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GM closure an example of technical changes ‘disrupting’ Canadian industries: expert

Last shift wraps at Oshawa GM plant, line shuts down
WATCH: Last shift wraps at Oshawa GM plant, line shuts down

The General Motors assembly plant in Oshawa, Ont., shuttered this week, ending an era for the motor city. Experts say the closure of the plant, which led to layoffs affecting thousands of workers, signifies more than just that.

Craig Alexander, chief economist at Deloitte Canada, told Global News the Canadian labour market is “doing well,” but technical changes are affecting workers.

“A lot of workers are being affected by technical changes that are disrupting business models as a result.”

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“We have a lot of workers that are ultimately going to need to be retrained, develop new skills, so that they can move into the industries that are experiencing the strongest job growth in the future,” he added.

GM announced in November last year that it would wind down production at the plant, which has been in operation since 1953, while the company first started producing vehicles in the city east of Toronto in 1918. The closure means about 2,600 unionized employees will lose their jobs, though about 300 are being saved through a $170-million investment by GM to turn part of the operation into a parts plant.

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GM workers watch final truck roll off the line
GM workers watch final truck roll off the line

READ MORE: GM identifies jobs, training programs for workers impacted by Oshawa assembly plant closure

Alexander said having workers who are losing jobs and need to retrain can be “detrimental” to the Canadian economy.

“We’ve actually seen globally in things like Brexit and the rise of Trump … that when people get left behind, they become frustrated that the system, the establishment isn’t working for them, they want political change — and sometimes those changes are not healthy,” he said.

While technological changes in the economy have always been present, increasing global competition for business makes it more difficult for workers to keep up, the economist noted.

“I think what we’re seeing is fundamental change in the structure of the Canadian economy,” Alexander said. “When we look at industries driving growth, it isn’t the industries that drove growth in the past.”

GM prepares to shutter Oshawa plant after more than 100 years in the ‘Motor City’
GM prepares to shutter Oshawa plant after more than 100 years in the ‘Motor City’

Greig Mordue, an associate engineering professor at McMaster University, highlighted the change that’s occurred specifically with the Oshawa GM plant.

“At one point in time, Oshawa made a million cars a year. It was responsible for about a third of the automotive production at its peak year,” he said. “Oshawa has had a long, slow, difficult come-down from those peak years.”

Mordue noted Canada’s auto industry doesn’t necessarily have to get left behind.

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“You can build electric vehicles, once you decide how you want to build them, in any location,” he said, noting the same is possible for autonomous vehicles.

READ MORE: GM retirees crushed following Oshawa plant closure

However, Mordue acknowledged that laid-off workers will have difficulty adjusting to the change, retraining and finding jobs.

Roy Eagen is one of those parts workers. Walking out of the plant on Wednesday, his eyes welled with tears, both from the biting cold wind and the emotions of the day.

“It was rough, it was pretty depressing,” he said of watching the last truck frame go down the line.

GM has been working to help employees find other jobs, while about 1,200 of the employees qualify for full retirement packages.

GM Canada VP looks ahead to future of company in Oshawa
GM Canada VP looks ahead to future of company in Oshawa

“The employee base that we’ve had over the years has accomplished so much, and we owe it to them to help them transition as best we can,” said David Paterson, vice-president of corporate affairs at GM Canada.

He said it was a sad day, but with Oshawa only operating at about a third of capacity and no vehicles ready to assign to it, the company felt it had to wind down production.

Along with the parts conversion, GM is also building a track at the Oshawa facility to test electric and autonomous vehicles as part of a major transition in the auto industry.

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READ MORE: GM employees unsure of new vision for automotive plant in Oshawa

The auto giant said this month that several employers have identified about 2,000 jobs that will become open in Durham Region in 2019 and 2020 — many of them related to the refurbishment of the Darlington nuclear power plant southeast of Oshawa.

The company has also identified 300 openings for auto technicians at GM dealerships in Ontario and 100 jobs that will be open at other GM facilities in Ontario.

Paterson said the company would ensure its employees get retraining. Durham College is expected to establish a confidential internet portal in the new year to help auto workers identify job openings and begin plans to take retraining courses offered by a consortium of colleges.

GM employees reflect on the day the company announced the closure
GM employees reflect on the day the company announced the closure

Don Lovisa, the president of the college, explained that several companies have reached out saying they need employees.

“Companies approach us and say we need people, train these people, tell them about our jobs, we’ll hire them,” he told Global News.

He acknowledged, however, that it will be a challenge for older workers to retrain or in some cases return to school, and then settle in to new jobs.

— With files from Global News’ Jeff Semple and the Canadian Press

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