GM's plant in Oshawa, Ontario, is slated to close in 2017. However, CEO Mary Barra is talking with the union about it.
General Motors is open to discussing the fate of the company’s assembly plant in Oshawa, Ontario, with the Canadian Auto Workers during the upcoming contract negotiations this summer.
Even as it pours more investment in GM plants in Mexico, the company’s current product plans call for leaving the Oshawa plant vacant by the end of 2017.
However, Mary Barra, GM chairman and chief executive, told reporters in Detroit prior to the company’s annual meeting that GM had what she described as “constructive” discussion with Unifor, the union that represents Canadian autoworkers employed by GM.
Given the nature of the talks, Barra said she was not prepared to discuss what will happen next in Oshawa, which has been the center of GM vehicle production in Canada for nearly a century.
GM is preparing to expand its research and development capacity in Canada by hiring nearly 1,000 engineers and technicians, according to reports in The Toronto Globe and Mail and Toronto Star. The announcement of the new hiring spree in Canada could come as soon as today.
Barra also said GM expects to continue operating at an under utilized assembly plant in Orion Township outside of Detroit. GM remains committed to building vehicles at Orion, Barra said. “Orion is part of our manufacturing footprint,” said Barra, who grew up in Waterford Township and started her GM career at a GM installation in nearby Pontiac.
Despite slow sales of the products it builds, GM's Orion, Michigan, plant remains a key component of GM's manufacturing plans.
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Barra noted the Orion plant will start to build the new Chevrolet Bolt electric vehicle before the end of the year. “We also believe we have leadership role in electric vehicles,” Barra said, adding the new Bolt will extend GM’s leadership in the small, but growing EV market.
The Orion-built Bolt will sell for about $30,000 and is expected to have a range of 200 miles, which is about twice the range of its closest battery-driven competitor.
However, the market for electric vehicles, while growing, is still relatively small, roughly 2% of the U.S. market and sales of the other gasoline-powered at Orion have declined sharply during the last 24 months. GM dropped to one production shift at Orion in January due to a decline in sales of the subcompact Chevrolet Sonic and GM recently disclosed the it plans to end production of the Buick Verano, which is also now built at plant.
Employment at the plant has been cut in half from roughly 2,200 two years ago to 1,100 today, according to the latest figures from GM. The figure includes 950 hourly employees and 150 salaried employees.
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GM also announced it was shifting some $225 million in investment capital from the Orion plant to another GM assembly plant in Kansas City, Kansas.
“Clearly there is more of a challenge on smaller vehicles,” said Barra, who acknowledged building small cars isn’t as profitable for GM as building larger vehicles.
“We look at Orion is a very strong and very strong quality,” she said.
GM originally opened the Orion plant in the early 1980s and over the years its fortunes have risen and declined with the course of sales across the U.S. auto market.
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The Orion plant came close to shutting permanently in 2009 during GM’s bankruptcy but was saved by the combination of an experimental labor contract that included union concessions, federal aid and state and local tax breaks.