Workers at the General Motors Oshawa assembly plant work on the Camaro model on Aug 28, 2013.Moe Doiron/The Globe and Mail
The future of the Oshawa, Ont., operations of General Motors Co. and about 3,700 jobs will be decided late next year, after a crucial set of negotiations with Unifor and discussions with governments that contributed $10.8-billion to a bailout of the company in 2009.
"We are going to be careful and are not expecting to be deciding on any major new mandates or investments in Oshawa until well into 2016," General Motors of Canada Ltd. president Stephen Carlisle said in a statement Wednesday.
Mr. Carlisle's statement is the first public acknowledgment by the auto maker that it has not yet allocated any new vehicles to Oshawa for production later in the decade. In the normal cycle of vehicle development and productions, new models would have been earmarked for Oshawa beginning last year and continuing through this year as the products now made there are discontinued or shifted elsewhere.
The statement does not eliminate the threat to the Oshawa operations, but several sources who have been worried about the future said it provides some hope that GM will continue to make vehicles in Oshawa later in the decade.
One of two assembly plants in Oshawa is scheduled to be closed next year. Production of the Chevrolet Camaro is scheduled to be shifted out of the other plant to Lansing, Mich., later this year while Buick Regal and Cadillac XTS production is scheduled to end in 2017.
As GM assesses whether it makes sense to continue assembling vehicles in Oshawa, negotiations with Unifor will be crucial.
"We must complete our 2016 union contract negotiations before we can make any final decisions," Mr. Carlisle said.
But it's expected to take at least two years after that to retool the plant and gear suppliers. So production of new vehicles in 2018 would mean lengthy downtime for several hundred employees.
Unifor president Jerry Dias said employees don't want to wait until 2016 for a decision.
"We need a message from General Motors prior to the Camaro leaving," Mr. Dias said Wednesday. The loss of Camaro production will affect about 850 people, said Ron Svaljenko, president of Unifor local 222 in Oshawa.
Mr. Dias, who met with Mr. Carlisle earlier this week, said he is encouraged by the tone of his comments, compared with those of his predecessor Kevin Williams.
"There was too much time, in my opinion, spent on negatives instead of the unilateral promoting of how good we are," he said.
The decision on new product allocation – and the contract talks with Unifor – will also be affected by negotiations between General Motors Co. and the United Auto Workers this year.
The UAW wants to eliminate the two-tiered wage system that allows the company to pay newly hired employees less than half what it pays longer-term employees.
Mr. Dias said the provisions of Unifor's 2012 agreement with GM allow them to hire new employees at a lower cost in Canada and the decline in the value of the Canadian dollar should give GM an even stronger incentive to invest in Canada.
Mr. Svaljenko said about 2,000 unionized employees in Oshawa will be eligible to retire by the end of this year. That gives GM huge potential to hire new employees who will start at $20.50 an hour and who must work for 10 years before reaching the full rate of $34.15 an hour.
Talks with the federal and Ontario governments will also be critical. GM Canada had a pension solvency deficiency of $3.7-billion as of September, 2013 – the latest data available – that it is required to eliminate over the next five years under current pension regulations. Negotiations with the government are likely to include some relief from that burden, such as stretching the payments out over 10 years.