GM Oshawa closure – a sign of the disruption to auto manufacturing

chevy boltAfter the November 26 bombshell announcement that the GM plant in Oshawa will close at the end of December 2019, Unifor President Jerry Diaz has demanded that GM allocate product to the Oshawa plant, putting his faith in the newly-signed USMCA trade agreement and stating  “Oshawa has been in this situation before with no product on the horizon and we were able to successfully make the case for continued operations.”  But in a CBC interview, “Why can’t they make the future in Oshawa?‘”(Nov. 27),  the Canadian Vice President for Corporate and Environmental Affairs states firmly that there is no hope for further production in Oshawa.  “This decision has to do with simply being able to make the transition to the future and reallocate capital into the massive investments that are needed for electric vehicles and autonomous vehicles.” He forecasts that about half of the existing Oshawa workers will be eligible to retire with enhanced full pensions, some (but not all) others may find work at GM plants in Ingersoll or St. Catharines, and the rest will be covered by whatever compensation, benefits and timing is negotiated with their union, Unifor.  In a more recent CBC article, “GM Canada president says electric vehicles are the future — but they won’t be made in Oshawa” (Dec. 4), the president reiterates that there are no changes planned for the CAMI plant in Ingersoll or the St. Catharines facility, and points to the growth of the new GM Canadian Technology Centre opened in Markham in January 2018, which has already hired approximately 450 software engineers and coders, with plans to hire more.

Although Ontario Premier Ford somehow blamed the previous government’s cap and trade policies for GM’s decision, others are recognizing the GM closure as part of the disruption and transformation of the auto industry.   From the Energy Mix, “GM Plant Closure Shows Industry Transition Catching Canada, Ontario Flat-Footed” (Nov. 30) ; (also of interest: “Lost Opportunities Show Cost of Canada’s Moribund Cleantech Manufacturing Strategy”   (Nov. 30), which discusses the dilemma of electric bus manufacturers in Canada).  In “GM and Canada’s transition to a zero-emissions fleet”  in IRPP Policy Options (Dec. 3) , author  Ryan Katz-Rosene of the University of Ottawa  states that  “ the 20th-century auto-sector model (in which a handful of global automakers commanded the market and much of the supply chain associated with it) is pretty much dead now.” The article asks, “Where does this leave Canada in terms of its preparedness to participate in the 21st century automobile sector, which is largely centred on electric and autonomous vehicles? And, what role (if any) should governments, at all levels, play to improve Canada’s industrial positioning in that sector?”   And Barry Cross of Queen’s University asks “Have we reached peak car?” in The Conversation (Dec. 2) – a quick view of the future of autonomous vehicles and car sharing.

Good news and bad news about electric vehicles: B.C. mandates, Oshawa plant closing

Electric vehicles Wikimedia Commons 768x512The Good News: British Columbia:   In the latest encouragement to electric vehicle ownership in British Columbia, the Premier announced on November 20  that he will introduce legislation in Spring 2019 to phase in targets for the sale of zero-emission vehicles in the province –  10% ZEV sales by 2025, 30% by 2030, and 100% by 2040.  This will be accompanied by funding to expand charging infrastructure, and for consumer incentives in addition to the existing incentives under the Clean Energy Vehicle program . The new policies are  in line with the Intentions Paper on Transportation,  part of a public consultation in Summer 2018.  (For background, read  “Fuelled by strong demand, B.C. adds $10 million to electric vehicle incentive program” (Sept 27) and “B.C. proposes mandate for electric vehicles”  (July 27), both in the National Observer.) Mandates for EV sales are already in place in Quebec, California, and other U.S. states.

