A proposal to convert GM Oshawa to electric vehicle production under public and worker ownership

gm oshawaTriple Bottom Line Preliminary Feasibility Study of the GM Oshawa Facility: Possibilities for Sustainable Community Wealth was released in September 2019 by Green Jobs Oshawa  – a coalition of workers, community leaders, environmentalists, labour and social justice advocates whose goal is to  re-purpose the soon-to-be-shuttered GM Oshawa auto assembly plant “for socially beneficial manufacturing.”

The call to convert GM Oshawa to electric vehicle production has been made before – notably by Sam Gindin, as part of a Lucas Plan-style conversion, and by journalist Linda McQuaig, most recently in her new book The Sport & Prey of Capitalists . But the new Triple Bottom Line feasibility study fleshes out these goals with facts and figures: it  estimates that a  public investment of $1.4 to $1.9 billion would be required to acquire and retool the Oshawa assembly plant for Battery Electric Vehicle (BEV) production, which, when supported by government procurement of the vehicles, would result in financial break-even by year 4, and create over 13,000 jobs (up to 2,900 jobs in parts supply and manufacturing) and over 10,000 multiplier jobs.

The Triple Bottom Line study was written by Russ Christianson,  a consultant and active proponent of worker cooperatives. He uses “a triple bottom line evaluation”, including: 1. an economic analysis of the current and future auto industry market, capital investment required, skills and equipment available at the GM facility and in the community, and the potential new products that could be manufactured. 2. Social needs in the Oshawa community for well-paid, dignified work , and 3. “How production at the plant can address the defining issue of our times, climate catastrophe”.

Some Highlights from the report: 

“By paying a good wage to auto workers – this study proposes the existing GM Oshawa tier 1 wage of $35 per hour for assembly workers – it will be possible to gain the workers’ commitment by investing in their jobs through shared-ownership of the new organization.”

“Governments will need to negotiate alongside the workers and community to gain public ownership of the GM Oshawa plant. The financial forecasts include a start-up investment of $10,000 from each of the workers combined with community investment for a total of $37.5 million in Scenario 1, and Scenario 2 estimates $25 million in investment from workers and the community.”

“By the end of year 5, the forecasts show that BEVs will represent 30 to 40 percent of these governments’ total fleets, except for Canada Post, which (like the U.S. Postal Service) is expected to replace the majority of their delivery fleet vehicles with BEVs.”

The CBC reported on the launch of the feasibility study on September 21 in “Autoworkers at GM’s Oshawa plant ask feds for more than $1B to build electric vehicles”  and included commentary from supporters and detractors.  In support, the article quotes from an email by Olivier Trescases, head of the University of Toronto’s Electric Vehicle Research Centre,  which stated: “I think that aiming for government owned EV fleets and electrified public transportation is strategically very important and more logical than trying to produce passenger cars though a Crown corporation.”

GM Oshawa investment will save 300 jobs; Toyota announces new production in Cambridge

GM May 2019On May 8, General Motors Canada and Unifor held a joint press conference and  issued a statement  announcing that GM will invest $170 million to save approximately 300 of the 2,600 union jobs at the Oshawa Ontario manufacturing facility, slated for closure by the end of 2019 as part of  the North American restructuring announced in November 2018.

After a vigorous and high profile union campaign against the closure, an “Oshawa Transformation Agreement” has been reached, including:

  • A $170 million investment by GM to convert the plant from vehicle assembly to stamping, related sub-assembly, and “other miscellaneous activities for GM and other auto industry customers.”
  • Part of the Oshawa Plant property will be converted into a test track for autonomous and advanced technology vehicles, to  support GM Canada’s existing  Canadian Technical Centre , in particular its Oshawa and Markham campuses where the company  develops software and hardware for Autonomous Vehicle Systems, Embedded Controls, Active Safety Systems and Infotainment.
  • The company will also donate the three-acre Fenelon Park and the 87-acre McLaughlin Bay wildlife preserve to the City of Oshawa “for the permanent benefit of all its citizens.”

But what about the workers?

A separate Jobs Transition Backgrounder states:

  • GM Canada will offer special relocations to Oshawa employees for jobs at the St. Catharines propulsion plant or the Woodstock Distribution Centre;
  • GM will offer enhanced retirement packages to retirement-eligible Oshawa Assembly employees “including vouchers toward the purchase of new GM vehicles, a benefit that will support both retiring employees and GM dealerships in Durham Region and surrounding areas.”
  • In June 2019, GM Canada, Unifor and the Ontario government will open a Jobs Action Centre in Oshawa, offering  personalized transition counselling, a skills / jobs matching database and “other supports.” Durham College, the local community college,  will support the Job Action Centre with a dedicated jobs portal and several job fairs planned for 2019.
  • Durham College, Centennial College, and Trent University Durham will offer training tailored to regional and GTA-based partner employers.
  • “GM Canada will offer training support for qualified Oshawa Assembly hourly employees.” (no further details stated in the public release).

