Of all the possible outcomes regarding the announced end to vehicle production at GM’s Oshawa Assembly plant, I don’t think many people anticipated this particular scenario.
According to John Irwin’s most recent story about Oshawa 2.0 — news that first broke at automotivenews.ca — the plant that currently builds the Chevrolet Impala and Cadillac XTS, and completes the final assembly of the previous-generation Chevrolet Silverado and GMC Sierra, will become a stamping plant. In effect, it becomes a supplier, potentially to other suppliers.
This is indeed a divergent business model for GM, but at this point the precise motivation is unclear. Does GM really want to go down this path, or is it making the best of a miserable public-relations situation? The arguments complement each other. Oshawa has expensive stamping equipment that otherwise would have been collecting dust once vehicle production ends, and it’s in the company’s best interest to throw Canada a bone, this one to the tune of $170 million to convert the plant for stamping and retain about 300 employees. Bear in mind that this hardly saves Oshawa, per se, since it currently employs about 2,600 people. In the 1980s, the number was about 23,000.
GM’s accompanying “at-least” 10-year commitment to the footprint does, however, indicate an honest stab at being a supplier. And although there appears to be zero plan to bring new-vehicle assembly back to the plant anytime soon, the 10-year commitment keeps hope alive that the once-award-winning facility could again churn out vehicles. A lot can happen in 10 years. With the accompanying announcement of an on-site autonomous-vehicle test track (part of the $170-million investment), it seems natural that Oshawa Assembly could one day build those vehicles, in whatever form they take. If GM’s announcement is intended to keep its options open, that’s probably a smart play.
The downside, at least for the city of Oshawa, is that GM’s decision kills the idea of a plant sale to another automaker, or a company such as Magna that hinted Oshawa Assembly — or a site like it — could work as a low-volume-vehicle contract-assembly plant. In that regard, hope for thousands of new jobs appears to be gone.
The big win for GM, however, is that the decision — announced after discussions with Unifor — effectively gags the union’s negative-GM press (for the time being). That alone might be worth $170 million.