gm oshawaThe Bad news: Ontario:  Mandates for EV sales in the U.S. was part of the modernization strategy  by General Motors in its comments  to the U.S. government under the  Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule on October 26, 2018.  According to the  National Observer  at the time, “Transport Canada welcomes GM’s electric car plan”. Apparently, Transport Canada didn’t know what was in store.  As of November 26, GM’s  global modernization strategy came crashing down on Ontario auto workers – announced in the November 26 corporate press release:  GM Accelerates Transformation . The brief and unexpected press release names the GM Assembly plant in Oshawa Ontario as one which will be “unallocated” in 2019, along with  Detroit-Hamtramck Assembly ( Detroit) and Lordstown Assembly (Warren, Ohio). The Toronto Star makes the connections in “GM plant closure in Oshawa part of company’s shift to electric, self-driving autos”   (Nov. 26) .

Unifor, which represents approximately 2,500 GM Oshawa workers who will lose their jobs, was only informed of the decision one day ahead of the public announcement, and has stated  : “Based on commitments made during 2016 contract negotiations, Unifor does not accept this announcement and is immediately calling on GM to live up to the spirit of that agreement.”  Ontario’s Premier Ford issued a statement  saying: “As a first step, I will be authorizing Employment Ontario to deploy its Rapid Re-Employment and Training Services program to provide impacted local workers with targeted local training and jobs services to help them regain employment as quickly as possible….we are asking the federal government to immediately extend Employment Insurance (EI) eligibility to ensure impacted workers in the auto sector can fully access EI benefits when they need them most….We are also asking the federal government to work with their U.S. counterparts to remove all tariffs so that impacted auto parts suppliers can remain competitive after the Oshawa Assembly Plant closes its doors.”

 

 

Extended Producer Responsibility reduces waste and impacts the workplace

Cutting the wasteThe October 16  report from the Ecofiscal Commission ,  Cutting the Waste: How to save money while improving our solid waste systems  is a thorough examination of the issue of waste management in Canada, and while it discusses consumer behaviour (including single use plastics, briefly), the main focus is on municipal programs of disposal pricing ( tipping fees and  “pay as you throw”)  and Extended Producer Responsibility (EPR).

Extended Producer Responsibility (EPR) programs shift the costs and responsibility for waste management from taxpayers and consumers to manufacturers.  Cutting the Waste  recommends expanding and harmonizing Canada’s EPR programs, stating…. “ “extended producer responsibility” programs … can improve the efficiency of recycling programs while also creating incentives to produce goods that generate less waste or goods that can more easily be recycled.”  The report provides a good overview of the history, structure, and efficiency of EPR programs in Canada, stating that there are over 120 such programs (both voluntary and legislated) in Canada, following an EPR Action Plan which was  developed through the Canadian Council of Ministers of the Environment (CCME) in 2009. Their most recent progress report on the Action Plan was conducted in 2014 .  The Ecofiscal Commission highlights British Columbia as having the most stringent and comprehensive plan, and states, “Alberta is the only province that does not have legislated extended producer responsibility (EPR) programs and is falling behind in its commitments under the Canada-wide Action Plan for EPR.”  EPR Canada , a non-profit association, also publishes Report Cards – their most recent was released in 2017.

How does waste management translate into a greener workplace?  The automobile manufacturing industry provides a Canadian example, and in its 2011 Fact Sheet  “Taking Back our Jobs – Taking Back our Environment “ , the Canadian Auto Workers endorsed EPR, with concise arguments,  stating “The future job creation potential is enormous. The motor vehicle industry is one of the best examples of EPR job creation.”   (The Fact Sheet was republished by Unifor in 2013,  here).  From the company, the GM Landfill-free Blueprint (2018) makes a business case for reducing waste and includes the concept of employee engagement.

In September 2018 , one of  Canada’s Clean50 awards for 2019 went to the General Motors Assembly plant in Oshawa Ontario for its “zero waste to landfill” project   .  The announcement states:   “At the core of the success of General Motors Landfill-Free Project at GM Oshawa Assembly Plant initiative lies the fact that the “team” for this project numbers approximately 3,000.  …. it was the employees at the plant who were directly and indirectly part of the successful implementation of their project.”

