Buzz Declares War on GM!
From the Canadian Press:
CAW slams 'illegal' GM move to scrap 4 pickup and SUV plants, including Oshawa
Tue Jun 3, 6:17 PM
Romina Maurino, The Canadian Press
TORONTO - In a move its Canadian union calls "illegal" and a betrayal, General Motors Corp. (NYSE:GM) is shutting four North American truck plants, including one in Oshawa, Ont., that employs 2,600 people.
TORONTO - In a move its Canadian union calls "illegal" and a betrayal, General Motors Corp. (NYSE: GM) is shutting four North American truck plants, including one in Oshawa, Ont., that employs 2,600 people.
The company said Tuesday the shutdowns were in response to "recent developments on the global oil scene" that have led to high gasoline prices, which represent "a structural change, not just a cyclical change" in consumer demand and the company's prospects.
CEO Rick Wagoner said at the annual meeting in Delaware that the Oshawa pickup truck plant east of Toronto, will cease production in the third quarter of 2009 "and we don't have plans to allocate future products" - meaning a probable permanent closure of the factory.
The CAW reacted angrily to the announcement, pledging to fight the streamlining move.
"This decision is unfair, it's unjust, it's unwarranted, it's illegal, it violates our collective agreement and we're going to do everything in our power - and we have power," Canadian Auto Workers president Buzz Hargrove declared at a news conference.
"This is not going to happen without a fight."
Asked how the union would respond, he said: "Watch us."
Hargrove said the union wasn't ruling out anything and "will explore all options." He declined to be specific, but when asked whether the options included a wildcat strike or legal action against the company, the union leader said "everything is on the table."
Tuesday's cuts are another blow to the battered manufacturing sector in Ontario and Quebec, which has been decimated by layoffs and closures in the lumber, auto assembly, textiles and auto parts sectors. A high Canadian dollar and a slump in the United States have squeezed exports in those industries and produced widespread streamlining at the so-called Detroit Three carmakers - GM, Ford and Chrysler.
However, at the same time, Japanese carmakers Toyota and Honda have raised their market share in North America and have been expanding their operations in central and southwestern Ontario, adding thousands of new jobs at their non-union plants.
At GM Canada, the CAW says 2,600 face job losses as a result of the closure and noted that GM's workforce in Oshawa will be half the size it was 20 years ago, falling from 20,000 in the late 1980s to about 9,000 this year. About 5,400 people work at an adjacent car plant in Oshawa which GM will keep open and may expand with a new product.
Chris Buckley, president of the CAW local at the Oshawa plant, says there's about 1,000 production workers on each of the two shifts, plus about 600 skilled trades workers at the truck plant.
GM's Wagoner said it's "unlikely" there will be new mandates for any of the plants affected by Tuesday's announcement, including two in the United States and one in Mexico, as GM moves "to address the rapid industry shift away from trucks and SUVs."
GM officials said later the company is considering adding a third vehicle to its Oshawa car plant, but didn't provide details.
This is the latest announcement of job losses at Oshawa's GM operations, which, like much of the auto sector, have been hit by high gas prices and slumping construction-industry demand for pickups and large sport utility vehicles.
GM Canada spokesman Stew Low said it was hard to tally the eventual job impact in Oshawa: While one shift ended on Jan. 1 and the second concludes Sept. 8, the timing of the full closure is uncertain.
But Hargrove said GM committed in writing to produce pickups in Oshawa until the end of the new collective agreement, ratified two weeks ago, in 2011. He said the automaker also promised that Oshawa would build a new generation of light-duty trucks to be introduced in 2011 or 2012, in exchange for millions of dollars worth of labour cost reductions.
Under the agreement reached with GM, a plant in Oshawa will begin building a new Camaro sports car, along with a rear-wheel drive car. The contract also preserved one shift at the truck assembly factory in Oshawa until 2009.
"There was no justification for a change which would lead to this kind of decision," Hargrove said.
"It violates the corporation's moral obligation to its workers and their families. It violates the whole concept of collective bargaining."[/font]
The CAW said the move will also have a spillover effect for a GM plant in St. Catharines, as well as for auto parts companies including Lear Corp. in Ajax, Ont., Automodular Corp. (TSX: AM.TO) and Martinrea International Inc. (TSX: MRE.TO).
"As far as St. Catharines goes, roughly, the engine production is about 60 per cent of their volume and ultimately, this will close the Lear Ajax facility - they're the sole supplier of the seats going into that truck plant," Buckley said.
The union urged the federal government to stop sales in Canada of General Motors trucks made elsewhere if the closure of what GM has acknowledged is a highly productive plant proceeds.
"It's an American company, controlled by Americans and run by Americans," Hargrove said.
"They're trying to cut their costs by moving some of our production into Mexico."
Prime Minister Stephen Harper called the announcement "unfortunate," but said it was due to problems in sales of GM trucks.
"It is closing plants on this not just in Canada, in the United States and Mexico," Harper said.
"We will work with the company and others to ensure that we have jobs for the future. We have a strategy - It was in the budget and the opposition should not have voted against those funds for the auto sector."
Ontario Premier Dalton McGuinty said Tuesday his government would try to recoup part of a $175-million provincial loan earlier than planned if GM was found to be violating minimum job levels specified in their agreement.
But McGuinty said he remains optimistic that Oshawa will land more auto jobs.
"As the collapse of the truck market forces GM to build fewer trucks, they will be looking to produce more cars," McGuinty said.
"GM has indicated that Oshawa's car plant is close to the front of the line - if not at the very front - as they look for an assembly plant to build another new car."
In Oshawa, Deputy Mayor Brian Nicholson pressed for action, saying the town didn't "need lip service, we need solutions."
"The economy here is much more diverse than it was 20 or 30 years ago, so we don't have the more direct downturn that you would get across the board," he said.
"But we need to take it seriously, we need to deal with the impact, and we have to get the federal and provincial governments working together with us to find long-term solutions."
Kally Spadafore, who was on the way into a shift, called the news "disheartening."
"It's sad that we signed a contract hoping that we'd have product and now we don't," she said.
"I'm hoping I still have a job after 23 years. It's scary. It's been a rough day."
Auto analyst Dennis DesRosiers said the CAW could have helped its membership by negotiating more competitive labour agreements.
"His brothers in the U.S. took $25 to $30 an hour out of their cost structure, Buzz took maybe five," DesRosiers said.
"Canada is the highest-cost location anywhere in the world for GM to manufacture pickup trucks. That's not a good position to be in when you're having to cut truck capacity."
Hargrove, he said, "can try to do anything he wants" but "it's not going to help."[/font]
"It's the market that's the problem - the fact of the matter is that Americans aren't buying pickup trucks."
GM, DesRosiers said, isn't likely to change its mind.
"I think GM is doing the right thing."
In addition to Oshawa, the plants being closed are a factory in Janesville, Wis., making the Chevy Tahoe/Suburban big SUVs; a Chevy Trailblazer/GMC Envoy plant in Moraine, Ohio; and the Chevrolet Kodiak medium-duty truck plant in Toluca, Mexico.
The closures will entail undisclosed accounting writedowns, along with "significant cash savings" expected to amount to US$1 billion a year, Wagoner said.
While cutting its truck capacity by over 700,000 units annually, Wagoner said GM is adding a shift a Michigan plant making the Malibu mid-sized sedan and also will boost production at an Ohio factory assembling the compact Chevrolet Cobalt and Pontiac G5.
It's also reviewing the gas-guzzling Hummer, and would consider revamping or selling it.
