CAW "shocked" as GM cuts 1000 jobs

--------------------------------------------------------------------------------

CAW 'shocked' as GM cuts 1,000 jobs
MATT HARTLEY

Thursday, August 30, 2007

TORONTO — Executives from General Motors “shocked the living hell” out of representatives from the Canadian Auto Workers union on Wednesday when they revealed that they would eliminate about 1,000 jobs in Oshawa, said CAW president Buzz Hargrove at a press conference on Thursday to discuss the cuts.

Towards the end of a meeting to discuss the future of the rear wheel drive vehicle, GM told the CAW that it would cut one shift of production of Chevrolet Silverado and GMC Sierra pickup trucks in Oshawa.

“We had not anticipated any announcement of layoffs,” said Mr. Hargrove. “This is devastating news for our members.”

Pickup truck sales in North America have slowed as the slide in the U.S. housing sector continues to work its way through the economy.

Mr. Hargrove said the CAW was aware that the slowdown in the housing market and the current risk aversion in the credit markets was curbing demand for pickup trucks in the United States, but the auto maker had offered no indication that the layoffs were coming.

He also expressed frustration that the federal government is not doing more to alleviate some of the pressure on North American auto makers.
“What is happening is not inevitable — it is not the result of the market.

We are getting slaughtered as an industry,” Mr. Hargrove said. “Our members' jobs are being destroyed by unfair trade with Asia and the European community.”

GM cited high inventory as the main reason for the reductions, Mr. Hargrove said, adding that GM's analysts “don't see that improving given what's happening in the housing industry and the credit markets.”

The union calculates that the spillover from the cuts will be four or five jobs lost in the community for every assembly job lost. The Oshawa plant employs more than 3,000 workers.

The CAW plans to meet with GM, and will ask the federal and provincial governments to get involved in discussing what can be done to prevent the cuts.

“We raised with General Motors some ideas to try to avoid it, but there didn't seem to much interest there,” he said.

The union said it would try and negotiate buyout incentives with GM so that some of the layoffs could be offset by voluntary early retirement, according to a statement posted on the CAW website Thursday morning.

“GM is not contractually obligated to provide these packages, since this is a volume-related decision,” it said.

At the press conference, Mr. Hargrove lashed out at Prime Minister Stephen Harper and Finance Minister Jim Flaherty, chastising them for not doing enough to prevent the cuts. Many of the workers who stand to lose their jobs live in Mr. Flaherty's riding of Whitby-Oshawa, and Mr. Hargrove suggested the Finance Minister should resign.

“If anybody in Durham region should be losing their job, it should be Jim Flaherty,” Mr. Hargrove said.

Citing the downturn in the U.S. economy, which is expected to continue through to the end of 2007, and the current inventory surplus at GM, Mr. Hargrove said the situation will likely get worse before it gets better.

“I predict there will be more of these bad news stories until we can get off this idea that ... somehow the automotive industry will be just fine,” he said. “It never has been just fine. There has always been government leadership.”

About 10,000 jobs in the auto assembly industry have been lost in the auto manufacturing sector since the industry's peak in the late 1990s, with 13,000 more job cuts in the auto parts industry since 2001, the union said. The union estimates $100-million of annual family incomes in the region will be lost as a result of the layoffs, which could have a punishing effect on the local economy.

One shift of production will be cut from the truck plant by the U.S. auto maker in January, which will reduce output at the plant from three shifts to two for the first time since the early 1990s. Earlier this month, GM said that sales of the Silverado and Sierra pickups were down sharply in July due to the housing crunch and high gas prices.

The cuts are the latest example of how the downturn in the U.S. housing market is dragging down the North American economy. About 85 per cent of the trucks assembled at the Oshawa plant are destined for the U.S.

GM is already restructuring two car plants located next to the truck plant in Oshawa. One of those plants is expected to close as part of a $2.5-billion plan by the auto-maker to build a single plant on the site that will build as many as 500,000 vehicles each year.

The union has already suffered several blows so far this year, including plant closings in Windsor, Ont., Chrysler's decision to eliminate 2,000 unionized Ontario jobs and the shutdown of dozens of auto parts plants across the province that supplied the Detroit Three. The GM cuts are expected to be felt in other areas of the Ontario economy as well, forcing more cuts at auto parts companies.