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Warmington

Alarm bells sounded over GM future in Oshawa

By Joe Warmington, Toronto Sun

General Motors plant in Oshawa (Dave Thomas/Toronto Sun files)

General Motors plant in Oshawa (Dave Thomas/Toronto Sun files)

OSHAWA - 

General Motors says one of its Oshawa production lines will “cease” operation in 2016 and has offered no commitment on the continuation of its second line.

If things don’t change, it could mean GM will not produce cars in Oshawa beyond August 2016.

I asked GM to explain:

“All scheduling adjustments are subject to market demand,” said GM spokesman Adria MacKenzie. “At this time, we have nothing additional to announce.”

She added GM takes steps to ensure plant locations enable the company to “build and sell top quality vehicles for our customers around the world and deliver value for our shareholders.

“The Flex Line (in Oshawa) builds the Chevrolet Camaro, Chevrolet Impala, Buick Regal and Cadillac XTS on three shifts,” MacKenzie wrote in an e-mail. “The Consolidated Line builds the Chevrolet Impala Limited and the Chevrolet Equinox on one shift. To meet projected market demand for the Chevrolet Impala Limited and Chevrolet Equinox, General Motors has announced the extension of production on the Consolidated Line at the Oshawa Assembly Plant. As a result, the Consolidated Line is now anticipated to cease production in 2016.”

Is GM committed to building cars in Oshawa past the summer of 2016?

It’s not a direct “no,” but certainly not a “yes.”

What does it mean?

“It means there is nothing to suggest General Motors will build a product past the summer of 2016 and it’s probably time somebody rang those alarms bells,” warned former Oshawa mayor John Gray. “General Motors has been building cars in Oshawa for over 100 years but this could come to a close.”

In less than two years from now.

“At the present moment, there is no new product allocated to GM Oshawa Assembly after August 2016,” added Gray, who is running for his old job in the Oct. 27 election. “It takes a minimum of two-plus years to tool up for a production model. There is no announced production tool up.”

MacKenzie confirmed Monday that one of the two lines at the plant is “now anticipated to cease production in 2016” and was non-comittal on the other.

Of course, this was a similar worry in 2013 before the creation of new deals to build Impalas, Equinox, Camaros and Cadillacs which extended production to 2016.

That kept 3,000 people working in Oshawa’s GM plant.

How about after 2016? Don’t panic yet, said the union.

“It is a concern, but it is not a crisis,” insisted Unifor, Local 222 president Ron Svajlenko.

“We are always looking ahead and there will be talks about the gap and product allocation.”

But his belief is GM will continue with its current production lines until “2018 or 2019” — and beyond.

“It all depends on sales,” he said, predicting that after negotiation, “we will get extended.”

Although hopeful, Gray cautioned there’s nothing on paper to show an extension will happen.

Gray argued that since the Oshawa plant has received a taxpayer-funded bailout in the past, the community needs to talk about the issue.

“GM pays a great deal of property taxes — which, should the plant cease production — the amount of taxes will fall, the taxation shortfall will shift to already burdened homeowners. To add to the scenario, a closed plant will likely cause property values to fall.”

Taxpayers still own a 7% stake in GM and Gray said, “There should be no secrets or ambiguity. It’s almost like nobody wants to deliver the bad news.”

Who knows, maybe soon GM will deliver some good news for Oshawa.

In the end, it will come down to a simple question. Is GM going to build cars in Oshawa or not?

Stay tuned — only time will tell.

But alarm bells have been sounded.


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