Wednesday, June 04, 2008


In the wake of the recent announcement by General Motors that they plan to renege on a collective agreement signed only two weeks ago with the Canadian Auto Workers (CAW) that offered substantial concessions on the part of the workers in return for assurances of job security angry workers have blockaded the General Motors headquarters in Oshawa Ontario. In addition to the insulting lie delivered to the autoworkers at the very time when they were planning the closure GM has also reneged on an agreement with the government of Ontario that gave GM almost half a billion dollars in return for a promise to maintain a certain number of jobs in Ontario. The corporate arrogance is overwhelming. Quite frankly they think that they can get away with any crime. Molly will be blogging further on this breaking news in days to come. For now here is the story as transmitted by the business pages of the Globe and Mail.

Angry union members blockade GM Canada head office
OSHAWA, Ontario (Reuters)

- Hundreds of angry autoworkers blockaded the entrance to General Motors of Canada's headquarters in Oshawa, Ontario, on Wednesday, demanding the company reverse its decision to close the local truck plant and crying foul over the timing of the closure.

"We're not allowing any GM of Canada employees to enter the headquarters building," said Chris Buckley, of the Canadian Auto Workers union, which says 2,600 jobs will go if the truck plant closes.

"We are going to stay here until General Motors reverses the decision they made yesterday, or at the very least commits to a product for the Oshawa truck plant, or sits down face-to-face with this union to try to explain why they have broken our brand new agreement."

GM said it would meet with the union in Detroit on Friday.

The company announced on Tuesday it would closed the Oshawa plant, and three others in North America, as it tries to shore up a restructuring plan that has been overtaken by a steep decline in U.S. sales of pickup trucks and SUVs in the face of surging gas prices and tight credit.
Two truck plants in the United States and one in Mexico are also slated to close.

Up to 750 people, many clad in red T-shirts emblazoned with a white maple leaf and the words "Made in Canada matters," peacefully blocked the road leading to GM's Canadian headquarters.
"I feel sick about this situation and all I can do is visualize GM workers on the welfare line," said Jim Bedford, a retired GM employee from nearby Bowmanville, Ontario.
The CAW, which has around 13,000 members at GM, says the closure of the Oshawa plant is a betrayal. GM and the CAW signed a new three-year labor agreement on May 15 that included a wage freeze and a promise by GM to boost production in Canada rather than cut it.

Under that deal, GM said it would start producing hybrid versions of two of its trucks at the Oshawa plant.

The plant currently produces the Chevrolet Silverado and the GMC Sierra crew-cab and extended-cab pickup trucks, which GM Canada spokesman Stew Low said are taking the biggest hit of GM's products in the United States.

He said the hybrid versions of the Silverado and Sierra would still be built and rolled out at the end of the year, but at other plants, either in the United States or in Mexico.

Auto analyst Dennis DesRosiers said in a note that the final decision to close the Oshawa plant probably had not yet been made during the bargaining, but the company most likely had an idea of what it wanted to do. (Molly Note: 'Final Decision' means "the actual order to close". This is something quite different from making the plans for such a thing. Given corporate 'speed" I really think that this involves deliberate lieing on the part of management during the negotiations).

"The real reason is that they didn't have to and it would weaken their position in the labor talks ... And why would GM provide (CAW President Buzz Hargrove) this information which would only have strengthened the CAW position and hardened the resolve of the CAW."
GM's Low said the closure boils down to a rapid shift in customer demand away from larger gas-guzzlers as pump prices surged to record levels.

"Our main customer is the U.S. and there is a huge and very drastic shift away from trucks and SUVs and we have to react to that because we can't continue to buy vehicles that people aren't buying," Low said.

U.S. auto sales figures released on Tuesday showed GM truck sales were down 39 percent in May from a year earlier. Sales of the Silverado were off 44 percent and those of the GMC Sierra down 33.9 percent.

GM's moves to close the four plants, along with shift reductions, will reduce its truck capacity by over 700,000 and total North American capacity to 3.7 million by 2010, which should result in $1 billion in cumulatively savings by 2010, said Mark Warnsman, an auto analyst at Calyon Securities.

GM also operates a car plant in Oshawa that produces the Chevrolet Impala and Camaro and other models.

Canadian Finance Minister Jim Flaherty said the federal government is interested in helping GM begin production of a new car at the Oshawa car plant.

He said he was willing to use funds from a C$250 million ($245 million) Automotive Innovation Fund designed to develop more fuel-efficient vehicles.

"We need a third vehicle. I've already spoken with General Motors about that. ... If we can participate in funding that innovation, then we're certainly going to be there," Flaherty told reporters.
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