
GM closing all operations in Oshawa, Ontario: sources - the_unknown
https://www.ctvnews.ca/autos/gm-closing-all-operations-in-oshawa-ont-sources-1.4191935
======
esturk
Governments should wise up when the next bailout happens. Seek collateral on
the company via shares or some other valuable goods that are not easy to shed.
Enforce some board member, etc.

For all the criticism Chinese tech companies get, the main control the Chinese
government has is by being the largest shareholder of said companies. If the
company does something that jeopardizes the stability of society, just enforce
control. Every sizable Chinese company has a party secretary for the very same
reason.

~~~
tonyedgecombe
Just take a look at British Leyland to see what happens when the state gets
involved in car manufacture.

[https://en.wikipedia.org/wiki/British_Leyland](https://en.wikipedia.org/wiki/British_Leyland)

The best option is to let uncompetitive businesses fail and concentrate on
things the private sector can't do well.

~~~
rchaud
> The best option is to let uncompetitive businesses fail and concentrate on
> things the private sector can't do well.

This is such an Economics 101-style response, I'm not even sure how to address
it.

When the plant stops production, it's not only the 2500 people who lose their
jobs, it's also the auxiliary economy of parts suppliers, logistics networks
and food and drink businesses that are affected and may have to shut down as
well. That creates a negative multiplier effect that pushes economic activity
down further. Not to mention the long term impact of lower tax receipts, lower
property values.

You can't snap your fingers and replace the underpinnings of an entire
community overnight via the magic of the "free market". Another company will
only accept the costs of relocating there if the government starts offering
tax incentives and the like to make it worth their while.

I agree that we need a better system, especially when companies can simply
move when it's convenient. But manufacturing is a strategically important
industry and governments are willing to pay to keep that industry at home.

~~~
hackeraccount
It _is_ Econ 101. Governments can do and pay whatever they want but the parent
comment will still be correct.

~~~
toomuchtodo
Being correct doesn’t make you right.

~~~
ryanwaggoner
I can't tell if this is sarcastic or not.

------
the_unknown
Millions in gov't subsidies, a major bailout in 2009 that saved their company,
non-stop threats of closure and ongoing clawbacks of manufacturing. And in the
end... up and out.

Obviously it is GM's prerogative and can do as they please but it is time for
politicians to stop falling for the folly. Just like your stocks and mutual
funds - diversify your industries and don't rely on one big player.

~~~
walrus01
The North American auto industry essentially held the Canadian and US
governments for ransom in the 2008-2009 financial crisis, "bail us out or
we'll go belly up completely, and look how many people will be unemployed!".

~~~
WrtCdEvrydy
We should have let it happen.

That money could have been funneled into social services instead of propping
up industries.

You played and lost, you don't get my tax dollars.

~~~
sonnyblarney
"have been funneled into social services"

Thos jobs pay for the social services of many, and if GM and Ford went kaput,
it would wipe out the governments ability to pay for those services.

Now - I'm not saying it's the right thing to subsidize, but in a 'subsidize or
collapse' situation, that is the reality.

A corporation has many stakeholders: execs, staff, buyers, suppliers,
investors, debtors, and then all the ancillary people who benefit
independently - they're all in a power struggle to share in the surpluses.

If a company is facing legit collapse, and the investors are truly willing to
bite the bullet, it's because they don't think their is incentive there for
them. The surpluses generated may actually be going into the other entities in
the power equation: just because investors own the profits does not mean that
profits represent the big chunk of surpluses.

My ex-neighbour was a long-tim plant worker, he earned quite a lot, granted he
was senior - those are in fact plumb jobs that often pay way above others when
you factor healthcare, retirement etc.. Also consider low turnover - most
people change jobs every few years and lose a few months pay. When you work in
an auto plant, for a bank, for the government etc. the stability factor is a
real economic benefit you can calculate.

It's hard to tell if companies are bluffing or not, but in many cases they are
not - and it illustrates really where the surpluses are and it's not with
them.

There's a big Boeing 777 business case that's used in B-School for accounting,
and it basically demonstrates that the project is kind of a loser for them,
and they should not invest. But the government came along with incentives,
making it worthwhile. It's not a paradox, it's just a lesson in who profits
from what and how.

~~~
amanaplanacanal
Err... I believe Ford didn't want the bailout money. Not sure why you tossed
them in here.

I am totally in favor of letting bankruptcy courts do the job they are best
at. All those assets don't just go away, they are put to better use.

