CAW to fight Oshawa closing

Jun 03, 2008

Business Reporter

General Motors will halt production at its Oshawa truck plant next year and probably won't reopen it again because of the collapse of pickup sales in the U.S., chairman Rick Wagoner said today.

The move, which shocked the auto-making city of Oshawa, will eliminate the equivalent of another 1,000 jobs at the plant.

Nerarly 6,000 workers are still employed at GM's Oshawa car plant.

Wagoner said GM will stop output at four North American truck plants including the Oshawa operation which produces the gas-guzzling, full-size Chevrolet Silverado and GMC Sierra models.

There was this immediate reaction: - “We are going to fight this decision,” Canadian Auto Workers president Buzz Hargrove declared at a news conference.

“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.”

Asked what the union’s response would be, he said: “Watch us.”

- Ontario won’t hesitate to recoup part of a $175-million provincial loan to General Motors earlier than planned in the wake of the automaker’s decision, Premier Dalton McGuinty said today.

It’s early yet, but the loss of 1,000 jobs — the latest blow to Ontario’s ailing manufacturing sector — likely means GM will be in violation of one of the conditions of the loan guarantee, McGuinty said.

The province invested $235 million with GM’s Beacon project in 2005, $60 million of which went to universities for research and development and the balance to GM for its Oshawa operation.

The agreement included minimum job levels at the truck plant, McGuinty said. “If those jobs go below a certain level, they’ll be in breach of the agreement and we’ll enforce that.”

Hargrove said GM committed in writing to produce pickups in Oshawa through the life of the new collective agreement which was ratified only two weeks ago.

He said the automaker also promised that Oshawa would build a new generation of light-duty trucks to be introduced in 2011 or 2012.

“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.”

He urged the federal government to refuse to allow sales in Canada of General Motors trucks made elsewhere if the closure goes through.

“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.”

Retired GM worker Dave Boissoin drove his silver GMC Sierra truck to the plant to show his support this morning when he heard the news.

Boissoin, 50, retired two years ago "so they could keep the plant running and the younger guys could keep working. This is shocking. now they're going to close the whole place down."

Boissoin, who has a nephew, brother and sister working in the plant blamed GM for the latest job cuts.

"They have to know oil's going to go to $200 a barrel, they just wanted to make money on the big vehicles. It's shocking how unprepared they really were."

Robert Nichol, 41, got off the night shift at the car plant at 6:30 a.m., but stayed around to show his support.

"The younger guys in the car plant know they'll lose their jobs because the older guys from the truck plant will get them. It's a shock, especially after we just settled the contract. Everybody was finally relaxed and now all our lives are on hold."

Soaring fuel prices and the plunge in the U.S. housing market have devastated pickup sales south of the border.

Wagoner revealed the company has not allocated any new models at the four plants and it is "unlikely" they will reopen again, Wagoner said.

GM will keep other truck plants open in the U.S. and shift development money to smaller cars, he added.

In addition to Oshawa, GM also confirmed it is closing operations in Ohio, Wisconsin and Mexico.

Wagoner noted the company believes the decline in big pickup and sport utility vehicle sales is not temporary.

Forecasters have said they expect fuel prices to continue climbing and see no relief at the pumps in the near future.

GM did not disclose when it will shut down the Oshawa plant next year.

"We've been told it's sometime next year," said Keith Osborne, plant chairman for the Canadian Auto Workers Local 222. "It's hard to believe but it's true. It's a mess here this morning."

GM, Canada's biggest auto maker, already cut a shift in January and planned to eliminate a second shift this fall at the plant.

However, the Canadian Auto Workers and GM agreed recently that instead of laying off another 1,000 workers, employees on the two remaining shifts would share the remaining jobs. Under that arrangement, employees would work two weeks and then take two weeks off and collect employment benefits.

The plant is one of the most efficient truck plants in North America and ran on three shifts for more than a decade before sales began sliding significantly last year.

Ford has revised its earnings forecasts and also cut production in recent weeks because of the slumping market.

The CAW is holding two news conferences today on its plans to fight the closure in Oshawa.

With files from Carola Vyhnak

thestar.com