According to a GM press ( February 2018) ,GM is now diverting 100 per cent waste from landfills at all Canadian manufacturing facilities;  St. Catharines Propulsion facility since 2008,  and CAMI Assembly since 2014.  The St. Catharines facility is also the proposed site of  Ontario’s first complete renewable landfill gas industrial co-generation system, which will use landfill gas from an offsite source, delivered via pipeline, to generate electricity and  reduce the greenhouse gas emissions from the plant by more than 77 per cent. More details are here .  A caveat: although this project was projected to come online in mid-2019, it  was initiated under the previous Liberal government,  funded by cap and trade revenues through GreenON Industries, which is one of the programs cancelled by the current Conservative government.

Business and government gather at Climate Week NYC

Many publications and press statements were released to coincide with Climate Week NYC 2016, a gathering of businesses and government officials in New York City from September 19 – 26. A sampling brings some insight into business/climate thinking. For example,  General Motors  was one of several companies joining the energy campaigns of RE100 , a global initiative of companies committed to transitioning to 100% renewable power.  (A sister campaign, EP100, works with businesses committed to doubling their energy productivity) . GM’s stated goal  to  meet 100% of its electricity needs with renewable energy by 2050 includes about 350 facilities in 59 countries, including both manufacturing and non-manufacturing buildings .  The CEO is quoted as saying that GM wants to contribute to cleaner air  “while strengthening our business through lower and more stable energy costs.”  Further, in GM Details its  100% Renewable Goal  : “Renewable energy offers more stable pricing options than traditional energy sources like fossil fuel, reducing the price volatility caused by external threats like government relations and natural disasters. Wind energy is already price competitive with traditional forms of energy and we expect the price of solar power to continue to decrease as demand grows.” Related reading: GM’s 2015 Sustainability Report and its environmental blog, GM Green .

From CDP (formerly Carbon Disclosure Project) , Embedding a carbon price into business strategy  : based on responses from over 5,000 companies, the report states that 1,200 companies either plan to or currently place an internal price on carbon.  Why?  Could be the cost of capital, as signalled in the Forward: “As public pension funds, CalSTRS and AP4 have hundreds of thousands of members and stakeholders relying on the secure retirement future that we are here to provide in perpetuity—it is absolutely critical that we take action to guard against this risk [climate change]…..“As the momentum for full disclosure in this area increases, we will not only be looking at company emissions but also analyzing how climate risk mitigation is embedded within their corporate strategies. Those companies who show investors and owners that they take this issue seriously and have a plan in place to tackle it will enjoy a lower cost of capital in the future against those that don’t.”

Consultants EY and the UN Global Compact published a report, The State of Sustainable Supply Chains,    based on interviews with 70 companies.  From the introduction: “Over the past few years, sustainability has been added to the procurement and sourcing criteria for many companies. Workforce health and safety incidents, labor disputes, geopolitical conflicts, raw materials shortages, environmental disasters and new legislation in areas such as conflict minerals and modern slavery have contributed to the growing awareness of supply chain risks among customers, consumers, investors, employees and local communities.”…. Overall, the results of the study show that by improving environmental, social and governance (ESG) performance throughout their supply chains, companies can enhance processes, save costs, increase labor productivity, uncover product innovation, achieve market differentiation and have a significant impact on society.”   This report is complemented by the website:  UN Global Compact Sustainable Supply Chains: Resources and Practices .  

In October, CDP North America released a report discussing the “paradigm shift” in the importance attributed to the “total cost of ownership”, or life cycle of products.  With examples from the U.S. military and the IT industry, it concludes that “It has become a business necessity because it saves money, smooths operations, diminishes risk in supply chains and opens new business opportunities.”  See: A paradigm shift in total cost of ownership From procurement to product innovation:How companies are hardwiring sustainability across the value chain to future-proof their business.