Alberta Politics
One of the new GM plants in Oshawa in the boom years of auto manufacturing in that city (Photo: General Motors of Canada).

Alberta politicians need to tread carefully when they comment on the coming job losses at GM Canada in Oshawa

Posted on November 26, 2018, 1:23 am
8 mins

We don’t yet know why General Motors Corp. has decided to walk away from its last auto-assembly plant in Oshawa, Ont., which CTV reported last night the Detroit-based company will announce it is doing at 10 o’clock this morning.

I’m sure there will be plenty of suspects. I have one of my own: Donald J. Trump.

Parkwood, the home of Sam McLaughlin, founder of the McLaughlin Motor Co., later GM Canada (Photo: David J. Climenhaga).

But I have some advice for politicians and ordinary citizens here in Alberta, who have been in the midst of an epic, nation-shaking tantrum about our province’s insistence we must have a pipeline to “tidewater,” and have it now.

Be very, very careful about acting as if this is no big deal. It’s a big deal – although not as big a deal as it once would have been because GM has been scaling back its Canadian operations for a long time.

When GM closes its final plant in Oshawa, a company that at the start of the 21st Century operated half a dozen auto assembly plants in Canada will have only one. That’s CAMI Automotive in Ingersoll, Ont., which bolts together Chevrolet Equinox and GMC Terrain small SUVs from a basket of components cobbled together all over the world.

“The Motors,” as its known in the industry, also still has a transmission plant in St. Catharine’s. But that will be it.

In its heyday, GM employed about 40,000 people in Canada. Now that number is just over 8,000, and is set to fall by nearly half.

So when the dust settles, General Motors of Canada Co. will not be much more than the Canadian retail-marketing arm of what was once the undisputed largest automotive manufacturing corporation in the world. GM is now No. 4 by production, after Toyota Motor Corp. of Japan, Volkswagen Group of Germany, and Hyundai Motor Group of South Korea.

Typical GM workers’ homes in Oshawa (Photo: David J. Climenhaga).

Canadians have been manufacturing wheeled conveyances in Oshawa, 60 kilometres east of Toronto along the north shore of Lake Ontario, since 1876. Sam McLaughlin founded the McLaughlin Motor Car Co. there in 1907, and it and Mr. McLaughlin alike became part of GM in 1918. (He became a vice-president of the parent company, and as rich as stink.)

Assembly plant jobs are considered to be among the best jobs in the auto industry, bringing with them as they do a middle-class salary and, historically, a certain amount of job security.

So, yes, this is a big deal.

Albertans need to be even more careful about acting as if this is just an inevitable and healthy functioning of the market and that governments, especially the one in Ottawa, ought not to be “picking winners and losers” in places like Oshawa. Not, at least, unless they’re prepared also to say they think the federal government shouldn’t intervene to push the Trans Mountain Pipeline Expansion through to the West Coast on the strength of a questionable business case.

And for heaven’s sake, Albertans shouldn’t argue that the loss of 3,000 direct jobs and heaven knows how many indirect ones in one city of 160,000 souls is just a market functioning as it should, but our Bitumen Bubble is a “market failure.” Ditto, it would be undiplomatic to compare job loss numbers, which may be larger in Alberta, but are unlikely to be much impacted by pipeline building. This would not only be crass, it would be stupid.

Former GM President Roger Smith (Photo: General Motors Corp.).

Worst of all, of course, would be to crow about it as if Central Canada in general and Oshawa in particular deserve the hit because we’re put out about something else.

Count on it, there will be people in Oshawa who will say fairness demands Ottawa should intervene to ensure the plant continues to operate, and given the economics of the Trans Mountain Expansion Project and the political capital Prime Minister Justin Trudeau has expended on it, they will have an argument.

Mark my words, though, some Albertans will not be able to resist temptation, and no good will come of it.

