In September it surfaced that General Motors Canada plans on closing down one of its Oshawa production lines after 2016, while the future of the second line at the facility was uncertain. According to the CBC, GM has plans to close down Oshawa’s second line, in addition to drastically cutting back production at its Ingersoll facility, raising questions about the automaker’s future in the country.
According to automotive analysts Auto Forecast Solutions, GM will be “all but out of Ontario by 2019,” with the Oshawa plant closing completely, and Ingersoll being reduced to only one shift. GM was obligated to keep 16% of its production in Canada until 2016 in exchange for the $10.8 billion it received from the country during its 2008 bailout, and now has no plans to continue doing so.
According to local suppliers, who usually bid on new projects two to four years in advance, they haven’t heard anything from GM in regards to future products. If any new vehicles were planned for Oshawa, there’s a good chance suppliers would have already got wind of it. The automaker hasn’t said if it will close the plant, but with production of the next-generation Camaro moving to Lansing, Mich., the future is looking bleak.
The problem is few of the models which GM builds in Canada sell there in great numbers. Toyota and Honda build cars in Canada which are popular with consumers in the country, however GM sells only about seven percent of its Canadian-made vehicles in the country. Canada boasts a skilled, educated workforce, however a high dollar and cheaper labor in Michigan and Mexico makes it a less than ideal place for GM to build cars.
Canadian investment analysts say the Canadian government is too slow in making attractive offers to automakers in order to keep their manufacturing operations there. They are urging them to ask GM if they have plans to produce more vehicles there in the future, and to come to a mutual agreement to keep the jobs around if they don’t.
“Our competitors understand that a vibrant auto industry is at the center of a healthy economy and they are willing to invest,” said Greig Mordue, general manager of the Canadian Automotive Partnership Council. “The auto industry has huge capacity to generate jobs and because of that, the rest of the world is very active in this field.”