Unifor Local 222 , which represents the workers at the Oshawa plant, have called a meeting on May 9 to inform the membership about the resolution of their grievance against the company, which sought to increase incentives and severance packages.

In better news for Ontario’s auto industry:   Starting in 2022, Toyota will begin to produce the luxury  Lexus NX at its Cambridge plant, in both gasoline and hybrid versions . ( Cambridge currently produces of the mid-size luxury Lexus RX and RX hybrid). According to a report in the  Hamilton Spectator : “Prime Minister Justin Trudeau, Deputy Ontario Premier Christine Elliott, and a host of local mayors and dignitaries were at the Fountain Street facility Monday afternoon to announce the plant had secured the right to make the company’s Lexus NX gas and hybrid compact SUVs starting in 2022. The news came almost a year after the federal government partnered with the province — at the time led by Kathleen Wynne and the Liberals — to each invest $110 million in the company as part of an overall investment of $1.4 billion by Toyota.”

Reports on the future of Ontario’s auto industry: one by experts, one by the Ontario government

future of auto industryIn The Future of Canada’s Auto Industry , released on February 26, co-authors Charlotte Yates and John Holmes assess  the sector’s current state – focusing on trade agreements and technological innovation –  and recommend a suite of policies to boost competitiveness and avoid plant closures, especially timely in the aftermath of the “shocking” closure announcement of GM Oshawa.  Although concentrated in Ontario, the industry is important nationally: “The automotive industry contributes significantly to Canada’s economic prosperity through investment, employment and technological innovation. Currently, it is Canada’s second largest manufacturing industry, adding $18.28 billion a year to GDP, $86.58 billion a year to Canadian exports (17% of total merchandise exports), and employing over 126,000 people directly and half a million people indirectly.”

The authors acknowledge the importance of the future trend to electric and autonomous vehicles, and propose a green industrial policy with targeted supports for companies that commit to building green vehicles sustainably. They point out current  shortages of skilled workers and the aging workforce in the industry, and call for   a workforce development plan that will invest in engineering, technical and data analytic skills, including trades and apprenticeships and income supports for skills retraining towards a just transition for workers.  They acknowledge the challenges of global competitiveness and the need for research and development, and call for financial incentives, including tax credits and grants, and better access to capital for small- and medium-sized Canadian technology companies, as well as more focused R & D investments. In general, they call for deep collaboration between the federal and Ontario government, rising above bureaucratic and jurisdictional interests.  Flagged as the most important condition for future success for the industry:  “government policy needs to prioritize the North American automotive platform centered on the Great Lakes. Canada–U.S. auto production and trade could be further integrated to create even greater competitive advantages of efficiency associated with a larger regional production footprint. Canada continues to need preferential tariff access to the American market for finished goods for this model to succeed.”

The Future of Canada’s Auto Industry was published by the Canadian Centre for Policy Alternatives.  A summary article which appeared in the Toronto Star on February 26,   “Electric, driverless vehicles key to survival of Canada’s auto industry ” gives short shrift to the trade relationships and the complex global dynamics of the auto industry, which figure more prominently in the actual report.  The authors, John Holmes and Charlotte Yates, are both members of Canada’s Automotive Policy Research Centre (APRC), with long and deep knowledge of Canada’s  auto industry.

autostrategy_2019Ontario government discussion paper recommends less red tape and “pro-jobs labour reforms”: 

In a second report, the same issues are discussed but with much different emphasis and level of analysis.  The Ontario government’s  discussion paper, Driving Prosperity: the Future of Ontario’s Automotive Sector  was released in February under the “Open for Business” mandate.  The government describes the paper as:  “… a 10-year vision for how industry, the research and education sector, and all three levels of government, can work together to strengthen the auto sector’s competitiveness and bring new jobs to the province.”  In the introduction, the government states “We are driving prosperity in the industry and creating a pro-jobs environment by cutting red tape, eliminating the cap-and-trade carbon tax, allowing businesses to write off job-creating capital investments faster, and
embracing pro-jobs labour reforms.”

Although the government report acknowledges technological disruption and trade issues as challenges, there is no direct mention of the GM Oshawa plant closing – and in fact, most of the statistics provided are from 2017.   The issue of retraining and skills upgrading is raised in the general context of changing technologies, stating: “ We also want to minimize the disruption caused to workers and their families by technology and production mandate changes. We need to find new ways to respond to complex challenges. We need to establish new relationships with government partners in labour and academia to help Ontarians find faster and smarter training solutions.”

