Closing GM’s Oshawa plants would cut GDP by $5B, union says

Unifor report suggests Ontario would lose 33,000 manufacturing-related jobs within two years of shutdown.

March 30, 2015   by PLANT Staff

A 2014 Chevrolet Impala rolls off the line at GM's Oshawa Assembly plant. PHOTO: GM CANADA

A 2014 Chevrolet Impala rolls off the line at GM’s Oshawa Assembly plant. PHOTO: GM CANADA

TORONTO — If General Motors closed its Oshawa manufacturing complex entirely, Canada’s GDP would shrink by more than $5 billion per year within two years.

That’s one of the main findings in a new report by Unifor released Mar. 30, which examines the operation’s overall economic benefits.

The union, which represents more than 305,000 workers, including close to 40,000 in the auto sector, said the study confirms the massive economic benefits from the GM’s operations in Oshawa, just east of Toronto.

The report was authored by Robin Somerville of The Centre for Spatial Economics, an independent economic modeling firm,

“Canada is a great place for GM to do business, and we all benefit greatly from them being here,” said Jerry Dias, Unifor’s National President at a Toronto press conference.

The study, Economic Impact of GM Operations in Oshawa, found the complex boosts Canada’s GDP, supports tens of thousands of jobs, generates vital tax revenue to support such services as health care and education, and even significantly bolsters the Canada Pension Plan.

“The benefits to all Canadians are evident in this report. This underlines why Canada needs a focused strategy to win new auto investment, just like other countries have,” Dias said.

The study examines the overall economic impact of GM’s Oshawa complex, including its 3,600 hourly production workers and an estimated 500 salaried staff whose jobs are tied to manufacturing.

The analysis considers the direct GDP produced in the facility, the indirect impact on auto parts and other supply industries and the economic activity stemming from the spending and re-spending of workers’ wages. It finds that if the Oshawa complex closed entirely, Canada’s GDP would shrink by more than $5 billion per year within two years.

A total of 22,000-24,000 jobs would be lost immediately, with close to 33,000 jobs lost in Ontario within two years. Eventually employment partially rebounds, but at the expense of a permanent decline in average wages ­even for workers who do not work in the industry.

Governments are also dramatically affected: the federal and Ontario governments see a permanent loss of revenues and an increase in their deficits of close to $1 billion a year combined. Lost CCP contributions would lead to an increase in contributions or benefits cuts, the report notes.

“This study confirms that a major auto assembly facility like Oshawa is an economic anchor, generating enormous spin-off benefits felt throughout the economy,” said Jim Stanford, Unifor’s chief economist. “But it’s not just that GM is good for Canada,” said Stanford. “Canada is good for GM.”

He cited several recent investments and expansions in Ontario’s auto industry as proof that Canada is a good place for automakers to invest, including Ford in Oakville, Chrysler in Windsor, GM in Ingersoll and Honda in Alliston.

“Canadian auto workers provide the highest levels of quality, productivity and innovation in the world, at a very competitive cost,” Stanford said.

For a copy of the report here.

Unifor is Canada’s largest union in the private sector, formed Labour Day weekend 2013 when the Canadian Auto Workers and the Communications, Energy and Paperworkers union merged.

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1 Comment » for Closing GM’s Oshawa plants would cut GDP by $5B, union says
  1. Fred says:

    Has the auto workers unions not yet learned that the wages and benefits they are demanding are, in large part, why so many companies are pulling out of Ontario and Canada….apparently not! It is bad enough that government and its’ taxes makes our province difficult to be competitive in other markets, but the union demands are a driving force that makes companies leave our once bustling economy.

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