General Motors’ planned $1-billion investment in its CAMI assembly plant brings much-needed stability to a workforce that had been seeking answers about the long-term future of the Ingersoll, Ont., facility over the last several years.
The investment will bring production of GM’s new EV600 all-electric commercial van to the plant starting later this year before fully kicking into gear. According to the local union, the vans will be built in an old body shop at the plant while Chevrolet Equinox crossover production continues until 2023, when the assembly line will be retooled to build the electric vans.
But big questions remain. The EV600 is a vastly different product than GM’s popular crossover, and it will compete in a market that holds promise but is unchartered territory for the Detroit automaker. And there are questions about how many vans the plant will produce after 2023 and how employment situation will unfold for many of the plant’s workers.
But as Kristin Dzcizek, vice-president of industry, labour and economics at the Center for Automotive Research, told me on Monday, building the EV600 means CAMI “is not competing with plants in Mexico anymore.”
The Equinox, of course, is also built at two plants in Mexico, a fact that was not lost on union leaders during negotiations with GM in 2017. That year, Unifor held a month-long strike at CAMI in an effort to have GM designate the factory as the lead producer of the Equinox globally, which the union hoped would help to secure jobs at the plant over the long haul.
GM, perhaps not wanting to give up production flexibility, had other plans. The strike eventually ended after the automaker threatened to pull Equinox production out of CAMI altogether, and Unifor never got the designation it was looking for.
Since then, a cloud of uncertainty has hovered over the plant. Would CAMI continue to build the Equinox after it is redesigned, likely in 2024? If not, what would replace it? Or would the plant be shuttered?
We now have our answers, several months sooner than expected. GM and Unifor quietly launched negotiations on Jan. 4, well before the previous contract was set to expire in September.
GM wants to get moving on its new BrightDrop commercial business — and fast. Work will begin immediately to allow production of the EV600 to start in November. GM already has orders for the new van lined up from FedEx and expects more customers to follow suit.
It’s not an unreasonable bet. Electric vehicles make a lot of sense for commercial buyers. Sam Fiorani, vice-president of global vehicle forecasting at AutoForecast Solutions LLC said most delivery vans drive short distances, making range anxiety almost a non-factor. Factor in EVs generally having less wear-and-tear than their gas-powered counterparts and the elimination of fuel costs, and it’s no wonder analysts expect demand for electric commercial vehicles to surge in the coming years.
As my colleague Hannah Lutz recently reported, GM expects the market for parcel, food delivery and reverse logistics to exceed US$850 billion ($1.08 trillion) by 2025 in the United States alone. Citing the World Economic Forum, GM expects demand for urban delivery to fulfill e-commerce orders to rise by 78 per cent by 2030.
That means the number of delivery vehicles on the road will rise, as will demand for electric commercial vehicles. And that’s good news for workers at CAMI. Obviously, more demand for the vehicles you build is always a good thing.
But how will EV600 production compare with Equinox production? It’s hard to say since that will depend on the number of orders GM gets for its new van.
Fiorani said the van is unlikely to match Equinox production. That said, rising demand over time would help, as would the potential addition of another electric van. According to a Unifor document highlighting the details of the new contract ““other variants” are “currently under study.”
“The promise of more should help them eventually become more stable,” Fiorani said.
It is also unclear how many skilled-trades workers will be needed at the plant moving forward. About 200 of the 1,900 workers at CAMI are skilled-trades today, but Unifor Local 88 President Joe Graves said initial job projections for skilled-trades members presented by GM to the union during negotiations were “quite low.”
So, Unifor are “looking at the possibility” of bringing in new parts for the plant’s stamping shop, which would require skilled trades members.
“We’ve got different things that we hope would bring jobs in-house,” he said.
While many details are left to be sorted out in the coming years, we now know CAMI is on solid ground. According to the union, the EV600 program is committed to CAMI for at least 10 years.
“We have a lot of young members with young families that need the security,” Graves said.