 

Can greener strategies like a Lucas Plan work for GM Oshawa?

gm oshawaReaction to the November 2018 announcement by GM that  it was closing five production plants in North America has been ongoing – as the WCR last reported in December in “GM Oshawa closing – A sign of the disruption to auto manufacturing”.  Unifor, the union representing most of the affected auto workers, has organized a vigorous  Save Oshawa GM campaign , involving demonstrations and rallies; a plant walkout on January 8;  a boycott of GM products, including a boycott of GM cars made in Mexico    (launched on January 24); and a television ad campaign which will include air time on the Super Bowl broadcast.  Unifor also  commissioned an independent economic impact study which found that the closure of GM would  result in an immediate decline of $5 billion in Ontario’s GDP and a subsequent loss of $4 billion per year to 2030.  Both federal and provincial revenues would shrink, and  job losses are projected to reach 14,000 in Ontario and a further 10,000 elsewhere across Canada by 2025.  Unifor President Jerry Diaz has met with Ontario Premier Doug Ford, but Premier Ford’s January 14 press release , “Ontario Advocates for Auto Sector Jobs and Investment”, is silent on the GM closure. Federal Economic Development Minister Navdeep Bains and Premier Ford both met in separate meetings with GM executives during the Detroit Auto Show in January, but did not soften the company’s position .

What role can greener strategies play? :  High time for a green jobs strategy in Ontario” in the National Observer (Dec.24) states: “Ontario is correct in supporting the transition of Oshawa plant employees with unemployment and retraining measures, accelerating the return to work of displaced workers. A more strategic approach by Ontario would have been an early response to GM’s prior suggestion that its Oshawa production was guaranteed only until 2020, for example, by creating strategic retraining opportunities in alignment with emerging industries.”

Several newspaper columnists have taken up the idea of re-tooling the Oshawa plant- beginning with David Olive’s immediate reaction to the announcement  in the Toronto Star in November, “It’s time for a truly Canadian automaker”;  Linda McQuaig  in the Toronto Star with  “Trudeau should consider buying GM and making electric cars”; and most notably, Jennifer Wells in the Toronto Star on January 15, “For the GM Oshawa plant, hope is not a strategy” .

Wells has based her brief article on a much more thorough piece by Sam Gindin “GM Oshawa: Making Hope Possible , which appeared in the Socialist Project newsletter, The Bullet, on December 13.  Gindin is a veteran of the labour movement and Ontario’s auto industry, having served as the CAW’s Research Director from 1974 to 2000. He argues that the current reactions are a dead end, and  “larger, more radical aspirations [are]the only practical way out.” He proposes a “Plan B”, under which “the facility and its equipment should be placed under public ownership with no further compensation – the plant and its equipment have already been paid for by the sweat of workers and the $3-billion in unpaid subsidies from taxpayers.” Workers could stage “periodic industrial actions”, including “days of action” and possibly occupation of the plant, to prevent GM from removing its equipment.  And what to do with the plant in the future?  Gindin proposes a New Lucas Plan , following the model of the famous industrial conversion project in the 1970’s, when U.K. labour unions met management’s plans to restructure and cut jobs at Lucas Aerospace with worker-generated proposals to re-tool and produce socially-useful products, using their existing skills.  Among the unions’ proposed products – in the 1970’s !! – were heat pumps, solar cell technology, wind turbines and fuel cell technology.  Gindin’s 2019  list of socially-useful products includes the energy-related products that our current climate change crisis requires.

In the U.S.,  some of these same ideas appear under the “Green New Deal” label. The Detroit Green New Deal is a coalition of labor, environmental, and community groups protesting the GM  plant closures; participants include the Democratic Socialists of America, two groups from Unifor Local 222 (the Oshawa local), Sunrise Michigan, Good Jobs Now, and many others.   Their “rallying cry” is “Make Detroit the Engine of Green New Deal”, and their Official Statement   calls for  GM to honour its labour contracts and its legal and moral commitments by keeping all the plants open, creating more union jobs, and contributing to the building of a green economy.  If GM does not agree to keep the plants open, Detroit Green New Deal demands that the plants be seized and put to public use (similar to Gindin’s “socially- useful products”).

Looking beyond the GM workers and their immediate predicament, the Detroit Green New Deal coalition demands “a Green New Deal that takes us on a path to rapid decarbonization of the economy, implements a federal union jobs guarantee, and ensures a just transition for workers, people of color, the poor, and other marginalized groups.”  These demands are more focussed , but reflect the social justice principles behind Sam Gindin’s closing argument: “…thinking outside the box, engaging in larger struggles and actively involving our members in the discussions and strategizing over what to do and how to do it, carries the promise – or at least the potential – to revive our movement. There is no other way to overcome the demoralization of so many of our members, move to set aside the destructive divisions between unions that are such a barrier, and play the kind of social role that can excite a new generation of leaders and activists.”

Bringing these arguments home to the issue of climate change and work, and the tensions of the green economy,  is the 2010 article, “Can trade unions become environmental innovators?: Learning from the Lucas Aerospace workers” . Authors Nora Räthzel, David Uzzell, and Dave Elliott  concluded with: “We believe that drawing on the Lucas experience – trusting in and building on workers’ skills and desire to produce something useful for themselves and the environment, developing strategies with workers (technicians, and academics), instead of for them – would create a greater chance for the realisation of socially and environmentally just policies.”