General Motors’ surprise decision to restart vehicle production at its closed Oshawa assembly plant will inject more than $ 3 billion in business into Ontario’s parts industry per year and create thousands of jobs , according to industry stakeholders.
The move secures a long-term future for companies like AGS Automotive Systems, which operates a manufacturing facility near the GM plant, said Lisa Tucker Boulton, general counsel for J2 Group, Toronto owner of AGS and Tiercon. Corp.
“We are so excited. It breathes new life into our Oshawa facility, whose future was uncertain.
As a supplier to GM, AGS hopes to win the additional Canadian market, she said. The company, formerly AG Simpson, has been making bumpers for GM since 1974, but the future of its Oshawa plant has been uncertain since vehicle assembly ceased in the city in December 2019.
GM’s move hit Ontario’s parts industry hard, with some companies shutting down, while others, like AGS, laid off workers.
But in a dramatic turnaround, GM announced this fall plans to invest up to $ 1.3 billion in retooling the Oshawa assembly to meet growing demand for highly profitable Chevrolet Silverado and GMC Sierra pickups. and popular.
GM said it plans to hire 1,400 to 1,700 hourly workers by the time production resumes in early 2022. The union representing the workers said that could rise to 2,300 if a third shift was made. added.
For suppliers, this level of production translates to $ 3 billion a year in new business in southern Ontario and an additional 8,000 to 10,000 jobs, said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association. (APMA).
“There is nothing that compares to the economic activity that a local assembly plant provides,” Volpe said. “Ontario has regained its eastern bookends and this will help bolster all auto investments in the Greater Toronto Area. ”
GM Canada President Scott Bell said the company is making a “full-fledged investment” in Oshawa to meet growing demand for its pickup trucks, which now account for 40 percent of GM Canada’s sales.
“What’s this going to do to the local supply chain? It’s going to have a huge impact, ”Bell said on an Automotive News Canada podcast on Nov. 20.
According to Unifor, which negotiated GM’s employment contract that included the new investment, each new job at the Oshawa plant will create up to seven indirect jobs.
“It’s in this stadium. This is going to be important, ”said Bell.
Construction has already started and includes a new body shop and flexible assembly line, a GM spokesperson said. The company plans to run two shifts, but that will depend on market demand, the spokesperson said.
Unifor Local 222, which represents workers at several GM suppliers as well as the Oshawa Assembly, said it is premature to say which companies will hire.
“We just signed the deal,” said Colin James, who retired as Unifor local president in December after helping negotiate the landmark deal. “GM is only preparing the tenders. ”
Former GM suppliers will likely be the first to work and will know early in the first quarter which parts makers will feed the plant, James said.
GM expects a “significant increase” in its full-size pickup capacity when Oshawa goes live in January 2022, CEO Mary Barra said at an investor conference on Nov. 5.
“RESTORE OUR FAITH”
Suppliers as far as Windsor, about 400 kilometers southwest of Oshawa, have welcomed the announcement.
“We really needed this investment,” said Jon Azzopardi, interim president of the Canadian Mold Makers Association. His company, Laval Tool & Mold Ltd., supplies spare parts to GM.
“It has restored our confidence in GM, so it will be good for us.”
Auto jobs pay well, with average hourly wages at an assembly plant ranging from $ 30 to $ 35 and up to $ 25 at suppliers, Azzopardi said.
Magna International Inc., one of GM’s largest suppliers, said it was too early to comment on the impact on its business.
For AGS, that means its Oshawa plant can resume supply from a local assembly plant, reducing transportation costs and bringing back value-added in-house assembly, said Boulton of J2 Group.
The plant, which carries out metal stamping and plastic injection molding, employs 230 people, up from 287 in 2017.
It’s too early to comment on hiring plans, Boulton said.
AGS, which employs 1,500 people in Canada and the United States and generates annual sales of more than $ 500 million, supplies bumpers to U.S. customers from its Oshawa plant, said Boulton. But serving this market remotely was becoming a challenge, she said.
The reopening of GM Oshawa will make the AGS plant more viable, Boulton said. This will also allow the actual assembly of the bumper components to be re-assembled, instead of making parts shipped in pieces.