~~~
sonnyblarney
Ford is just an example of a 'big company' that might go bankrupt.

A bailout/subsidy for a company is different than a bankruptcy situation.

You can be assured that in a bankruptcy, the factory will probably close, and
it's workers laid off. It doesn't matter i some assets are sold off,
significant economic activity will dissapear in almost all cases. It's usually
better for the economy for a company to survive than not.

------
SamuelAdams
GM's statement from today:
[https://media.gm.com/media/us/en/gm/home.detail.html/content...](https://media.gm.com/media/us/en/gm/home.detail.html/content/Pages/news/us/en/2018/nov/1126-gm.html)

"Today, GM is continuing to take proactive steps to improve overall business
performance including the reorganization of its global product development
staffs, the realignment of its manufacturing capacity and a reduction of
salaried workforce."

...

Increasing capacity utilization – In the past four years, GM has refocused
capital and resources to support the growth of its crossovers, SUVs and
trucks, adding shifts and investing $6.6 billion in U.S. plants that have
created or maintained 17,600 jobs. With changing customer preferences in the
U.S. and in response to market-related volume declines in cars, future
products will be allocated to fewer plants next year.

Assembly plants that will be unallocated in 2019 include:

    
    
        Oshawa Assembly in Oshawa, Ontario, Canada.
        Detroit-Hamtramck Assembly in Detroit.
        Lordstown Assembly in Warren, Ohio.
         
    

Propulsion plants that will be unallocated in 2019 include:

    
    
        Baltimore Operations in White Marsh, Maryland.
        Warren Transmission Operations in Warren, Michigan.

------
joecool1029
My former SO lives in Oshawa and I spent a lot of time there.

I got to know a few people that worked at the factory. GM announced they were
going to pull out of Oshawa more than 5 years ago. They've been operating on
borrowed time. Nobody there will be surprised at the news. From what I recall
it was mostly impala and camaro assembly happening there.

The GO train takes you right into Toronto, there's no doubt in my mind most of
the laidoff will find work.

------
brightball
The most shocking part of this to me is that they are cutting the Volt? There
was so much R&D in that car and it's such an amazing vehicle that I'm shocked.
Everybody I know that has one LOVES it.

They just need to do a better job of advertising it. It's not advertised AT
ALL. The only people who know about it know about it from word of mouth and
research.

~~~
giarc
I see no evidence of that in the article posted, nor Google News results. The
Volt is not made in Oshawa either.

~~~
pp19dd
The linked story is just a slice of the larger story, obviously tailored to be
more significant for a Canadian audience. But the larger story [Reuters
report] involves a major restructuring.

"GM is expected to announce it will cut the Chevrolet Volt, Impala and Cruze,
the Cadillac CT6 and XTS, and the Buick LaCrosse"

More info at [https://www.reuters.com/article/us-gm-restructuring/gm-to-
cu...](https://www.reuters.com/article/us-gm-restructuring/gm-to-cut-car-
production-in-north-america-halt-some-models-source-idUSKCN1NV1NB)

~~~
del82
The linked story seems to have been updated to remove references to the Volt
being cut:

"The company also plans to stop building several models now assembled at those
plants, including the Chevrolet Cruze, the Cadillac CT6 and the Buick
LaCrosse."

~~~
pp19dd
Yep, they updated it and removed all that specificity since it was attributed
to an anonymous source. However, it doesn't mean it's not true yet. Until
details come out, I think they're going to try to control the message tightly
to make it sound like a possible ending of The Volt is not a regressive move.
Or they'll keep throwing money down that well.

And yes, it's not like they're moving back toward the steam engine, but in the
short run it might make sense to kill the Volt and do something else. But the
optics of it will look bad. Think Reuters got tripped up by the "increase
investment in electric and autonomous vehicles and connected vehicle
technology" line because it's broad and potentially conflicting.

Here's a selection of top "Chevy Volt" headlines for the past few years:

2015: "Yes the 2016 Chevy Volt Will be Profitable."

2016: "GM Will Lose Money on the Chevy Bolt to Make Money On Other Models"

2017: "GM trims battery costs, aims to make profitable EVs"

2018: "GM races to build a formula for profitable electric cars."

In the larger sense, GM's leadership has been sending some weird messages
talking about a future they don't fully understand. Spouting things like
blockchain, autonomous, ride sharing, and future profitability being tied to
selling customer information. You know, all the apparently popular
contemporary trends.

