Armina Ligaya, The Canadian Press
Published Monday, November 26, 2018 10:04 AM EST
Last Updated Monday, November 26, 2018 6:27 PM EST
TORONTO – The union representing the assembly plant in Oshawa, Ont., Was promising "one hell of a fight" after the automaker announced it would close the location along with four other facilities in the U.S. as part of a global reorganization.
Hours after GM's announcement, Jerry Dias, national president of Unifor, standing before a union hall overflowing with anxious GM workers and said union will fight against planned move "tooth and nail."
"They are not closing our damn plant without a fight," Dias told the audience, some still drenched from holding an impromptu picket line in the driving rain.
He said the plant has won "every award" and was the best by "every matrix."
"We are sick and tired of being pushed around. And we're not going to be pushed around … we deserve respect," he said.
GM announced the closures A process that will see the company focus on electric and autonomous vehicle programs, the plan that will save the company US $ 6 billion by the year 2020.
"This industry is changing very rapidly, when you look at the transformative technologies, be it propulsion, autonomous driving … These things are doing to strengthen the core business," chief executive and chairwoman GM Mary Barra told reporters Monday. "We think it's appropriate to have a time, and get in front of it, while the company is strong and while the economy is strong."
GM also said it would reduce salaried and salaried contract staff by 15 per cent, which includes 25 per cent fewer executives. The US $ 6 billion savings includes cost reductions of US $ 4.5 billion and lower capital expenditure of US $ 1.5 billion annually.
GM's New York shares jumped as high as 7.8 per cent to US $ 38.75, their highest level since July. The automaker's shares are closed at US $ 37.65, up 4.79 per cent.
The impending shutdown is "scary," said Matt Smith, who had worked at the Oshawa plant for 12 years. He said his wife also works at the GM facility and the pair have an 11-month-old at home.
"I don't know how I'm going to feed my family," he said outside of the plant's south gate, where the workers instituted a blockade for trucks from the entrance.
"It's hard, it's horrible. We've always been the best plant in North America. It's a kick in the nuts."
Unifor, the union representing more than 2,500 workers at the plant, said it had been allocated a product to the Oshawa past plant December 2019.
Production began at the Oshawa plant on Nov. 7, 1953, and in the 1980s the plant was 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 not told the plants would close, but used the term "unallocated," which means no future products would be allocated to these facilities next year.
On the top of the announced in the Gunsan, Korea closure of the assembly plant, GM will also release the operations of two additional plants outside North America by the end of 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 to U.S. tariffs on imported steel and US $ 200 million from retaliatory tariffs imposed by China said 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.
Last month, as GM reported a US $ 2.5-billion third-quarter profit, the automaker also said to cut costs by offering buyouts to roughly 18,000 white-collar workers with 12 or more years of service. That represents more than one thousand of the 50,000 salaried workers across North America. Workers had until Nov. 19 to decide, and they will have to end the year.
And in July, GM The US $ 1-billion additional headwind, with the biggest exposure being steel.
Meanwhile, GM's Barra said Monday the company will invest in autonomous and electric vehicle technology. Vehicles have become more "software-oriented" and GM will be willing to hire more employees with the "right skill set" going forward, she said.
"You will see us have new employees joining the company as others leave the company," Barra said.
The changes announced Monday will not impact GM's new trucks and SUVs, which are Barra said are "doing very well."
The Oshawa plant, however, has been producing an older model, she said.
"Oshawa is building the previous generation of trucks that are very helpful in the crossover period … As we are transitioning to the new truck architecture," she said.
The timing of the decision was surprising, but not the decision itself, said Dennis DesRosiers, president of DesRosiers Automotive Consultants. He pointed to steep production decline over the past 15 years from nearly a million units to roughly 148,000 units in 2017.
"The writing has been on the wall for quite some time so it didn't matter whether they would make this move," he said.
The decision is "devastating" for workers at the plant and auto suppliers, but Oshawa has adapted over the years and will survive this as well, DesRosiers added.
The Oshawa assembly plant, GM has an engine and transmission plant in St. Catharines, Ont. and the CAMI Assembly plant in Ingersoll, Ont.
Ontario Premier Doug Ford said it was "difficult day" for the Oshawa plant workers, Ontario auto parts suppliers and their families.
The provincial government has begun exploring measures to help the impact of workers, people with the "aftermath of this decision," including a training program to help local workers as quickly as possible, Ford added.
– With files from Ian Bickis in Oshawa and Tara Deschamps in Toronto