Another thing we can count on – mea culpa – is that commentators will look for someone to blame. Conservatives will soon be blaming Mr. Trudeau, of course. New Democrats and Liberals in Ontario will blame Premier Doug Ford – this is a stretch too, given the timing, but he will have to wear bad things that happen on his watch just as Alberta’s NDP has had to wear low world oil prices because that’s the way things work in politics.

Already on social media I have seen some of the usual suspects from “non-partisan” conservative Astro-Turf groups blaming the Oshawa autoworkers’ union, Unifor.

This is big stretch, because as long as the Canadian Loonie trades at a discount to the Greenback, Canada is an excellent place to build cars. It has a well-educated workforce, a structural advantage built into the currency, and public health care, a huge money saver for corporations in an industry where unions are commonplace. These factors mean that cars have usually cost less to make in Canada than the U.S. despite slightly higher per-hour wages.

That’s part of the story of why big Japanese automakers have opened and expanded assembly plants here in Canada – including CAMI, which stared out in 1986 as a joint venture of GM and Suzuki Motor Corp. And it’s why Roger Smith, President of GM from 1981 to 1990, invested $90 billion US around the world to modernize the company, and put significant amounts of it into the complex of new plants in Oshawa.

But Mr. Trump, whom it would be fair to describe as an enemy of Canada, has changed all that.

The U.S.-Mexico-Canada Agreement signed at the end of September may just be NAFTA 2.0, but the folks on the executive floors of GM Headquarters in the Renaissance Centre in Detroit can read the handwriting on the wall just as well as we can.

So watch your step if you’re an Albertan who thinks it’s cool to wear a MAGA cap and show your affection for Mr. Trump. If you get noticed, you won’t be doing Alberta any favours.

17 Comments to: Alberta politicians need to tread carefully when they comment on the coming job losses at GM Canada in Oshawa

  1. Sara-Anne Peterson

    November 26th, 2018

    Sure would like to see private schools go unsubsidized. I went to a one room school in the wilds of Alberta in the 40s and they were in their own way, a miracle. Yeah for public schools. They should have all the funds.

    Anyway, Google is building a 600 million euro data center in Denmark because Denmark has abundant renewable energy. And China is now the largest renewable energy investor, and will spend 360 billion on clean energy by 2020 and create maybe 13 million jobs. Time

    Is it perhaps that Mr. Trudeau took the wrong path? I’ve thought so all along.

    Reply
    • Farmer Brian

      November 26th, 2018

      According to the International Energy Agency solar power accounted for 2% of the world’s electricity output and wind energy accounted for 4% in 2017. Now do I think this will increase over time, I am sure it will. Keep in mind that there is no manufacturing in Canada of any amount of solar panels and wind turbines. All these components will have to be imported. Will there be lots of installation jobs, certainly. But they are intermittent sources of power and require a base load back up of hydro or natural gas or nuclear. I don’t personally believe they are the future economic panacea that everyone promotes. For me as a farmer present day technology presents very few opportunities for me to grow my crops without the use of fossil fuels, it is just reality. It would be nice if Oshawa’s jobs were replaced with jobs building solar panels or wind turbines or for that matter building electric cars but at present that doesn’t look realistic because the cost of production in Canada is to high. Just my opinion, enjoy your day.

      Reply
      • Expat Albertan

        November 27th, 2018

        You seem to have inadvertently supported the primacy of renewable energy in your post when you said you grow crops. They are the penultimate source of energy for us humans and they use the intermittent energy called the sun. Granted we use fossil fuels to scale up the harvest, but the sun is the ultimate source of that energy and without it, all the oil in the world wouldn’t help you grow anything.

        Btw, 4% is huge when you consider how much energy we use. Cheers.

        Reply
  2. Rod Feland

    November 26th, 2018

    Good post David. It pretty much unpacks all the complexity of the political landscape, which is powerless to stop the effects of rampant globalization. Governments and nations are no longer in control, unless you mean “damage control”.