They're a car company.

~~~
zzzzzzzza
Been following gm closely for a while and never heard mention of blockchain.
All I could find was this - [https://www.coindesk.com/bmw-ford-gm-worlds-
largest-automake...](https://www.coindesk.com/bmw-ford-gm-worlds-largest-
automakers-form-blockchain-coalition) . But there's like 50 companies in that
coalition... So it seems weird you would say blockchain first. The other stuff
doesn't seem misplaced at all, and future profitability also seems down on the
company since they are currently profitable albeit their fcf could use
improving.

~~~
pp19dd
You raise some good points.

When I see that word mentioned in any business I get skeptical, especially one
where there's a classical product involved, like bananas. Or cars. In this
case I strongly believed it was used for adding feathers to their plume and so
I used it in a mocking tone. Radio Bloomberg (broadcasts) mentioned the
blockchain line with some skepticism for awhile and so it stuck in my head.

None of these parroting futurisms make sense for GM. Their largest customers
are fleets like Enterprise Rent a Car, who buy massive numbers of new models
before consumers can get to them, assuring delivery numbers. If they compete
with them for rentals or ride-sharing, what if ERAC orders a bunch of Fords
next year? They'd be crazy to endanger this relationship. GM should stick to
making cars and messaging to that effect.

Anyhow, I stand firmly by how I interpreted this announcement. My overall
opinion on GM, however, is probably very ignorant and naive.

"A GM spokesperson told Jalopnik over the phone: “We are ending production of
the Volt March 1, 2019.”"

------
evandijk70
Most people posting here say that the US/Canadian government should interfere
here. I'd like to present a different point of view: I am relatively young,
from the Netherlands and started my job a few years ago. I do not really
remember the 2008/2009 bailouts. I have some savings, and I invested mostly in
a Dutch ETF, which lead to a nice mix of tech, finance, Food Industry and a
big oil company.

I invested a small portion of my money in GM because I did not have a car
manufacturer in my portfolio, and Tesla seemed hyped to me. I considered that
GM is making a profit, betting on electric cars and already has an affordable
model on the roads that could actually benefit society.

I do not care wheter GM production is in the US, Canada, Mexico or China, as
long as the employees are treated fairly. In fact, I would think it is unfair
that GM makes a choice that will lead to lower dividends and is held back by
something that happened prior to the moment that I invested in it.

~~~
canadianwriter
Maybe this will annoy some people but as someone who lives in the GTA, this
attitude just sounds like you are saying your investment portfolio is more
important than the thousands of people losing their jobs just before
christmas.

I know there are big important things to discuss here (such as the bailout
that we all know isn't being paid back and overall manufacturing) but my first
emotional response is a certain finger pointed in your general direction.

~~~
all2
At the base of things, though, GM is looking to make money. If they lose money
by staying in Ontario, they do no one any good (not the taxpayers who foot the
bill, not the government that transfers money from the taxpayers to the
corporation, not the people being paid by the corporation).

The bailout presumes a degree of economic health in the region (and perhaps
the country) that may not be there. Being bailed out means the employees are
on borrowed time.

Money is the bottom line. Failure is necessary. Jobs are a byproduct of
consumption and are not a 'right'. If GM pulls out, there will be other places
those employees can seek work. If there aren't other places they can get jobs,
perhaps Canada should reconsider some of their business regulations (as
regulation suppresses numbers of new businesses).

~~~
burkaman
No, society is the bottom line. Money is an imperfect medium for regulating
society, and government should step in when it doesn't work.

~~~
all2
Depending on where you're from, the _individual_ is the bottom line. Money
mediates individual exchange. In the US the Fed has a very specific role.
Bailing out companies is not actually part of that.

In fact, if the Constitution were taken seriously any more, someone would have
noticed the bit about "The powers not delegated to the United States by the
Constitution, nor prohibited by it to the States, are reserved to the States
respectively, or to the people."

I suppose this is Canada we're talking about, so the above doesn't mean
anything in this context.

------
grecy
Its interesting to see so many here have the opinion that the subsidies were
wasted and the governments should have let GM fail, not spend taxpayer dollars
to bail them out.

And yet, most on HN seem perfectly happy to give Amazon huge tax breaks to
setup in NY, which is _exactly_ the same thing.

~~~
int_19h
It's not exactly the same, though. Bailout uses the money that government
already has, and that could be used on something else. Tax break is using the
money that you don't have yet - and, crucially, will only have if the company
actually is there!

