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Batteries not included

Ontario's auto industry rocked by GM closure - we need to figure out what Tesla needs to prep for next generation of cars
Tesla
Tesla vehicles are being assembled by robots at Tesla Motors Inc factory in Fremont, California on July 25, 2016. REUTERS/Joseph White

By Todd Humber

In a former life, I used to be the editor of The Oshawa News. That’s going back a few years, but we were well versed in this phrase: “When General Motors sneezes, Oshawa catches a cold.”

That was in the 1990s, when numerous plants were humming in the Ontario city of 160,000 just east of Toronto – including the Oshawa Truck Assembly and the GM north plant. The former closed in 2009, the latter in 2004.

This week, GM announced it’s giving the city a full-blown case of pneumonia — shuttering the final remaining plant and tossing 2,500 people out of work. When the last Chevrolet Impala runs off the line next year, it will mark the end of an era that began more than a century ago.

I’m well versed in the ups and downs of Canada’s auto industry. I grew up in St. Clair Beach, a suburb of Windsor, Ont., which itself is the self-proclaimed Automotive Capital of Canada. When I took my spot on the line for the first time in 1991 at Chrysler’s Windsor Assembly Plant, fastening a fuel line to the bottom of Dodge Caravans and Plymouth Voyagers, I was the third generation Humber to do so.

As a kid, in the early 1980s with Chrysler facing bankruptcy, I recall my grandparents coming down to visit. When they first pulled onto our street, they thought we were having an election — there were so many “For Sale” signs dotting the well-manicured lawns. People were afraid, and financially crunched by job instability and soaring interest rates. (Anyone care for a 19 per cent mortgage rate? Anyone?)

Chrysler pulled a miracle with its bet on the minivan, which not only saved the company but the City of Windsor from economic disaster. To this day, the plant is still humming along with three shifts of workers cranking out the Chrysler Pacifica and the Dodge Grand Caravan.

There are no minivan miracles up GM’s sleeve for Oshawa, and the rest of Ontario’s auto industry could be in trouble. Tom Lasorda, the former Chrysler CEO, told BNN Bloomberg that layoffs are “going to spread.”

“You know Brampton’s next… what’s the government going to do there? I don’t know what they’re doing at Chrysler, because I’ve been away for nine years now, but the bottom line is, what are they going to do for these people?”

He’s referring to the FCA plant in Brampton, Ont., which builds the Chrysler 300, Dodge Charger and Dodge Challenger and employs about 4,000 workers. Like the Impala, those are sedans and the motoring public isn’t much interested in them anymore.

Instead, the focus has shifted to SUVs and there is a burgeoning market for electric cars. Just last night, I watched an episode of The Grand Tour, an Amazon original TV show featuring Jeremy Clarkson, Richard Hammond and James May. (Season two, episode 10 if you have Amazon Prime.)

Clarkson was blown away by all the gadgets, some very useful – some downright silly – that come packed into the Tesla Model X. A few of them left me gob smacked, as well. There is an incredible amount of innovation in that vehicle, including a “summon” mode where the car comes to you and the rather silly “celebration” mode where the car plays music and does a strange dance by flashing its lights and opening and closing its doors. (See video below.)

And oh yes, the door to the vehicle opens as you approach. Chivalry isn’t dead, it just needs batteries.

Part of the reason GM announced the closure of the Oshawa plant, along with four plants in the United States (so no, we can’t blame “Make America Great Again” on this one) was the shift to building electric vehicles. There is no doubt batteries are the future of travel, but plenty of concern that Ontario – and Canada as a whole – won’t be a player in that world like it was for the good old combustible engine.

There is no easy answer, but there are plenty of opinions being offered. David Olive, the Toronto Star’s business columnist, suggested that Ottawa simply buy GM Canada and launch our own industry. There’s some merit to that idea, though it will never happen. I argued way back in 2012 that we should resurrect the Avro Arrow in our search for a new fighter jet to replace the aging CF-18. Shockingly, my opinion fell on deaf ears. I expect Olive’s musings to meet the same fate.

Others have abandoned all hope and put their eggs into the retraining basket. While a crucial step, it’s not going to bring high-paying automotive jobs back to Oshawa. It will simply help the workers transition to new careers and industries, and it’s unlikely the city and Durham Region will have enough work to swallow all of them back into the workforce. (Cannabis might be a logical landing spot, with a reported 10 facilities planned in the Oshawa area. But that’s just one employed worker moving to another job, and doesn’t result in net employment increases or growth.)

My fear is automotive manufacturers will pull an Amazon — announce plans to build new facilities to build the cars of tomorrow, but force cities into competitive bids with lucrative and unaffordable incentives. Ontario’s only hope in such a scenario will be a highly skilled workforce, and don’t think the history of unionization at car plants won’t hurt the province.

A couple of years ago, at the Human Resources Professionals Association conference in Toronto, an HR professional from Alberta asked me for the best markets to post a recruitment ad for tool and die makers. I suggested Windsor, which was met with a look of disgust.

“We tried that once, and the two guys we hired started to try and unionize us on day one,” she said. “Never again would I hire someone from Windsor.”

It’s impossible to overestimate the importance of the auto industry to Ontario’s economy, which is the largest in Canada. GM’s sneeze may give Oshawa a cold, but if Chrysler follows suit the entire province may get a nasty sore throat.

We need a dedicated effort from the federal and provincial governments, backed up with solid partnerships with colleges across the province, to retrain current autoworkers and give the next generation the skills that companies like Tesla need when building cars. They chose California to build cars over Ontario and Detroit for a reason — and we need to understand it, and ensure we offer the same environment.

Only then will we have a chance to ensure the long, proud history of building cars in Ontario isn’t something we remember fondly in a dusty old museum.

© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.

Todd Humber

Todd Humber is the publisher and editor-in-chief of Canadian HR Reporter, the national journal of human resource management. Follow him on Twitter @ToddHumber
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