VIDEO: Auto Parts Sector To Take Hit With GM Announcement
The head of the Automotive Parts Manufacturers' Association of Canada is expressing concern that General Motors is planning to shut down its operations in Oshawa as part of a global restructuring.
Flavio Volpe says the move would have a serious impact on companies that supply the plant with parts, tools and die.
Volpe estimates that business is worth between $3 and $4-billion dollars each year.
Speaking to CTV News, Volpe says this was not a blindside to people close to the situation.
"Certainly industry analysts are not completely surprised, you see the ebb and flow of the product they're talking about. And the lack of usage of this plant over the last five to ten years or so"
Volpe adds there is precedent for saving a plant like Oshawa.
"Ford made similar company-wide decisions in 2005 in their Way Forward plan that included closure of the Essex Engine Plant in Windsor. Two levels of government and Ford of Canada got together and we changed the value proposition"
Meanwhile, the cost of production and over-capacity are getting a lot of the blame for GM announcing it isn't allocation new product for 5 plants.
In addition to the Oshawa plant, assembly facilities in Hamtramck, Michigan and Lordstown, Ohio are on the list as are the transmission plant in Warren, Michigan and a smaller engine plant in Maryland.
Automotive News writer Nick Bunkley (Photo courtesy of @nickbunkley via Twitter)
Nick Bunkley is a writer for Automotive News, he told AM800 listeners on the Lynn Martin Show it's no surprise where the work is moving.
"They've been moving more and more of their labour to places like Mexico where they've been increasing production. It's cheaper labour. That's the unfortunate way that things work right now is they go where the labour's cheaper"
Bunkley says Unifor may be able to come to an arrangement to save jobs in Oshawa, but there are things the union simply can't overcome.
— With files from AM800's Paul McDonald