Unifor, GM announce $170M investment in Oshawa plant that will bring 300 jobs

TORONTO – The union representing Canadian auto workers claimed a partial victory Tuesday after General Motors Canada announced an Oshawa, Ont., plant slated to close later this year will be converted to a part-stamping and autonomous vehicle testing facility.

Unifor and GM Canada said the transition will cost $170 million and save 300 of the 2,600 union jobs at the plant, with the potential to attract more jobs as the facility attracts new customers.

GM Canada president Travis Hester, who announced the so-called “Transformation Agreement” alongside Unifor national president Jerry Dias, said the Oshawa site will still end vehicle production at the end of 2019.

However, 22 hectares of the facility will be converted into a test track for autonomous and other advanced vehicles, which Hester said will help expand the nearby Canadian Technical Centre.

“I want to send a strong and positive message from GM to the people of Oshawa,” he said. “With our Canadian headquarters, our sales and marketing organization, the OnStar support centre, the Oshawa engineering centre, and the new announcements just mentioned here, GM plans to be one of Oshawa’s leading companies and employers for many decades to come.”

Dias, whose union suspended a media campaign against GM in March amid what it called productive talks with the automaker, called the agreement “innovative” but admitted it was far from a perfect solution.

“What I do know is you play the cards you’re dealt and you make the best out of a bad situation,” he said. “I will suggest that instead of us facing a hard closure in December of this year … we have an understanding between the parties of a long-term commitment.”

Tweet This Click to share quote on Twitter: "What I do know is you play the cards you're dealt and you make the best out of a bad situation," he said. "I will suggest that instead of us facing a hard closure in December of this year … we have an understanding between the parties of a long-term commitment."

WATCH: Oshawa GM plant to remain open, but smaller. Sean O’Shea reports.

1:49 Oshawa GM plant to remain open, but smaller

Dias said the agreement will help keep the company in Oshawa over the next decade.

“This announcement, though it may not have a lot of jobs as we sit here today in May, there’s going to be a heck of a lot more in December,” he said. “There’ll be more next year. There’ll be more the year after as we continue to attract work.”

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A joint statement from GM Canada and Unifor said the company will offer relocations to other facilities in Ontario for those affected, as well as “enhanced retirement packages” to 1,300 eligible employees.

WATCH: Unifor president says GM changes both ‘success and failure’

1:10 Unifor president says GM changes both ‘success and failure’

Industry observers said the automaker’s decision to repurpose the Oshawa plant could mark a turning point for the auto sector in Canada.

“GM has a real strong R&D centre in Oshawa and another one in Markham working on autonomous and electric vehicle issues,” said auto industry analyst Dennis Desrosiers. “Putting a test track in gives those jobs more security … but also potentially a real possibility of more jobs on the intellectual side of the industry.”

Federal Economic Development Minister Navdeep Bains said the government is encouraged by the announcement.

“Just yesterday, Oshawa’s autoworkers were facing a completely uncertain future,” he said in a statement. “Today, GM has committed to providing work for hundreds of them at the plant and to supporting the others, and we want to see it through.”

WATCH: Economic Development Minister Navdeep Bains says GM announcement ‘encouraging news’

1:30 Bains says GM announcement ‘encouraging news’

Ontario Economic Development Minister Todd Smith said in a statement that the province welcomes the agreement, calling it good news for the City of Oshawa and the surrounding region.

“We are glad this historic site will continue to be a hub for vehicle parts manufacturing, technological innovation and regional economic growth,” Smith said.

However, he acknowledged that many workers still face an “uncertain future,” saying the government is working with Unifor and GM to support affected employees and their families.

Christo Aivalis, a labour relations expert at the University of Toronto, said the deal is a victory for the union, which launched a months-long public relations campaign against GM.

“I think Unifor was able to tap into a sense that these are good jobs for Canadian workers and GM has, for a long time, had a lot of loyalty from Canadian consumers,” he said. “Maybe (GM) saw real pressure from Unifor and that trickled down into the general public and they felt that there was real risk that a total closure would cause real brand damage.”