General Motors Co. will reopen its vehicle assembly plant in Oshawa, Ont., to meet rising demand for pickup trucks, spending as much as $1.3-billion to retool the factory it closed last year.
The first vehicles, GM’s best-selling GMC Sierras and Chevrolet Silverado pickup trucks, will roll off the line at the plant east of Toronto in 14 months, employing as many as 2,300 people beginning next summer, said Jerry Dias, national president of the Unifor union.
GM closed the Oshawa assembly line last year, putting about 3,000 people out of work as the car maker shut down other plants in the United States and stopped making poorly selling vehicles in a push toward hybrid and electric models. The sprawling Oshawa site has remained largely empty, making after-market car parts and pandemic face masks with 300 workers.
The company said its new models of pickups are highly popular now, and refitting the plant to make more of the trucks will help it meet the increase in demand.
“We never gave up hope and neither did General Motors,” Mr. Dias said. “I know many of our members have suffered. Many have moved on. Many have not found new jobs. So today is an incredible victory for all of us.”
Most of the money will come from GM, Mr. Dias said, and there are talks with the federal and Ontario governments about taxpayer contributions similar to those announced recently for Ford Motor Co. and Fiat Chrysler’s Ontario plants.
Dan Carter, mayor of Oshawa, said he has been in frequent touch with GM executives and Unifor, lobbying government and pitching ideas in hopes the plant would see new purpose and the jobs would return. But it wasn’t until he received a cryptic text from a GM executive at 4:30 a.m. on Thursday that said he was about to become the “happiest mayor in Canada” that he realized the assembly line would reopen.
The jobs will provide an economic and psychological boost to the city and region, which has watched thousands of good-paying auto jobs move to Mexico and other low-cost areas.
“I’m just absolutely ecstatic about the announcement,” Mr. Carter said by phone. “Especially with COVID-19, a lot of people have been impacted economically. We’ve always had a great spirit of overcoming hurdles in the past, but this announcement at this time in this historical moment will play a significant role in how people feel right now, and how they see the future.”
Construction work at the factory will begin immediately, including a body shop and a flexible assembly line. “Pickups are GM’s largest and most important market segment in Canada and across the continent,” said Scott Bell, GM Canada’s president. “They also help GM fund our transition to the electric, autonomous and highly connected future we see ahead.”
The announcement is part of Unifor’s three-year collective agreement with GM, subject to ratification by members, that includes new investments at the St. Catharines and Woodstock facilities. Union members will vote on the deal on Sunday.
The news caps a round of negotiations between Unifor and the three Detroit-based car makers. It has resulted in collective agreements that secure large investments and new vehicle production for plants whose futures have been in doubt. Ford said it will spend $1.8-billion to retool its Oakville plant to build battery-electric vehicles. Fiat Chrysler will invest about $1.3-billion to make hybrid and plug-in vehicles in Windsor, Ont.
“Not bad - bargain $5-billion during a pandemic,” Mr. Dias said of the total spending commitments by the automakers. “I’ve been watching the industry and I know they are moving toward electric vehicles. We needed to get a footprint here in Canada so we can start to develop a supply base for electric vehicles. But we needed a short-term solution in Oshawa … and that’s going to be pickup trucks. Then we’ll start talking about what the future looks like.”
Brian Kingston, head of the Canadian Vehicle Manufacturers' Association, said recent commitments to Ontario by the three U.S.-based companies represent about $4.8-bilion in spending and 3,700 new jobs in a pandemic that has done vast economic and public health damage. This is a recognition, he said, of Ontario’s long history of making vehicles, its skilled work force, strong supply chain, access to the U.S. market and governments' willingness to spend taxpayer money to ensure auto plants provide well-paid work.
“Ontario is not going to compete with a jurisdiction like Mexico on labour costs, but we have other advantages,” Mr. Kingston said.
Flavio Volpe, head of the Automotive Parts Manufacturers' Association, credited the new auto plant investments in Ontario to provisions in the recently renegotiated North American free-trade agreement, now known as the United States-Mexico-Canada Agreement. The pact, effective in July, 2020, expanded levels of tariff-free local auto content to 75 per cent from 62 per cent, which requires car makers to source more parts locally.
The old Oshawa plant made Chevrolet Impala sedans and finished pickup trucks, but the new one will completely assemble trucks, “the entire enchilada,” Mr. Dias said. “There will be government money, but those conversations are just starting,” he said by phone.
John Power, a spokesman for Industry Minister Navdeep Bains, declined to comment on federal aid for GM, but said, “we have demonstrated that we are prepared to support the future of our auto sector.”
GM said it will hire 1,400 to 1,700 hourly workers on two shifts for the new plant, on top of the 300 working on after-market parts. Mr. Dias said 175 people on layoff will be recalled, and he has been told of a possible third shift, which would add another few hundred jobs.
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