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APMA Media Coverage Report – GM Oshawa

U.S. Demands More Power over Auto Quotas Ahead of USMCA Signing

ADRIAN MORROW, U.S. CORRESPONDENT
WASHINGTON
NOVEMBER 29, 2018 – Globe and Mail

The Trump administration is pressing Mexican officials to give the United States the power to selectively punish automakers with plants in Mexico by making some companies subject to tariffs while exempting others, The Globe and Mail has learned.

Industry sources in both countries with knowledge of the discussions said the United States wants the right to choose how much production by a specific company would be shielded from potential future tariffs under the terms of a side letter to the United States-Mexico-Canada Agreement.

“USMCA will ensure less of this stuff happens,” said Flavio Volpe, head of the Canadian auto parts industry’s trade group. “It may be the first time Trudeau and Trump are on the same page on autos.”

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Martinrea to close parts plant that supplies GM’s ill-fated Oshawa operation

ERIC ATKINS, TRANSPORTATION REPORTER
TIM SHUFELT, INVESTMENT REPORTER
NOVEMBER 27, 2018 – Globe and Mail

Automotive company Martinrea International Inc. says it plans to close a factory that makes parts for the cars that roll off the General Motors Co. assembly line in Oshawa, Ont., a ripple effect from GM’s announcement that it will shut the plant next year.

GM on Monday said it will close auto plants in Oshawa, Detroit and Lordstown, Ohio, and two U.S. parts factories by December, 2019, as it slashes production capacity and costs in a market shift toward SUVs and crossover vehicles. Detroit-based GM said it is taking the steps to free up money for the development of electric and autonomous vehicles.

Flavio Volpe, head of the Auto Parts Manufacturers’ Association, said most parts makers have more than one customer, but many factories surrounding the Oshawa plant depend on GM. Any company “that survived the Great Recession was smart enough to know they need to have more than one customer,” Mr. Volpe said in an interview. “That being said, there are dozens of companies in that region whose number one customer is General Motors. We’re probably talking about 10,000 employees. It doesn’t mean all those jobs are at risk.”

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North America is at ‘peak car.’ What does that mean for Canada’s remaining auto plants?

Emily Jackson – Financial Post
November 28, 2018

As Oshawa grapples with General Motors’ plans to stop production at its century-old assembly plant, part of a larger restructuring so the automaker can instead invest in electric and connected vehicles, attention turns to Canada’s remaining seven auto plants.

Given GM’s willingness to shutter eight plants, including four in the United States, and bet $6 billion in annual savings on “future” technologies, industry watchers are questioning whether Canada’s auto production sector is prepared for a future in which electric or self-driving cars overtake traditional vehicles.

Still, Flavio Volpe, president at the Automotive Parts Manufacturers’ Association, is cautious about betting on electric vehicles.

When he worked at Ontario’s economic development ministry from 2007 to 2011, he said they chased “every single lead we could” on vehicle electrification. Back then, GM made a big bet on the Chevy Volt, which it decided to build in Detroit-Hamtramck. Yet that plant is one of the eight facilities slated for closure.

“Right now, the market for electric vehicles doesn’t support an assembly plant, let alone various assembly plants,” Volpe said.

“Until the price of lithium comes down, the cost of the batteries makes the cost of the vehicles out of reach for the majority of consumers,” he said.

Volpe believes it’s better for Canada to pursue expertise in connected vehicles, the technology that makes features such as telematics, weather, connectivity or advanced driver assistance. Canada is well-positioned to lead in this with thousands of tech companies in Ontario alone.

“The bet is connected technology,” Volpe said.

Canadian companies including Blackberry Ltd.’s QNX division are pursuing connected technology.

Meantime, BMO economist Doug Porter also questions how quickly electric vehicles will take off in the next 20 years. He said it’s possible that we are at peak car thanks to longer-term factors such as ride-sharing and more people living in the downtown core. But sales numbers still show a strong desire to own their own vehicles, Porter said.

“There’s still quite an appetite for motor vehicles,” he said.

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Unifor president wants Trudeau to use Trump tactics, impose stiff tariff on GM vehicles in Mexico

THE CANADIAN PRESS
November 28, 2018

WASHINGTON — The head of Canada’s largest autoworkers union wants Prime Minister Justin Trudeau to borrow the tactics of the U.S. president and get tough with General Motors, Donald Trump-style.

Unifor president Jerry Dias is also urging both countries to hold off signing the new U.S.-Mexico-Canada Agreement on trade and to join forces on a 40-per-cent tariff on GM vehicles built in Mexico. He wants the company to reverse plans to cut more than 14,000 jobs, including 2,500 production workers in Oshawa, Ont.

Flavio Volpe, president of the Canadian Automotive Parts Manufacturers Association, said while he understands the union leader’s frustrations, adopting Trump’s hardline tactics would be a grievous tactical error at a time when Canada is trying to negotiate a solution to its own tariff impasse with the U.S.

