Automotive News Canada - December 2020 - v2 - 26

* D E C E M B E R 2020

1,400-1,700 new GM jobs; many times that for the supply chain
CONTINUED FROM PA GE 1

merly A.G. Simpson, has been making bumpers for GM since 1974, but
the future of its Oshawa facility has
been in doubt since vehicle assembly
ceased in the city in December 2019.
GM's decision dealt a blow to
Ontario's parts
sector, with some
businesses closing
their doors, while
others such as
AGS laid off workers.
But in a dramatic aboutface, GM this fall
Volpe: Restarting
announced plans
vehicle proto invest up to $1.3 duction at GM
billion retooling
Oshawa means
Oshawa Assembly $3 billion a year
to meet rising
for the parts
demand for the
sector.
highly profitable
FILE PHOTO
and popular lightand heavy-duty Chevrolet Silverado
and GMC Sierra pickups.

SUPPLIER WINDFALL
GM has said it expects to hire 1,400
to 1,700 hourly workers by the time
production resumes in early 2022. The
union representing the workers said
that could reach 2,300 if a third shift is
added.
For suppliers, that level of production translates into $3 billion a
year in new business across southern
Ontario and 8,000 to 10,000 additional jobs, said Flavio Volpe, president of
the Automotive Parts Manufacturers'
Association (APMA).

" There is nothing that compares
to the economic activity that a local
assembly plant provides, " Volpe said.
" Ontario has its eastern bookend
back, and it will help to fortify all the
automotive investments in the Greater
Toronto Area. "
GM Canada President Scott Bell
said the company is making a " fullblown investment " in Oshawa to meet
accelerating demand for its pickups,
which now account for 40 per cent of
GM Canada's sales.
" What that will do to the supply
chain locally? It's going to have quite
an impact, " Bell said on an Automotive
News Canada podcast Nov. 20.
According to Unifor, which negotiated the GM labour contract that
included the new investment, every
new job in the
Oshawa plant will
create up to seven
indirect jobs.
" It's in that ballpark. It's going to
be significant, " Bell
said.
Construction has
already begun and
James: Former
includes a new
suppliers will
body shop and
know shortly
flexible assembly
line, a GM spokes- after Christmas
which parts
person said. The
makers will feed
company expects
GM Oshawa.
to run two shifts,
FILE PHOTO
but that will
depend on market
demand, the spokesperson said.
Unifor Local 222, which represents
workers at several GM suppliers as
well as Oshawa Assembly, said it's

As an existing GM supplier, AGS
Automotive Systems expects its
plant in Oshawa to benefit from the
automaker's plan to restart vehicle
production.
PHOTO: AGS AUTOMOTIVE SYSTEMS

premature to say which companies
will be hiring.
" We just signed the agreement, "
said Colin James, who retired as president of the Unifor local in December
after helping negotiate the landmark
deal. " GM is just putting the work out
for bids. "
Former GM suppliers will likely
get first crack at the work and will
know shortly after Christmas which
parts makers will be feeding the plant,
James said.
GM expects a " significant increase "
in its full-size-pickup capacity when
Oshawa comes online in January 2022,
CEO Mary Barra told an investor conference Nov. 5.

'RESTORED OUR FAITH'
Suppliers as far away as Windsor,
about 400 kilometres southwest of

Oshawa, welcomed the announcement.
" We really needed that investment, " said Jon Azzopardi, interim
chair of the Canadian Association of
Mold Makers. His company, Laval
Tool & Mold Ltd., supplies service
parts to GM.
" It has restored our faith in GM, so
it will be good for us. "
Automotive jobs pay well, with
average hourly wages at an assembly
plant ranging from $30 to $35 and up to
$25 at suppliers, Azzopardi said.
Magna International Inc., one of
GM's largest suppliers, said it was too
early to comment on the impact on its
business.
For AGS, it means its Oshawa
facility can resume supplying a local
assembly plant, reducing transportation costs and bringing back value-added, in-house assembly, said
Boulton of the J2 Group.
The plant, which performs metal
stamping and plastic injection molding, employs 230 people, compared
with 287 in 2017.
It's too early to comment on any
hiring plans, Boulton said.
AGS, which employs 1,500 in
Canada and the United States and
generates annual revenue of more
than $500 million, has been supplying
bumpers to U.S. customers from its
Oshawa plant, Boulton said. But serving that market from a distance was
becoming a challenge, she said.
The reopening of GM Oshawa will
make the AGS plant more viable, said
Boulton. It will also allow for the actual assembly of bumper components to
resume - instead of making parts that
are shipped off in pieces. - ANC