~~~
tanilama
Not necessarily, the government might not have that money, they will likely
raise debt to do so. It is technically not the tax payers money

~~~
cryptonector
In the end, either taxpayers pay for it, or all holders of the currency of
equivalent instruments do (through inflation).

------
johnohara
Slowing sales of pickup trucks and sedans -- Silverado and Impala in
particular.

Ford recently announced ceasing production of all sedans in favor of SUV's. GM
said it wouldn't follow suit but it looks like the market might be dictating
terms.

~~~
johnohara
Oddly enough, the Equinox uses the same V6 engine as the Impala and Cadillac.
I guess it comes down to how you use the vehicle and not how you power it. The
3.6L V6 VVT is a good engine too -- reliable, 300+ hp, 30+ mpg hwy, etc. Built
in Detroit even though the vehicles are assembled in Oshawa.

This shutdown is a bellwether, not just a cost move.

~~~
markvdb
Very much off topic: 3.6l is >2 times more cylinder volume than useful in >95%
of scenarios.

Pick your favorite reason to minimise your crude oil consumption. Global
warming and not subsidising oil despots are two good ones to me.

~~~
freehunter
Cars are very expensive ($30k on average), and their production is a huge use
of crude oil and water and electricity. What you seem to be advocating (and
maybe I'm reading this wrong) is that people buy multiple cars, one small fuel
efficient everyday driver, and one bigger more powerful vehicle for the 5% of
the time they need something bigger than a Fiat. Humans are heavy, cargo is
heavy, trailers are heavy, and furniture is big. A 1.8L engine in a subcompact
can't always support those use cases.

I don't know too many people who could afford a $20k car to drive to work and
then a $40k truck just to park in their garage 95% of the time. And if they
can, they're buying a BMW instead.

~~~
ip26
What do you require a 3.6L for? A 1.8L will move all the cargo you care to. A
2.5L tows my 1200lb camper over high mountain passes. A big engine is really
only a _must_ if you are towing something north of a ton, as far as I'm aware.

People tend to buy more engine than they need, and 1.8L's are more powerful
than ever. And nobody had 300hp thirty years ago except the sports cars. We
survived.

~~~
johnohara
_And nobody had 300hp thirty years ago except the sports cars..._

My first car, 45 years ago!, was a '66 Chevrolet Impala with a standard, small
block, run of the mill, 283cu in. (4.6L) engine. The motor was blown so I
bought a used one for $75 and swapped it out myself. Took about 6 weeks
because I had never done it before.

The 283 was rated between 200 and 345hp. It was my daily driver for school
(hardly a sports car) until markvdb's "oil despots" tripled the price of gas.
I sold the Impala and bought a Volvo 144S with a 1.8L 4 cyl. engine.

Neither car (or engine) was ever able to get better than 25+ mpg and the Volvo
made you very aware of how much power you had available.

~~~
davidgould
You really can't compare HP ratings of cars from that era with modern cars.
The old ratings were generally "gross brake horsepower" which was what you got
at the crankshaft on a dyno with all the auxiliaries (oil pump, water pump,
alternator, fuel pump, fan, etc) disconnected and powered separately and with
special exhaust and intake arrangements, eg headers and no air filter. Modern
HP is usually "SAE net horsepower" which is measured in almost an as installed
in a vehicle configuration. Gross BHP significantly inflates the number.

See:
[https://en.wikipedia.org/wiki/Horsepower#SAE_gross_power](https://en.wikipedia.org/wiki/Horsepower#SAE_gross_power)

~~~
johnohara
Thanks for the link DavidGould. Learnt me some I didn't know.

The '66 Impala was a heavy car and I didn't purchase it for racing. I did put
a heavy duty clutch plate into it when I replaced the engine. It did burnouts
just fine until I snapped the welds on the rear differential and sent the
universal joint banging upward against the bottom of the car. Learned a little
bit about welding, u-joints and spider gears on that one.

