General Motors has decided to walk away from its last auto-assembly plant in Oshawa, Ont. The Detroit-based company made the announcement November 26 that it would idle five plants in North America and cut around 14,000 jobs. The prime reason? Donald J. Trump.
Importantly, I have some advice for politicians and ordinary citizens in Alberta, who have been in the midst of an epic, nation-shaking tantrum about the province's insistence it must have a pipeline to "tidewater," and have it now.
Be very, very careful about acting as if this plant closing no big deal. It is a big deal -- although not as big a deal as it once would have been because GM has been scaling back its Canadian operations for a long time.
When GM closes its final plant in Oshawa, a company that at the start of the century operated half a dozen auto assembly plants in Canada, it will have only one left in this country. That's CAMI Automotive in Ingersoll, Ont., which bolts together the Chevrolet Equinox and GMC Terrain, small SUVs, from a basket of components cobbled together all over the world.
"The Motors," as its known in the industry, also still has a transmission plant in St. Catharine's, Ont. But that will be it.
In its heyday, GM employed about 40,000 people in Canada. Now, that number is just over 8,000, and is set to fall by nearly half.
So when the dust settles, General Motors of Canada Co. will not be much more than the Canadian retail-marketing arm of what was once the undisputed largest automotive manufacturing corporation in the world. GM is now fourth in production, after Toyota Motor Corporation of Japan, Volkswagen Group of Germany, and Hyundai Motor Group of South Korea.
Canadians have been manufacturing wheeled conveyances in Oshawa, 60 kilometres east of Toronto along the north shore of Lake Ontario, since 1876. Sam McLaughlin founded the McLaughlin Motor Car Co. there in 1907, and it and McLaughlin alike became part of GM in 1918. (He became a vice-president of the parent company, and as rich as stink.)
Assembly plant jobs are considered to be among the best jobs in the auto industry, bringing with them as they do a middle-class salary and, historically, a certain amount of job security.
So, yes, this is a big deal.
Albertans need to be even more careful about acting as if this is just an inevitable and healthy functioning of the market and that governments, especially the one in Ottawa, ought not to be "picking winners and losers" in places like Oshawa. Not, at least, unless they're prepared also to say they think the federal government shouldn’t intervene to push the Trans Mountain Pipeline through to the West Coast on the strength of a questionable business case.
And for heaven's sake, Albertans shouldn't argue that the loss of 3,000 direct jobs and heaven knows how many indirect ones in one city of 160,000 souls is just a market functioning as it should, but our bitumen bubble is a "market failure." Ditto, it would be undiplomatic to compare job loss numbers, which may be larger in Alberta, but are unlikely to be much impacted by pipeline building. This would not only be crass, it would be stupid.
Worst of all, of course, would be to crow about it as if central Canada in general and Oshawa in particular deserve the hit because we're put out about something else.
Count on it, there will be people in Oshawa who will say fairness demands Ottawa should intervene to ensure the plant continues to operate, and given the economics of the Trans Mountain Expansion Project and the political capital Prime Minister Justin Trudeau has expended on it, they will have an argument.
Mark my words, though, some Albertans will not be able to resist temptation, and no good will come of it.
Another thing we can count on -- mea culpa -- is that commentators will look for someone to blame. Conservatives will soon be blaming Trudeau, of course. New Democrats and Liberals in Ontario will blame Premier Doug Ford -- this is a stretch too, given the timing, but he will have to wear bad things that happen on his watch just as Alberta's NDP has had to wear low world oil prices because that's the way things work in politics.
Already on social media I have seen some of the usual suspects from "non-partisan" conservative blaming the Oshawa autoworkers' union, Unifor.
This is big stretch, because as long as the Canadian loonie trades at a discount to the greenback, Canada is an excellent place to build cars. It has a well-educated workforce, a structural advantage built into the currency, and public health care, a huge money saver for corporations in an industry where unions are commonplace. These factors mean that cars have usually cost less to make in Canada than the U.S. despite slightly higher per-hour wages.
That's part of the story of why big Japanese automakers have opened and expanded assembly plants here in Canada -- including CAMI, which started out in 1986 as a joint venture of GM and Suzuki Motor Corporation. And it's why Roger Smith, president of GM from 1981 to 1990, invested U.S. $90 billion around the world to modernize the company, and put significant amounts of it into the complex of new plants in Oshawa.
But Trump, whom it would be fair to describe as an enemy of Canada, has changed all that.
The U.S.-Mexico-Canada Agreement struck at the end of September may just be NAFTA 2.0, but the folks on the executive floors of GM Headquarters in the Renaissance Centre in Detroit can read the handwriting on the wall just as well as we can.
So watch your step if you’re an Albertan who thinks it's cool to wear a MAGA cap and show your affection for Trump. If you get noticed, you won't be doing Alberta any favours.
This post also appears on David Climenhaga's blog, AlbertaPolitics.ca.
Image: Camera Eye Photography/Flickr
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