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Old November 21st, 2005, 11:58 PM   #1
marek bielski
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What is the future for Oshawa and St.Catharines?

GM cutting 3,900 Ontario jobs, Oshawa and St. Catharines plants to close

General Motors plants in Oshawa and St. Catharines, Ont., will shut down as the automaker announced Monday it will close or cut back 12 North American facilities and slash 30,000 jobs as part of a plan to return to profitability.

GM (NYSE:GM) chairman and CEO Rick Wagoner said the third shift at GM Canada's Number 1 plant in Oshawa will be cancelled in the second half of 2006, while the Number 2 plant will be closed in 2008.

The Number 1 plant in Oshawa builds the Chevrolet Monte Carlo and Impala models. The Number 2 plant currently builds the Pontiac Grand Prix and the Buick LaCrosse/Allure models, but they are to be phased out in 2008 and GM has not scheduled a new product to be built at the facility.

Speaking in Detroit, Wagoner also said the St. Catharines powertrain plant on Ontario Street will cease production in 2008.

The closures mean about 3,880 jobs will be lost in Canada. The Oshawa Number 2 plant closure will mean 2,750 jobs will go, while 1,000 jobs will be lost with the end of the third shift at Oshawa Number One plant.

Closure of the powertrain plant in St. Catharines will cost about 130 jobs.


General Motors had about 20,000 employees in Canada prior to the latest cuts.

Canadian Auto Workers president Buzz Hargrove called the cuts "devastating", noting that the fallout will extend to Canadian parts suppliers who feed GM plants.

But he said he was hopeful that early retirement packages and attrition could absorb most or all of the job cuts at GM.

In the United States, the following assembly plants will be closed:

Oklahoma City, Okla., in early 2006.
Lansing, Mich., in mid-2006.
Spring Hill, Tenn., at the end of 2006.
Doraville, Ga., in 2008.

The third shift at the company's Moraine, Ohio, assembly plant will be cut in 2006.

Other GM plants affected by the cuts include:

The Lansing, Mich., metal centre closing in 2006.
The Pittsburgh, Pa., metal centre ending production in 2007.
A parts distribution centre in Portland, Ore., shutting in 2006.
A parts distribution centre in St. Louis, Mo., which will be converting to a collision centre in 2006.
A parts processing centre in Ypsilanti, Mich., closing in 2007.
One additional parts processing centre, to be named later, shutting in 2007. The Flint, Mich., North 3800 engine facility ceasing production in 2008.

GM chairman and CEO Rick Wagoner.
GM facing production glut

Wagoner said the closures and shutdowns will cut the company's annual production capacity by one million vehicles to 4.2 million unit a year by 2008.

GM's plants were reported to be operating at 85 per cent capacity, well below the plants of its Asian competitors.

Faced with falling demand and market share, and over-capacity at its manufacturing facilities, Wagoner said GM needed to make cuts.

"These actions are necessary for GM to get its costs in line with our major global competitors," Wagoner told employees.

"In short, they are an essential part of our plan to return our North American operations to profitability as soon as possible," he said.

Canadian Auto Workers president Basil "Buzz" Hargrove.
Wagoner said Monday that GM is aiming to cut its costs by about $7 billion US by the end of 2006. That goal is about $1 billion US higher than its previous target.

GM lost almost $4 billion US through the first nine months of this year as it struggled to cope with its myriad of problems, which include high costs for labour, pensions and health care.

The company's struggles have prompted rumours that GM might file for bankruptcy protection, but Wagoner told employees last week that the company had no such plans.

FROM Mar. 2, 2005: Ontario, Ottawa commit $435M toward huge GM investment

GM Canada's $2.5 billion Beacon Project, which is aimed at upgrading its Ontario plants and boosting research, is unaffected by Monday's announcement.

Shares of GM were off almost 2 per cent on the NYSE, dipping 47 cents to $23.58.
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Old November 22nd, 2005, 12:20 AM   #2
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Ah they'll be fine. Being part of such a large region helps absorb much of the negative impact. They arent one horse towns out in the middle of no where.

The closing of the Oshawa Number Two is kind of odd though considering it continuously wins awards for top quality in North and South America. Politics probably played a roll in that regard.
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Old November 22nd, 2005, 12:39 AM   #3
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I think this will have a more harmful effect to St Kitts than Oshawa since GM I believe the largest employer to St Kitts. A few years from now the St.Catharines school board will be the largest employer and that's a bad sign.

But! For me every bad thing is a good thing. Now St.Catharines and Oshawa will have large land available for new companies. Usually in Hamilton when a factory closes a year or two later some other company comes around and buys the property, cheaper that way for companies to start up. So hopefully that will happen to St.Catharines and Oshawa.
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Old November 22nd, 2005, 12:59 AM   #4
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Well the Oshawa plants are the the best plants (quality) they have in the world.... but they're in the wrong country aren't they?
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Old November 22nd, 2005, 01:04 AM   #5
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No wait this is a gonna have a more harmful effect to Oshawa than St Kitts since St Kitts is only going to lose 130 jobs well Oshawa will lose thousands.
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Old November 22nd, 2005, 06:07 AM   #6
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It won't have a devastating effect on St. Catharines, but use the whole multiplier effect and I think some small businesses around the GM plant (specifically restaurants, pubs) may see some dips in their sales.
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Old November 22nd, 2005, 06:30 AM   #7
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either
1. There will be a small drop in the local economy that they will recover from in 2-5 years.
2. Or the GTA will have their first Detroit style ghetto.

The first is most likely, but the second would add a new side to Toronto...whether it's good or not is another question.
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Old November 22nd, 2005, 07:28 AM   #8
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Anyways, it does not look good for Oshawa at all. Imagine all the secondary jobs being lost as the result of these layoffs. This area will have some lean years ahead.
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Old November 22nd, 2005, 06:44 PM   #9
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I live in Oshawa and this is a very scary thing. Hard to beleive because they just finished building plant 2 last year (i think). However the city is becoming less and less reliant on GM. Personally i only know 1 person who works at GM. Most people that i know, beileve it or not commute into Toronto for jobs. This is going to hurt no doubt, but this is not as bad if it had happened 20 years ago
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Old November 22nd, 2005, 07:26 PM   #10
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It could be worse. The government could have foced their towns power plant to shut down, eliminating 55% of it's tax base, and completely devastating the economy. Then, the government would have had to spend billions on relocation projects. At least that isn't happening!

You'll recover.
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Old November 22nd, 2005, 09:32 PM   #11
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Quote:
However the city is becoming less and less reliant on GM.
Any time you attract big business which will "save the day" all you (as a city) have done is guarantee a hard time will come down the road.

Personally I would rather see the Ontario Government give out $1B in small business grants to try and grow locally rather than giving $1B to Toyota or something.
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Old November 22nd, 2005, 10:44 PM   #12
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i agree completely
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