VIDEO: GM to close Oshawa plant, four U.S. plants in massive reorganization push

Company to focus on electric and autonomous vehicle programs

Workers from Oshawa’s General Motors car assembly leave the plant, Monday Nov 26 , 2018. (THE CANADIAN PRESS/Eduardo Lima)

General Motors will close its production plant in Oshawa, Ont., along with four facilities in the U.S. as part of a global reorganization that will see the company focus on electric and autonomous vehicle programs.

The auto manufacturer announced the closures as part of a sweeping strategy to transform its product line and manufacturing process to meet changing demand in the transportation industry, a plan that it said will save the company US$6 billion by the year 2020.

“This industry is changing very rapidly, when you look at all of the transformative technologies, be it propulsion, autonomous driving… These are things we’re doing to strengthen the core business,” GM chief executive and chairwoman Mary Barra told reporters Monday. “We think it’s appropriate to do it at a time, and get in front of it, while the company is strong and while the economy is strong.”

GM also said it will reduce salaried and salaried contract staff by 15 per cent, which includes 25 per cent fewer executives. The US$6 billion in savings includes cost reductions of US$4.5 billion and lower capital expenditure annually of almost US$1.5 billion.

GM’s shares in New York jumped as high as 7.8 per cent to US$38.75. The automaker’s shares were trading at US$37.95 by the early afternoon, their highest level since July.

Unifor Local 222 shop chairman Greg Moffat said Monday the plant is not closing “without the fight of our lives.”

READ MORE: Uber suspends self-driving car tests after death

The Oshawa Assembly Plant employs 2,522 workers with Unifor Local 222, according to GM’s website. Production began on Nov. 7, 1953, and in the 1980s the plant employed roughly 23,000 people.

GM is also closing the Detroit-Hamtramck Assembly plant in Detroit and the Lordstown Assembly in Warren, Ohio in 2019. GM propulsion plants in White Marsh, Md., and Warren, Mich., are also due to close as well.

The automaker did not say the plants would close, but used the term “unallocated,” which means no future products would be allocated to these facilities next year.

The closures come as North American automakers feel pressure from U.S. tariffs on imported steel and aluminum. Last month, GM rival Ford Motor. Co. reported a US$991 million profit during its third quarter, but said tariffs cost the company about US$1 billion. Of that amount, US$600 million was due largely to U.S. tariffs on imported steel and US$200 million from retaliatory tariffs imposed by China on American vehicles, Ford said.

The restructuring announcement also comes after Canada and the U.S. reached the United States-Mexico-Canada Agreement to replace the North American Free Trade Agreement, after months of strained negotiations.

Under the new trade deal, 40 per cent of the content of automobiles must be produced by workers earning at least US$16 per hour to qualify for duty-free movement across the continent. The agreement also stipulates that 75 per cent of the automobile’s contents must be made in North America in order to be tariff-free.

Meanwhile, GM’s Barra said Monday the company will be investing in autonomous and electric vehicle technology.

The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Charles Hays fly to victory at Prince George Condor Classic

Junior Rainmakers soared through first two games to set up a dramatic final

Prince Rupert brings home bronze medal from Quesnel

All-West Glass Peewee Seawolves score overtime victory at Rep Tournament

Shames Mountain receives $30,000 boost from Rio Tinto

Donation will be used to purchase new conveyor lift on bunny hill

Heiltsuk Nation calls probe into arrest of Indigenous man at bank ‘woefully inadequate’

Maxwell Johnson and his 12-year-old granddaughter had been at a Bank of Montreal branch in Vancouver on Dec. 20

Pipeline at centre of B.C. conflict is creating jobs for First Nations: chief

All 20 elected band councils along the Coastal GasLink pipeline route have signed benefits agreements

Kids across Canada more at risk of hospitalization from flu this season: doctor

Dr. Theresa Tam said influenza B does not usually peak until February or later

B.C. offers $5 million equipment loan program to help ailing forest contractors

Local politicians in Port McNeill and Campbell River says local economies are struggling

Vancouver Island distillery wins award for best Canadian rye whisky

Shelter Point cleans up at Canadian Whisky Awards

Kelowna hotel to award couples for baby-making with Nooner deal

The deal includes a free stay every Valentine’s Day for the next 18 years

Crown won’t appeal sentence in child sex assault case of former Burns Lake mayor

B.C. Prosecution Service said sentence doesn’t meet standard for appeal

‘Scariest boat ride of my life’: Passengers trapped by ice on rocky B.C. ferry sailing

The Nimpkish docked in Bella Coola on Jan.12 coated in a thick layer of ice

B.C. pair ordered to pay $55,000 for oil tank discovered four years after selling home

Judge says defendants breached contract, despite being unaware of tank until basement flooded

Canada to give $25,000 to families of each Canadian who died in Iran plane crash

Prime Minister Justin Trudeau also made it clear that Canada still expects Iran to compensate victims

Good Samaritan pays part of rent for B.C. woman facing eviction in can-collecting dispute

Zora Hlevnjak, 76, supplements her pension by collecting cans and receiving public donations

Most Read