If General Motors was to shutter its operations in Oshawa, tens of thousands of jobs would be lost and the provincial and federal governments could be out $1 billion in potential revenue, according to Unifor.
The country’s largest private sector union released on March 30 an economic impact study into GM’s future in Oshawa, Ont., which revealed that should the two current plants shut down, the economic effect would be dire.
According to the study, prepared by the Centre for Spatial Economics, GM’s Oshawa operation supports tens of thousands of jobs, boosts the national Gross Domestic Product, generates vital tax revenues and even bolsters the Canada Pension Plan — all of which are commensurate with the automaker’s performance.
Should GM close, up to 24,000 jobs would be lost immediately, with almost 33,000 jobs lost in Ontario within two years. Eventual economic recovery would be dampened by a permanent decline in average wages, the study noted. As it stands, skilled trades and production workers at GM in Oshawa are some of the highest paid in the manufacturing sector.
As well, the federal and provincial governments could permanently lose close to $1 billion in revenue combined. Lost Canada Pension Plan contributions would lead to an increase in contributions or benefit cuts.
GM’s future in Oshawa is uncertain. With one of the plants slated for closure in 2016 and the other without any new vehicle production contracts (such as the Chevrolet Camaro, which the company recently announced will be produced in Lansing, Mich., instead of Oshawa), Unifor said new investment is necessary.
“The benefits to all Canadians are evident in this report. This underlines why Canada needs a focused strategy to win new auto investment, just like other countries have,” said Jerry Dias, Unifor’s national president, adding that, “This report is a call to action.”
But the outlook is not all grim — Unifor cited recent commitments that have bolstered the automotive industry, such as Chrysler’s move to invest $2 billion and build its hybrid minivan in Windsor.
“This study confirms that a major auto assembly facility like Oshawa is an economic anchor, generating enormous spin-off benefits felt throughout the economy,” added Jim Stanford, top economist at Unifor. “Workers, businesses and governments all enjoy a much stronger economic situation thanks to strategic manufacturing facilities like this one.”
There are 3,600 hourly production employees and 500 salaried staff currently working at GM in Oshawa.
© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.