The ink isn’t even dry and you have General Motors completely violating what it is we are trying to accomplish

Canada remains subject to Trump-imposed tariffs — 25 per cent on steel exports and 10 per cent on aluminum — that the U.S. claims are justified on the grounds of national security, and that auto-industry experts acknowledge have made it more expensive to build cars in both countries. They’re called “Section 232 tariffs,” for the part of an American trade law that allows them.

“You can’t be hoping for the benefits of the USMCA, fighting Section 232 tariffs and endorsing company-specific tariffs at the same time,” Volpe said in an interview.

“Jerry is a very important and positive part of the Canadian automotive fight, but that tariff idea is wrong.”

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‘This was pre-Trump’: Why USMCA couldn’t have saved GM jobs in Oshawa

Jessy Bains, Yahoo Finance Canada
Nov. 29, 2018

Canada is on the cusp of signing the United States-Mexico-Canada Agreement (USMCA) at this week’s G20 summit in Buenos Aires, but even the revamped trade deal wouldn’t have saved the General Motors (GM) plant in Oshawa, Ont.

Under USMCA, 75 per cent of a vehicle will have to be made in North America to qualify for duty-free movement within the continent. Under NAFTA it’s 62.5 per cent. The increase is aimed at shifting production away from Asia and Europe.

“USMCA’s auto rules are slanted to incentivize more production in the U.S. and Canada versus Mexico,” Flavio Volpe, president of the Automotive Parts Manufacturers Association told Yahoo Finance Canada. “Companies making cars for U.S. and Canadian consumers post USMCA transition will do so more profitably from those 2 countries.”

But Volpe says neither USMCA or the removal of steel and aluminum tariffs would have saved the nearly 3,000 jobs lost in Oshawa, or the 12,000 U.S. jobs lost.

“The decline of demand for the product allocated to Oshawa over the last 10 years had nothing to do with tariffs invoked in July 2018 and more to do with buffering the business model for the underperforming Hamtramck plant they designated for their EV production.” says Volpe. “Ultimately, it sunk the fortunes of both facilities.”

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End of GM’s Oshawa plant to be a $3B blow to Canadian supply industry

Tuesday, November 27, 2018

Dana Flavelle – Automotive News Canada

General Motors’ decision to end production at its Oshawa assembly plant next year is a blow to Canada’s multi-million dollar auto supply industry, the head of the Automotive Parts Manufacturers’ Association said Tuesday.

“It’s not good for the workers at the Oshawa plant and it’s not good for our members, and the people who work in their plants,” Flavio Volpe said in an interview after GM announced it had no product planned for the Oshawa plant beyond December 2019.

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GM’s Plan to Close Oshawa Plant Is Setback for Canada’s Auto Sector

By Kim Mackrael and Paul Vieira, The Wall Street Journal

Nov. 26, 2018

General Motors Co.’s decision to shut down its manufacturing operations in Oshawa, Ontario deals a blow to Canada’s government, which believed it had secured a new lifeline for the country’s auto sector through the revised North American Free Trade Agreement.

Canadian lawmakers from all levels of government and partisan stripes said Monday the closure would hurt the local community in Oshawa, just east of Toronto, and the national economy. The federal legislature will hold an emergency debate Monday night on how Canada should respond to GM’s move. GM said Monday it will close the Oshawa factory along with vehicle-assembly plants in Michigan and Ohio, leading to a cut of 14,500 jobs, as the car maker tries to adjust to shrinking demand for passenger cars.

Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, said it’s possible uncertainty over Nafta’s fate contributed to the company’s decision. He said the federal Liberal government, which faces re-election in less than a year, and the provincial government in Ontario should be talking about ways to keep the plant operating.

“These are not irreversible decisions,” Mr. Volpe said.

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Government throwing money into GM’s Oshawa plant not the answer: APMA’s Volpe

Flavio Volpe, president at the Automotive Parts Manufacturer’s Association, joins BNN Bloomberg to provide perspective on reports that GM is planning to close its Oshawa plant.

November 27, 2018 – BNN Bloomberg

Click here for Video.

 

How the GM shutdown will affect the supporting industries

November 27, 2018 – CBC Radio

Plans to suspend assembly at the Oshawa GM plant doesn’t only impact the nearly 3,000 workers at the facility, but also an estimated 10,000 additional jobs in the automotive parts sector. Flavio Volpe from the Automotive Parts Manufacturers’ Association talks about what this means for supporting industries of the automotive sector and what’s to come industry wide.

Click here for Interview.

 

Video: Auto Parts Sector to Take Hit with GM Announcement

Peter Langille, November 26th 2018 – iHeartRadio

The head of the Automotive Parts Manufacturers’ Association of Canada is expressing concern that General Motors is planning to shut down its operations in Oshawa as part of a global restructuring.

“Certainly industry analysts are not completely surprised, you see the ebb and flow of the product they’re talking about.  And the lack of usage of this plant over the last five to ten years or so”

Volpe adds there is precedent for saving a plant like Oshawa.

“Ford made similar company-wide decisions in 2005 in their Way Forward plan that included closure of the Essex Engine Plant in Windsor.  Two levels of government and Ford of Canada got together and we changed the value proposition”

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