GM’s Oshawa closure raises questions on Canada’s future in green auto sector: experts

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General Motors transitioning to electric, self-driving cars: executive
WATCH: General Motors transitioning to electric, self-driving cars, executive says – Nov 26, 2018

After more than 60 years, General Motors announced Monday it’s closing its Oshawa, Ont., plant, saying the company is shifting its focus from traditional vehicles to electric and autonomous cars.

The auto company said it’s closing the Ontario plant as well as four other facilities in the U.S., as part of a global restructuring move to lower carbon emissions and prepare for the future of robot vehicles — a sector that GM is hoping to dominate.

The Oshawa plant, which employs nearly 2,500 people, currently assembles traditional vehicles, like the Chevrolet Impala, Cadillac XTS and Chevrolet Equinox. But all the employees will now be out of work as of December 2019.

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Oshawa GM workers react to 2019 closure

GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures,” the company said in a statement.

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In October, the company rolled out a zero-emissions plan in the U.S., which included adding more than seven million electric vehicles to U.S. roads by 2030.

“General Motors believes electric, self-driving, connected vehicles and shared mobility services will transform how we get around, and we are drawing the blueprint to advance our vision of a world of zero crashes, zero emissions and zero congestion,” the company stated on its website.

And GM isn’t the only auto company wanting to be a player in the self-driving car field. Because the technology is expected to dominate the future of transportation, companies like Ford, Honda, Hyundai, Telsa and even Amazon and Apple are hoping to get a slice of the self-driving car pie.

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Will GM to move its greener vehicle production to Oshawa?

On Monday, Federal Minister of Innovation Navdeep Bains was asked whether GM will move its fuel-efficient vehicle strategy to the Oshawa facility, considering a highly-skilled labour force still remains.

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“We have a world-class labour force … the decision that General Motos has made is one of global restructuring. This isn’t the only plant being closed … from our perspective, we will continue to engage with them and work with them,” Bains said.

WATCH: Navdeep Bains speaks about General Motor’s decision to shut Oshawa plant

William Mitchell, a professor of strategic management at the Rotman School of Management, said he does not believe the company will manufacture green vehicles in Oshawa.

“It’s going to take a new plant and different skills,” he said. “It’s like a renovating house: you have to ask yourself if it’s easier to renovate or build a new one.”

Will Canada be a player in the self-driving, electric vehicle sector?

Chrysler, Ford, Honda and Toyota have auto plants in Canada, all of which are located in Ontario.

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Joe McCabe, president and CEO of consulting firm AutoForecast Solutions, said there could be a silver lining in the plant closure as GM refocuses its efforts on new vehicle technology.

“For the last several years, Canada specifically has been saying we want to be the Silicon Valley of the north, and we’re seeing a lot of manufacturers leverage the strong workforce and highly educated workforce of Canada, to say maybe this is where we want to put more of our technology base, our mobility,” McCabe said.

“Everyone’s pushing into this autonomous space that is years away from its full adoption but you’re going to see these mature countries such as Canada, I think, being a better player.”

Mitchell believes Canada has the technology in this field, calling the country the “hotbed of artificial intelligence technology,” but we still have yet to translate it into jobs.

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“It’s going to take policy, investment and education; we still need to create that bridge from technology to jobs. And unless we get that policy and strategy in place, it will be China rather than Ontario that will get the green jobs.”

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Mitchell said it’s up to the companies in Canada, like Toyoto, Honda and GM, to invest in the green technology and take risks in the sector.

China competing in the green auto field

Mitchell said there is also a regional reason GM is closing down plants in Canada and the U.S. — production is down here.

“Production is up in China, India and Mexico,” he said. “China is now the world leader in renewable energy and have made a huge investment in battery cars. They are pushing hard on this technology.”

He said if Canada wants to play in the same field, we are going to have to make sure we make the right investments.

Nelson Wiseman, a professor of political science at the University of Toronto, agrees.

He said India and China have emerging markets to which the auto industry is starting to pay attention.

“We [North Amerca] still have a big market here, but ours is not growing as fast and costs are higher here,” he said.
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“The issue isn’t about electric cars, the issue is about geography. Why are plants being shut down in Canada and the U.S. and not shutting down in Mexico and China? It’s cheaper to produce cars there and that is where the market is.”

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