GM Oshawa: Life beyond pandemic-induced pickup shortages
CONTINUED FROM PA GE 1

weekly podcast in November.
COVID-19 forced vehicle production to shut down
for about two months in the
spring - thus creating inventory issues
throughout
NEWS ANALYSIS the industry, which
also provided motivation to
turn the lights back on in
Oshawa.
Supply-chain and inventory issues especially affected assembly of the Chevrolet
Silverado and GMC Sierra,
as demand in the segment
remained high
even amid a
pandemic-induced economic
slowdown.
Two assembly plants in
the United
States and one
in Mexico that
Barra: Not
already build
enough
the trucks are
capacity
running on
in current
overtime, and
plants
that build
the company
pickups.
" can't build
FILE PHOTO
enough, " as
General Motors
CEO Mary Barra said in
November.
" There's this huge void,
and it'll take years to catch
up, " said Jerry Dias, president
of Unifor, which represents

unionized GM workers in
Canada. " It's a predicament
they're in now, and the question was, how do they get out
of it? "
Enter
Oshawa
Assembly. As
part of the bargaining process
with Unifor
this year, GM
agreed to spend
between $1 billion and $1.3
Bell: GM
billion to build Oshawa is
light-duty and a long-term
heavy-duty
commitment
Silverado and beyond the
Sierra pickups inventory
at the factoproblems
ry. The invest- created
ment, which
by the
includes a
pandemic.
new body shop F I L E P H O T O
for the plant,
was already under way in
November. Unifor expected
GM to hire between 1,400 and
1,700 workers, including about
175 still on layoff from 2019.
It's a remarkable turnaround for the storied plant,
which once employed more
than 20,000 people but has sat
largely empty since the beginning of the year. GM ended
vehicle production there as it
looked to reduce capacity and
underused plants in its North
American production footprint.
While GM launched a

smaller aftermarket-parts
operation in the plant earlier this year and has produced
masks under a contract with
the federal government, the
end of vehicle assembly and
the loss of about 2,000 jobs
were seen as a major blow to
the local economy.
The plant served as a symbol of an auto-manufacturing sector believed to be in
decline; more plants have
closed than have opened in
Canada this century, and the
nation produced about one
million fewer vehicles in 2019
than it did in 1999.

FLEXIBLE FUTURE
Dias hopes GM's investment plans,
along with
those recently announced
by Ford Motor
Co. and Fiat
Chrysler
Automobiles,
will stabilize Canada's
Dias: Set out
manufacturto " bury the
ing footprint
axe " with GM
and set it up
after a few
for growth in
rough years.
the coming
FILE PHOTO
years. Bell,
meanwhile, said the investment in Oshawa signals that
GM views the plant as a longterm solution, even if truck
demand unexpectedly falls.
" We feel very good about

Oshawa Assembly has been
shuttered for a year, but GM is
expanding production capacity
for the Chevrolet Silverado
and GMC Sierra models.
PHOTO: BLOOMBERG

Oshawa because we're trying
to make it flexible, " he said.
" We think Oshawa is going
to be [in] one of the best positions of any of our plants. "
Plans for Oshawa Assembly
have been batted around internally at GM Canada for " more
than a year, " Bell said.

SIMPLY SAID
" We felt that if the company had a problem to solve,
then Oshawa could be the
solution, " he said. " We needed to amp up our capacity for
this new truck. We saw the
opportunity, and we jumped
on it. It's as simple as that. "
But there was still the matter of reaching a new collective agreement with Unifor.
Considering the recent history between the automak-

er and the union, that was no
small feat. Workers represented by Unifor, after all, staged
a monthlong strike at CAMI
Assembly in Ingersoll, Ont., in
2017. It ended after GM threatened to pull production of the
Equinox crossover out of the
plant entirely. GM was also
the subject of a 2019 Unifor
media campaign blasting the
automaker for its decision to
end production at Oshawa, as
well as a blockade of its headquarters and other actions by
the union.
The sides reached a truce
in March 2019, when GM and
Unifor agreed that the plant
would house an aftermarket parts production facility as well as become the site
of a new autonomous-vehicle
test track. Crucially, the parties agreed that the integrity
of the plant would be maintained, leaving the door open
for future production.
Few in the industry at the
time thought such a large
investment was likely to come
as soon as 2020, but Dias said
he remained optimistic heading into bargaining.

FENCE-MENDING
First, he needed to reset
the union's rocky relationship
with GM.
He said he began reaching out to senior company

SEE DIAS NEXT PAGE

Automotive News Canada - December 2020 - v2

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