Toronto’s Globe and Mail is reporting that General Motors Co. today informed the Canadian Auto Workers union that it was going to close the Oshawa 2 assembly plant next June. About 2,000 workers stand to lose their jobs.
“This is absolutely sickening,” said Chris Buckley, president of CAW local 222, which represents workers at the two GM car plants in Oshawa. Local 222 is Canada’s largest private sector union local.
The Oshawa 2 plant, which builds the Chevrolet Impala and Equinox, is part of the larger Oshawa Auto Complex. was originally scheduled to close in 2008, part of a GM restructuring plan set out in 2005. The CAW persuaded GM to keep the plant open for an additional five years.
GM will shift Impala production to its Hamtramck plant in Michigan and Equinox production to the Spring Hill plant in Tennessee.
It is possible that GM will send some Impala production to the neighboring flexible assembly plant that also produces the Chevrolet Camaro, Buick Regal and Cadillac XTS. This means perhaps a quarter of the workers who will be cut when Oshawa 2 closes might be able to transfer. However, that would require the addition of a third shift and GM won’t commit to a third shift yet.
The Equinox production is going to the Spring Hill plant because the United Auto Workers agreed to allow the company to hire a large number of workers at Tier II wages of about $16 per hour with limited benefits. That compares with about CDN$32 (about US$30.79) in hourly wages in Oshawa.
Because of differences in the relative values of U.S. and Canadian currency, it used to be less expensive for GM to assemble vehicles in Canada, but shifts in the exchange rates have made Canadian labor more costly.
The CAW calls such wage-cutting a race to the bottom and has stood fast against wage reductions. Buckley says if the CAW agreed to such cuts, it would soon be asked to match the $6 an hour paid to GM workers in Mexico.