Tony Leah, GM worker and member of Green Jobs Oshawa Coalition speaks to activists and media outside the General Motors plant in Oshawa, Ont., on the final of production on December 18, 2019. The last vehicles of an era rolled out of GM Canada’s Oshawa assembly plant last week, but workers and the union behind them hope it’s not the end of the line. “We shouldn’t let go of the manufacturing capacity we have there,” said Tony Leah, who worked at the plant for 39 years before having to retire in early December. He’s part of a campaign advocating for government to take over the plant and produce electric vehicles. THE CANADIAN PRESS/Aaron Vincent Elkaim

The unclear path forward for Canada’s auto sector as the electric age approaches

Estimates say automakers globally will be spending US$255 billion to roll out 207 electric models by 2022

The last vehicles of an era rolled out of GM Canada’s Oshawa assembly plant last week, but workers and the union behind them hope it’s not the end of the line.

“We shouldn’t let go of the manufacturing capacity we have there,” said Tony Leah, who worked at the plant for 39 years before having to retire in early December. He’s part of a campaign advocating for government to take over the plant and produce electric vehicles.

The end of production at the plant, which assembled vehicles such as the GMC Silverado and Chevy Impala in the final years of its 66-year run, comes at a time of change and uncertainty in the auto industry as it grapples with slowing sales, trade disputes and the steep costs of transitioning production to electric and autonomous vehicles.

Analysts say that in this environment, there’s no clear path ahead for the Oshawa facility or Canada’s auto sector more generally, and it will have to be prepared to fight for the next generation of product commitments needed to sustain itself.

“It’s a very difficult task that Canada has,” said Joe McCabe, president of AutoForecast Solutions.

“But if they focus on the next evolution of the industry, which is this electrification and autonomy, I think that’s a stronger, long-term sustainable play for the Canadian space.”

McCabe sees conventional auto production in Canada as stable at best going forward, if not declining. The sector has already seen cutbacks in the past year at Ford’s Oakville, Ont., plant, Fiat Chrysler’s Windsor, Ont., plant, and of course GM’s Oshawa assembly plant.

He said the best bet for a major investment could be a new entrant, maybe from China, looking to get a North American foothold, but that it will take hard work and big money to lure a new plant to the province.

“The manufacturers have to be incentivized somehow to want to put that flag there.”

ALSO READ: No crude, but still rude: BC Hydro survey reveals conflict at electric vehicle charging stations

China-based Johnson Electric committed in late 2017 to invest more than $350 million in new equipment and capacity in the province focused largely on electric vehicle components, while the Ontario government agreed to chip in $24.1 million. BYD Co. Ltd. also committed to building electric buses in Ontario at the time, though financial details weren’t disclosed.

U.S. investments, meanwhile, will be hard to come by in the near term, said Kristin Dziczek, vice president of industry, labour and economics at the Center for Automotive Research.

“Right now, investments of any type, in the political environment we’re in, any investment outside the U.S. draws scrutiny.”

But while Canada’s auto industry hasn’t seen the major investments made in the U.S., like GM’s announcement of a US$2.3-billion battery plant in Ohio and billions of dollars to build an all-new electric pickup truck in Detroit, it should still see increases in electric production, said Dziczek.

Most companies will be ramping up from very low levels, while Toyota is expected to have the most production with a 77 per cent increase to 107,000 units by 2023.

The company says hybrid models of its RAV4 and Lexus RX already account for more than 20 per cent of its Canadian production, and that it will also start producing the Lexus NX hybrid in 2022.

“We’ve made significant investments in our facilities to enable them to produce electrified vehicles,” said Stephanie Pollard, vice president of Toyota Motor Manufacturing Canada, in a statement.

Green Jobs Oshawa, the group Leah is a part of, would like to see the Oshawa plant also get into the electric race, with an aim to produce about 150,000 electric vehicles over five years focusing on postal trucks and other federal vehicles.

While great in theory, the chances of it happening are slim to none, said Unifor president Jerry Dias.

“That would be wonderful, but it’s not going to happen.”

Instead, Dias is focused on making sure GM maintains the integrity of the plant and invests in the test track it has promised, so the plant is ready for potential future production that could be lured there by the advanced infrastructure in the area.

“If GM is going to have a test track to use to test out their autonomous and electric vehicles, that will be designed and engineered in Markham, the natural next step is, why wouldn’t you build a car?”

GM has committed $170 million to transform the plant into an auto parts manufacturing operation and build the track, but it hasn’t made any commitments to future vehicle production. It has focused lately more on its technology research and development in the region.

“In times of change, it’s best to focus on the future,” said Scott Bell, president and managing director of GM Canada in a letter on the plant’s closure.

Electric vehicle commitments are just one of the many issues Dias will take into contract negotiations next year with the Detroit three automakers. Electric vehicles remain a sliver of the market, and could still be only about five per cent of sales in 2025, according to Unifor’s estimates.

But it will certainly be an increasingly pressing issue going forward. Management consultant AlixPartners estimates automakers globally will be spending US$255 billion in research, design and capital expenditures and roll out some 207 electric models by 2022.

“It’s inevitable, it’s happening, and so you want to be on the forefront of that, you don’t want to be lagging behind,” said Dias.

He said government will need to work with industry to lure new commitments for the next generation of automobile assembly to keep a bedrock of Ontario’s economy healthy.

“All of the auto companies are talking about the inevitable transformation, and I agree with them, there will be an inevitable transformation. The question becomes, what’s Canada’s role in the transformation.”

Ian Bickis, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

RCMP seek public’s help in identifying suspects responsible for keying cars in Castlegar

At least three cars have been keyed in north Castlegar in the last 24 hours

Young farmers find a home through land-matching program

Young Agrarians links would-be farmers with landowners who have land to spare

Morning start: A history of the Arrow Lakes

Here is your Kootenays’ morning start for Wednesday, May 27

Castlegar residents can now report minor crimes to RCMP online

New reporting tool available for Castlegar, Robson, Ootischenia, Thrums, Deer Park, Glade, Tarrys

B.C. legislature coming back June 22 as COVID-19 emergency hits record

Pandemic restrictions now longer than 2017 wildfire emergency

Facing changes together: Your community, your journalists

The COVID-19 pandemic has changed the world in ways that would have… Continue reading

B.C.’s essential grocery, hardware store employees should get pandemic pay: retail group

Only B.C.’s social, health and corrections workers are eligible for top-ups

Edmonton, Vancouver and Toronto vying to be NHL hubs, but there’s a catch

The NHL unveiled a return-to-play plan that would feature 24 teams

B.C. sees 9 new COVID-19 cases, one death as officials watch for new cases amid Phase Two

Number of confirmed active cases is at 244, with 37 people in hospital

Nanaimo senior clocked going 50 km/hr over limit says her SUV shouldn’t be impounded

RCMP say they can’t exercise discretion when it comes to excessive speeding tickets

Illicit-drug deaths up in B.C. and remain highest in Canada: chief coroner

More than 4,700 people have died of overdoses since B.C. declared a public health emergency in early 2016

CMHC sees declines in home prices, sales, starts that will linger to end of 2022

CMHC said average housing prices could fall anywhere from nine to 18 per cent in its forecast

B.C. Paralympian named to Canada’s Sports Hall of Fame

Three-time world and Paralympic gold medalist Sonja Gaudet is part of 11-member class

Most Read