TORONTO — Early Wednesday, the odds of vehicle assembly ever returning to the birthplace of the Canadian auto industry seemed to be slim-to-none.
But today, it’s not too difficult to see production resuming in Oshawa, Ont., several years down the line.
GM on Wednesday said it would invest $170 million in the Oshawa plant to build aftermarket parts, as well as to do stamping work for CAMI Assembly in Ingersoll, Ont., and possibly for suppliers. A test track will also be built on the site.
Most importantly, the plant will be maintained. Instead of sitting idle, assets such as Oshawa’s valuable paint shop will be maintained, “infinitely” raising the potential that Oshawa could eventually be selected for new production mandates, as Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, told me.
Keeping the plant operational would make it cheaper for GM to eventually bring production back. And it’s possible such a move would cost GM very little.
Its Spring Hill, Tenn., plant, for example was idled in 2009 amid the automaker’s bankruptcy, but was brought back to life in 2011. How much did it cost GM to bring back the plant? Just US$61 million, chump change for the automaker. And that’s despite building a model that the factory never assembled before.
As my colleague Lindsay Chappell noted back then, that’s in large part because GM spent $700 million on the plant in 2006 so that it could more flexibly change what models it built.
As it just so happens, GM completed a $500-million investment in Oshawa in 2018 that made it capable of building both cars and light trucks.
To be clear, there are no obvious production mandates for Oshawa in the foreseeable future. Unlike Spring Hill in 2011, when GM was emerging from bankruptcy in a growing new-vehicle market, the automaker has plans to cut back on its model lineup amid declining sales and low car demand.
But should GM eventually need to add North American capacity, Oshawa could be a prime location to do so.
That’s cold comfort for the thousands of workers who will be out of work by year’s end. But Oshawa’s future is much brighter today than virtually anyone would’ve thought back in November.