the second half of the 2010s, with U.S sales dropping nearly 60 per cent between 2014 and 2017.

The Impala has been a consistent presence in Oshawa, with the model being produced here between 1965 and 1985, and since 2000. But after this year’s model, it will be discontinued.

The XTS has also seen a loss of shares, albeit more gradual.

Sales have declined from about 33,000 in 2013 to 16,000 last year.

David Paterson, vice-president of corporate and environmental affairs for GM Canada, says the decision to close the Oshawa plant strictly comes down to the fact the company [at this point] has no products to reallocate locally.

During a media conference where the closure was confirmed, GM CEO Mary Barra pointed out the current market is shifting away from cars.

“GM has recently invested in newer, highly-efficient vehicle architectures, especially in trucks, crossovers, and SUVs…as the current vehicle portfolio is optimized, it is expected that more than 75 per cent of GM’s global sales volume will come from five vehicle architectures by early next decade,” a press statement reads.

Resources allocated to electric and autonomous vehicles programs will also double over the next two years.

In other words, vehicles such as the XTS and Impala, once the bread and butter vehicles of the Oshawa plant, have fallen by the wayside due to technology and customers wanting bigger vehicles.

 

What’s next

Local politicians and Unifor Local 222 have stated they will do whatever it takes to fight General Motors’ plans.

Carrie said he doesn’t believe in the concept of false hope, and pointed to previous cases of when it seemed the plant was doomed.

Oshawa MPP Jennifer French says “Oshawa is tough” and this is definitely a battle worth taking on.

However, some workers who have spoken with the media seem less optimistic than others.

In the long-term, Carrie has brought forth a motion for the country’s International Trade Committee to study the future of the auto industry in Canada.

The provincial NDP have called on the province to develop a long-term plan for the auto industry and other manufacturing sectors facing such closures in the future.

While the impact General Motors has on Oshawa is a shell of what it once was, history has proven that when it appears the flame will be extinguished, it can be reignited, if only temporarily.

The next year may prove to be perhaps the most crucial in the history of this longstanding and complicated relationship.

 

BEHIND THE WRITING

As someone who did not grow up in Oshawa, I have no real affinity for General Motors.

I once drove a 1992 Cutlass, and that’s about as close a relationship I’ve had with the company.

But going to college here and now working here, I have an understanding of the impact General Motors has had on this city.

So when the news broke recently that the Oshawa assembly plant would be closing at the end of 2019 I understood the impact of that as well.

As someone who has worked at a business that was shut down (albeit on a much smaller scale), I could also understand the frustration and sadness on the faces of the workers as they departed from the plant early on the morning of Monday, Nov. 26.

My initial thoughts were, the writing has been on the wall for some time. And in many ways, I still stick to that belief.

However, with time, I’ve had an opportunity to reflect and regardless of my position that this wasn’t a huge surprise, I can appreciate that it hurts.

It hurts not only the workers in the plant but also many families and businesses across the city and the region.

I can, perhaps due to my lack of personal connection, also understand General Motors decision. Business is business, but for some, this is a personal situation.

However, looking at past instances, I do understand why many people are willing to fight and are not giving up hope.

There have been several times before when it looked like this plant was going to go down in history, and that has not been the case.

A year is a long time, and many things could change over the next 360-plus days, and for the sake of the workers, I hope it does.

I hope the legacy of General Motors will continue on in the city.

But if it doesn’t, it is time, more now than ever with the holidays coming up, for us to all stand together and make the best of whatever comes our way.

It’s often said when one door closes, another one opens. It may take some time before that next door opens but it will come eventually.