    Reply
    • Kang

      November 26th, 2018

      Governments are certainly not powerless in the age of globalization. They simply choose not to use their power, most notably the power to regulate commerce. Remember the auto-pact was built on the Canadian Government regulation that for every car a company sold to Canadians, it was required to assemble a certain number in Canada? This is effectively what Trump has decreed to US car makers. Canada needs to do the same. No assembly, no sales to Canadians.

      Reply
      • Jerrymacgp

        November 30th, 2018

        I have for a long time advocated a trade policy that applies the Auto Pact idea to the entire economy: tell foreign manufacturers and producers—of everything—that if they want to sell to Canadians, they must buy from Canadians and employ Canadians. But no party in Canada, not even the NDP, is currently talking about a different approach to trade than the one we have now, which is so-called “free trade agreements” with all and sundry.

        It seems the Overton window on trade has shifted significantly from where it sat in the late 1980s, when a federal election was fought largely on the original Canada-US Free Trade Agreement. In my view, it’s no coincidence that the first food banks in Canada opened shortly after the CUSFTA was signed. Sad, really.

        Reply
  3. Brett

    November 26th, 2018

    It is no secret that we have been moving into the ‘new economy’ for years. One has to be blind not to see that we continue to manufacture far more with less people. One has to be blind not to notice the job opportunities that now exist that were not even thought of a few years ago. Anything from environment consulting through to robotics, internet security and ethical hacking. Not just on the applied side, also in R&D and in the university environment. Same situation in heath care.

    Governments of all stripes, all levels have been ignoring this. Other that just before election time when they are held hostage and shovel a bunch money into industry to ‘save’ jobs.

    It would be oh so refreshing to see even one Governement, of any stripe, come out and say we need to shovel move money into education at all levels in order to prepare our folks for this new economy. And to provide more funding to universities and research institutes. Plus tax breaks, enhanced write offs for firms in the forefront of new technology development and implementation. Handing out money to sunset industries is a mugs game.

    Reply
  4. Jonathan Culp

    November 26th, 2018

    Since you raised the issue of professional editing standards yesterday…it’s spelled St. Catharines 😉 Love your work.

    Reply
    • David Climenhaga

      November 26th, 2018

      Thank you Jonathan. I knew that. I just forgot it momentarily. It’s been corrected. My excuse is I have to rely on my readers for editing services. I wonder what Postmedia’s is? DJC

      Reply
  5. Albertan

    November 26th, 2018

    Another thing re: the USA, is their deepwater port, LOOP (Louisiana Offshore Oil Port) which can accommodate VLCC tankers which can hold 2 million barrels of oil. It is being said that this “one supertanker port has turned the economics upside down.” It may be, or already is, greatly impacting Alberta’s plans to get raw bitumen to tidewater to a port that accommodates much smaller tankers, in the realm global oil economics. It is interesting how Canadian politicians are not speaking of what probably is the elephant in the room, LOOP, and what surrounds it and why it may really screw up/has already screwed up, our oil and gas industry. The following article, under the section “Multiple snags” explains why “Alberta’s exports are in trouble.”
    “Another reason why expansion of Alberta’s oil/tar sands has a weak business case.”
    http://www.tsss.ca/channels/energy-cities-climate-change/another-reason-why-expansion-of-albertas-oiltar-sands-has-a-weak-business-case

    Reply
    • Political Ranger

      November 28th, 2018

      thing is … ya got to be specific about which particular elephant you’re referring too, perhaps which room as well.

      Most, sometimes all, the product being moved through TMP ends up in the US. According to the TMP website, only 9% ends up at the Westridge Marine Terminal where 8 out of 10 tankers goes to California and 1 or more goes to the Gulf of Mexico. The rest is sent to local refineries or is sent to the Puget Sound system. The new pipe does not seem to change that at all. There are no plans that you can point to that indicate any of this stuff goes to Asia.
      That, seems to me is another elephant!

      Reply
  6. tom in ontario

    November 26th, 2018

    Well researched and presented. For the past twenty-five years General Motors has been shuttering plants all over the place not just Ontario and Quebec. Southeast Michigan and Ohio have seen closings in Lansing, Grand Rapids, Detroit, Lordstown, Lorain and lots more. These and Canadian plants are just dots on the map. Blame Trudeau, Harper, Wynne, Ford but they have little to do with it. GM is a multi national, only the bottom line counts, that’s it.

