Armina Ligaya, The Canadian Press
Posted on Monday, November 26, 2018 10:04 EST
Revised: Monday, November 26, 2018 at 18:27 EST
TORONTO – A union representing workers at the General Motors plant in Oshawa, Ontario, promises "one hellish fight" after the automaker announced that it would close this location with four other facilities in the US as part of a reorganization.
A few hours after the announcement of GM, Jerry Dias, the national president of Unifor, stood in front of the union hall crowded by disturbed GM employees and said that the union would fight against the planned movement "tooth and nail".
"They do not shut our damn plant without a single infernal fight," Dias told the viewers, some still wet themselves with holding an improvised picket line in heavy rain.
He said that the plant won "every prize" and was the best according to "each matrix".
"We are sick and tired of being pushed around, and we will not be pushed … we deserve respect," he said.
GM announced the closure on Monday as part of a comprehensive strategy to change product lines and the production process, under which the company will focus on electric and autonomous vehicle programs, a plan that she believes will save the company $ 6 billion by 2020.
"This industry is changing very quickly when you look at all transformative technologies, whether it's drive, autonomous driving … These are the things we do to strengthen our core business," GM's General Manager and chairman Mary Barra told reporters. "We think it's worth doing it all at once and confront it while the company is strong and the economy is strong."
GM also said it would reduce the number of full-time jobs and jobs by 15 percent, which is 25 percent fewer executives. Savings of USD 6 billion include a cost reduction of USD 4.5 billion and lower capital expenditures annually by almost USD 1.5 billion.
GM shares in New York increased by 7.8 percent to 38.75 USD, and the highest level since July. The automaker's shares closed at $ 37.65, an increase of 4.79 percent.
The upcoming shutdown is "frightening" – said Matt Smith, who has been working at the Oshawa factory for 12 years. He said his wife also works at GM, and the couple have 11 months at home.
"I do not know how to feed my family," he said outside the southern gate of the plant, where the workers set up a truck lock on the entry side.
"It's hard, it's awful, we've always been the best plant in North America, it's a nutshell."
Unifor, a union representing over 2,500 employees at the factory, said there was no product allocated to the plant in Oshawa in December 2019.
Production began at the factory in Oshawa on November 7, 1953, and in the 1980s, the factory employed about 23,000 people.
GM also closes the Detroit-Hamtramck factory in Detroit and the Lordstown Assembly in Warren, Ohio in 2019. Also GM plant at White Marsh, Md. And Warren, Michigan, will be close.
The automaker did not say that the bets will be closed but used the term "unallocated", which means that future products will not be allocated to these facilities next year.
In addition to the previously announced closure of the assembly plant in Gunsan, Korea, by the end of next year will cease operations of two additional plants outside of North America.
Closures occur when car manufacturers in North America feel pressure from US tariffs on imported steel and aluminum. Last month's rival GM Ford Motor. Every third quarter recorded a profit of USD 991 million, but these prices cost the company about USD 1 billion. Of this amount, USD 600 million was largely due to American import duties on steel and USD 200 million from retaliatory tariffs imposed by China on US vehicles, Ford said.
The restructuring announcement also appeared after Canada and the United States reached an agreement between the United States – Mexico – Canada to replace the North American free trade agreement after months of strained negotiations.
Under the new trade agreement, 40 percent of the content of cars must be produced by employees earning at least $ 16 per hour to qualify for duty-free traffic across the continent. The agreement also provides that 75 percent of the car's content must be made in North America to be free of charge.
Last month, when GM reported a 2.5 billion profit in the third quarter, the manufacturer said it intends to cut costs by offering redemption to around 18,000 white-collar workers with 12 or more years of work. This represented more than one-third of 50,000 employees throughout North America. Employees decided on November 19, and they would have to leave the house by the end of the year.
In July, GM executives stressed that pressure on commodity prices and exchange rates was more significant than expected, and the car manufacturer expected an additional $ 1 billion ahead, with steel being the biggest threat.
Meanwhile, Barra GM said on Monday that the company will invest in autonomous and electric vehicle technology. Vehicles have become more "software-oriented" and GM will want to hire more employees with "the right set of skills," she said.
"You'll see that new employees will join the company because others leave the company," Barra said.
The announced changes on Monday will not affect new GM and SUV trucks, which, according to Barry, "are doing very well".
However, he says, the Oshawa plant produces an older model.
"Oshawa is building trucks of the previous generation, which are very helpful during the transition … When we move on to the new truck architecture," she said.
The timing of the decision was surprising, but not a decision in itself, said Dennis DesRosiers, president of DesRosiers Automotive Consultants. He pointed to a sharp drop in production over the past 15 years from almost a million pieces to around 148,000 units in 2017.
"Writing was on the wall for a while, so it was not important if they would do it," he said in an e-mail.
The decision is "devastating" for plant employees and car suppliers, but Oshawa has adapted over the years and will survive it too, added DesRosiers.
In addition to the Oshawa assembly plant, GM has an engine and gearbox factory in St. Catharines, Ont. and the CAMI assembly plant in Ingersoll, Ont.
Ontario Prime Minister Doug Ford said it was a "difficult day" for employees at Oshawa factories, auto parts suppliers in Ontario and their families.
The provincial government has begun research to help employees, companies and communities cope with the "consequences of this decision", including a training program to help local workers recover their employment as quickly as possible, Ford added.
– With the files of Ian Bickis in Oshawa and Tara Deschamps in Toronto