November 26, 2018 / 4:09 PM / 16 days ago

Canada blindsided by GM closure, workers walk out in protest

TORONTO/MONTREAL (Reuters) - Hundreds of workers walked off the job and Canadian Prime Minister Justin Trudeau expressed “deep disappointment” after General Motors Co (GM.N) on Monday announced the closure of its Oshawa plant, catching governments and employees by surprise.

Canadian officials, briefed on the plan on Sunday, promised to aid those affected by the December 2019 closure, part of a wider restructuring that will cut production of slow-selling models and slash GM’s North American workforce.

GM said the closure affects 2,973 assemblyline jobs in the Ontario city, out of the automaker’s Canadian workforce of 8,150.

“I spoke with GM (Chief Executive) Mary Barra to express my deep disappointment in the closure,” Trudeau tweeted on Monday. “We’ll do everything we can to help the families affected by this news get back on their feet.”

The end of automotive production in Oshawa is a blow to workers in Canada’s manufacturing heartland and comes as Trudeau’s Liberal government is trying to head off the economic impact of low oil prices in Western Canada. Trudeau is up for re-election next October.

“The families in Oshawa need to hear that the Prime Minister hasn’t already given up on a century of the auto industry in our community,” said Conservative member of parliament for nearby Durham Erin O’Toole, speaking in the legislature.

GM told the provincial government nothing could be done to keep the plant - located about 37 miles (60 km) east of Toronto - open, Ontario Premier Doug Ford said.

“The first thing I said is, ‘What can we do? What do we have to do?’” said Ford, referring to a Sunday call with GM Canada’s president, Travis Hester. “He said the ship has already left the dock.”

The Canadian and Ontario governments joined the United States in supporting GM with billions of dollars in aid after the automaker filed for bankruptcy protection during the 2009 global economic downturn.

“We are not going away without a fight,” Jerry Dias, National President of Unifor, told a news conference in Oshawa.

Unifor, a successor to the United Auto Workers breakoff Canadian Auto Workers, represents most of the country’s auto workers and more than 250,000 in other sectors.

‘IT’S TERRIBLE’

Canada’s auto industry has struggled to attract new investment in recent years, and the latest closure will ripple through the company’s supply chain.

Canadian auto parts maker Martinrea International Inc (MRE.TO) will close a plant that supplies the Oshawa facility, said Executive Chairman Rob Wildeboer in an interview.

Wildeboer said the announcement affects only about 1 percent of revenue for Martinrea, whose shares fell 6.8 percent on Monday. Shares of peers Magna International (MG.TO) and Linamar Corp (LNR.TO) pared early losses to close up.

Ford Motor Co (F.N) has no plans to close a plant in Canada, President Mark Buzzell told reporters after meeting with Trudeau on Monday.

The new trade agreement struck by the United States, Mexico and Canada in September leaves significant room for Canadian plants to increase duty-free exports. USMCA, as the new NAFTA is called, is expected to be formally signed this week.

But a former Canadian auto executive said it would be difficult for Canadian government officials to persuade GM to keep the plant open.

“The government has done everything they could to keep them afloat. Obviously incentives by themselves don’t keep a car plant open,” said the executive, speaking on condition of anonymity because of the sensitivity of the matter.

Members of Unifor walked out of the Oshawa plant “in protest,” ahead of a meeting with GM about the announcement, a union spokeswoman said.

“I’ve moved my family twice for this company and they do this to me. It’s terrible,” a tearful worker told CBC TV as he left the plant.

BMO Capital Markets estimated that the closure would reduce Canadian gross domestic product by between 0.1 percent and 0.2 percent over a full year.

Reporting by Allison Martell in Toronto, Allison Lampert in Montreal and David Ljunggren in Ottawa; Editing by Richard Chang and Matthew Lewis

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