------
protomok
I'm curious what the impact will be for GM tech workers. IIRC they hired a
bunch of software devs in Markham and Oshawa over the last few years

------
ilamont
For those critical of the 2008-2009 bailouts, GM or any other automaker with
manufacturing operations in North America going belly up would have
contributed to an even larger disaster. It's not just the main plants that
would be affected, but also the entire supply chain - from mom & pop shops up
to the big component manufacturers located in clusters across the country, not
to mention GE, National Instruments, Intel, and myriad manufacturing-focused
startups.

~~~
linuxftw
Most people have a very simplistic view of the GM bailout, it was not like the
bailout of the banks. GM was allowed to fail, shareholders and senior
creditors took a loss in favor of unsecured creditors (Union Pensions were
stuffed with GM funny-money bonds). The feds completely disregarded the law
and simply did what they thought was politically expedient (bailing out the
unions).

What should have happened: GM Fails, GM assets inevitably acquired by someone
else. Business involves risk, taxpayers shouldn't subsidize that risk.

~~~
cryptonector
A voice of reason. Thank you.

Yes, liquidation is the answer when the patient is insolvent and bankrupt.

In a systemic crisis, however, our bankruptcy courts cannot move fast enough.
That is a problem that needs to be tackled, otherwise scared politicians will
always have enough time to reach for bailouts.

------
jammygit
What other auto companies manufacture in Ontario? Toyota?

Its so awful when you lose your job because the job goes away. So many people
are going to have to retrain.

~~~
slededit
Ford has a plant in Oakville.

------
Overtonwindow
About time… I never understood this car. It was way overpriced for the market,
and didn’t seem to offer many advantages over the Prius.

------
hourislate
I understand Ontario has very high electrical rates and labor rates. There is
also the issue of the Federal Governments new Cap and Trade policy although I
don't know if GM received a waiver. Did these things maybe cause GM to close
the plant?

~~~
FractalParadigm
The cap and trade system was done away with by our current government in a
populist bid to "reduce the price of gas" (and unsurprisingly, gas prices
didn't change with the removal of the program).

Our Hydro prices are about middle-of-the-road in North America. We have a
tiered-use system that sees prices as high as 13.2¢/kWh On-Peak (during the
day) and 6.5¢/kWh Off-peak (at night), with an average around 8-9¢/kWh IIRC.
Far from expensive, but when everyone compares our prices to Quebec (one of
the cheapest in NA and is something around 4¢/kWh average IIRC) it seems
astronomical.

Labour rates generally aren't too crazy either, we do have a relatively high
minimum wage of $14/hr, but when unions start to run the show and wages become
"competitive" it starts getting out of hand. Cami is in my hometown and IIRC
the average employee takes home something around $35/hr. Toyota in Woodstock
and Cambridge are over $35/hr at their highest rate, even though they _aren
't_ unionized, but they still have to pay competitive wages or they'd never
have enough employees. A lot of the feeder plants (i.e. the places that make
components; engines, doors, etc) are in the $20-25/hr range and they have an
astronomically high turnover rate, nobody wants to do the work unless there's
huge money involved. I'm wondering if _this_ is the reason; why pay thousands
of ungrateful employees >$30/hr for work that can be done for <$10/hr
virtually anywhere else on the planet? Even by the time you factor in the
costs of shipping vehicles it's gotta be thousands of dollars cheaper per-
vehicle. It can't be easy to justify the cost to shareholders unless the
(monetary) benefits massively outweigh the cons

~~~
sheepmullet
> and they have an astronomically high turnover rate, nobody wants to do the
> work unless there's huge money involved.

Maybe because Ontario has ridiculous housing costs?

Id be happy to work for $15/hr if I could get a decent 3 bedroom house for
$70-80k.

I mean seriously mortgage costs + $11/hr on top and I would be happy.

Yet even somewhere like London it will cost 400k+ and just forget about
Toronto.

~~~
wenc
> decent 3 bedroom house for $70-80k

These seem like unusual expectations.

Are there any decent areas anywhere in the country with these kinds of prices?
That seems abnormally low. Also a $15 wage single income isn't supposed to
support a 3bd house.

------
pfarnsworth
Since Elon Musk is Canadian, maybe Tesla will buy the operations and start
building Teslas in Oshawa?

~~~
CamperBob2
He's from South Africa, IIRC.

~~~
pfarnsworth
He has Canadian citizenship (along with South Africa and US) and went to
college at Queen's University in Canada.

~~~
CamperBob2
Interesting. You don't encounter people who hold triple citizenship all that
often here in the US.

~~~
wenc
Elon Musk inherited Canadian citizenship from his mother, and it was also what
allowed him to move to North America.

(source: Ashlee Vance's bio)

