Thursday , May 19 2022

Media frenzy emphasizes the importance of closing the Oshawa GM plant


Oshawa, Ont., Has been synonymous with making cars in Canada for over a century. This is the "City Motor" of this country.

So, when the news last Sunday lost that General Motors intend to close the assembly plant there by the end of 2019, giving about 2,500 people out of work, the news media jumped into force. The main television networks circulated anchor to Oshawa, where Andrew Chang, Lisa LaFlamme and CBC CTV broadcast their split weekly Monday lunches on Monday out of the spectacular industrial complex.

"Tonight: Stop down the auto of the Canadian auto industry. General Motors closes a shop at Oshawa, Ont.," Ms. LaFlamme as she led the newsletter with a rhetoric flint, standing under a remarkable GM sign.

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The Globe and Mail and other newspapers also provide large teams of correspondents and columns (including the one) on the story.

The message of the wall broadcast to this wall suggests that this bad news is a hit hit the Canadian economy.

And, yes, the closure of a plant becomes unlikely to be horrible to the city of Oshawa, the workers affected, its vast network of suppliers and tens of thousands of people who rely on the economic triggers. And, certainly, not a good omission to the Canadian auto auto sector.

But Oshawa is not a "auto" auto industry in Canada. It used to be, but it has not been for at least a decade. Oshawa has become a symbol of a past, rather than to be present.

Montreal Bank economist Robert Kavcik said: "The auto sector has been slowly reducing the economy of Ontario over time, and the Oshawa GM plant is an example of that."

Canada is home to eight vehicle assembling plants, all of them in Ontario. And of those, Oshawa is the smallest of a long way. Not even the largest GM factory in the province. That honor belongs to a GM CAMI plant in Ingersoll, 175 kilometers to the west of Toronto. CAMI, who does the Chevrolet Equinox SUV, produces twice as many vehicles as Oshawa does.

The largest in this country is the Honda assembly plant at Alliston, 90 kilometers north of Toronto. It produces more than 400,000 Civic and CRVs per year – approximately four times the output of GM in Oshawa. The largest two largest Canadian plants are Toyota in Cambridge and FCA Canada (the old Chrysler) in Windsor.

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The Oshawa plant accounts for just under 6 percent of the total vehicle production in Canada, including the Chepala-Impala assembly and the Cadillac XTS. Much of the rest of the work that it involves involves painting and finishing vehicles that have been brought together in other Canadian and US plants.

Vehicles and manufacturing parts directly account for about 1 per cent of the gross domestic domestic product of Canada, and 2.3 percent of the GMC Ontario, according to BMO. That is half what the industry contributed to the province's economy in the late 1990's.

The Ontario auto sector output marketed in 2005 and has dropped by 22 per cent, recovering only half of what was lost in the recession in 2008-09, according to BMO. And GM has made much deeper cuts than the rest of the industry.

"Ontario continues to move away gradually from basic manufacturing, towards more valuable production [and] research, "said Mr Kavcic in a research note. And that's also the car industry, he added.

Canadians who watch this week's news may have a totally different impression of the significance of the closure of Oshawa, for the end of 2019.

In the longer term, the importance of the GM regeneration of Oshawa will depend on whether it is reliable for the rest of the motor industry, or is sympathetic to the company's efforts to remain relevant in the global car industry. GM has stopped closing the Oshawa plant – one of five announced this week – as part of an effort to redirect investments towards self-driving vehicles and electric vehicles. That is unfortunately because what the company really does is gradually go out of the business of making sedans, in favor of gas trucks and SUVs.

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So the ruling remains on what all this means for the rest of the sector in Canada.

But the media is illegal by treating Oshawa as if it represented the entire Canadian industry. The numbers make it clear that it is not.

For 100 years General Motors has been producing cars at Oshawa, once at home to one of the largest assembly plants in the world. But now GM says they are planning to close their Oshawa operation as part of a global restructuring.

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