    Reply
  7. Pogo

    November 26th, 2018

    So. We’re all nearly aligned in our collective demise! That’s just great! We couldn’t avoid it, so those of us left, are here to console each other on the downside! Wonderful! Brilliant! Jason Kenney style scintillating genius! To hell with the consequences! I want what I want! Now!!! I’ll vote for your pain and live with mine as a result? Is that you Dad? https://youtu.be/USYcoIZUU8o

    Reply
  8. David

    November 26th, 2018

    Of all the provinces in Canada, Alberta is in some ways arguably close in character to Ontario – both are fairly economically powerful and a lot of Ontarians have moved to Alberta over the years. However, I doubt there will be a great outpouring of sympathy here for the plight of those in Oshawa whose jobs are on the line. We are rather preoccupied with our own economic challenges right now.

    I do suspect what may irk some Albertans the most here, is almost anything that happens on the boundary of the GTA is a “national” problem so it will receive considerable national media coverage for quite some time. This will not help satisfy those that feel Alberta’s economic challenges have been somewhat ignored or dismissed nationally and that the Federal government has not quite understood the gravity of the situation here. Of course, Federal politicians well understand two things of gravity that are important them – first, the large number of seats in the GTA and second, unlike Alberta they do not vote for mainly for one party Federally – allowing one major party to take us for granted and one other to arguably pay less attention to us than we want. The GTA has seldom made the mistake of putting all its political eggs in one basket, at least not for too long.

    I suppose it might be easy for some in Alberta to dismiss the GM situation as being the closing of just one plant and compare the number of jobs lost today to what Alberta has lost over the last few years. However, this is a narrow very provincial view that really misses what is going on in Ontario. There have been many factory closings and layoffs over the last 10 or 20 years – GM is just the latest and is getting more attention than most, because of the number of employees and the profile of this plant.

    I’m not sure if we could blame Trump for all the economic troubles in Ontario, but until he recently started making threatening noises about tariffs on autos and steel, our auto industry was hanging in there better than many other manufacturers. There were probably a number of factors that led GM to decide to close the Oshawa plant, but I am sure all the noise Trump made on tariffs was not something they ignored and it might have tipped the balance to closing the plant. They probably did not want to face Trump’s wrath if they closed several plants in the US, but not in Canada.

    Lastly, I wonder what this will do the GM name and image in Canada. I feel there could be a repeat of the Heinz ketchup situation – even more likely in this case as there are a number of other companies that still make cars here. A lot of people buy cars from the big 3 auto manufacturers because they believe more of their products are manufactured here. While that is not always true, it will now be much harder after this for GM to claim to be a Canadian manufacturer any more. In fact Toyota and Honda, both which make cars in Ontario, may now able to claim to be more Canadian than GM. GM has already retreated from Europe and now is retreating from Canada, perhaps somewhat like the US politically is retreating from its role as a leading international power, now the most important international auto companies are not US ones.

    Reply
  9. D. Bruce Turton

    November 27th, 2018

    While I understand the push to get young Canadians well trained in technological innovation and deployment, I would like to see young Canadians well trained in permaculture, agroecology, eco-economics, horticulture, home building that uses as little natural gas and electricity as possible, commercial building that does the same and even incorporates more geo-thermal heating and cooling, retrofitting, heat pump technology and deployment, and more of like initiatives. Our reliance on the internal combustion engine and its voracious need of product from places like the tarsands is coming to an end – if not in my lifetime (which is quickly shortening), then certainly in that of my kids and grand kidlettes. If we and they plan on living in such a cold climate (which will still have winter for quite some while yet), then we and they need to learn how to do so using much less in the way of fossil fuels. I tend to remind myself and others that the first of the three ‘R’s’ is “Reduce”.

    Reply

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