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Viewing cable 08TORONTO175, PLANNED GM PLANT CLOSURES PROVOKE FURIOUS REACTION

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Reference ID Created Released Classification Origin
08TORONTO175 2008-06-05 20:46 2011-04-28 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Toronto
VZCZCXRO2501
RR RUEHGA RUEHHA RUEHQU RUEHVC
DE RUEHON #0175/01 1572046
ZNR UUUUU ZZH
R 052046Z JUN 08
FM AMCONSUL TORONTO
TO RUEHC/SECSTATE WASHDC 2515
INFO RUCNCAN/ALCAN COLLECTIVE
RUEHME/AMEMBASSY MEXICO 0148
RUEHKO/AMEMBASSY TOKYO 0079
RUEHUL/AMEMBASSY SEOUL 0046
RUEHBJ/AMEMBASSY BEIJING 0085
RUEHOK/AMCONSUL OSAKA KOBE 0020
RUCPDOC/USDOC WASHDC
RUEAHLC/HOMELAND SECURITY CENTER WASHDC
RUEHC/DEPT OF LABOR WASHDC
UNCLAS SECTION 01 OF 02 TORONTO 000175 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD ELAB PGOV SENV CA
SUBJECT: PLANNED GM PLANT CLOSURES PROVOKE FURIOUS REACTION 
 
Ref: Toronto 134 and previous 
 
Sensitive But Unclassified - Please Protect Accordingly. 
 
1. (U) SUMMARY: General Motors' (GM) June 3 announcement to close 
its pickup truck plant in Oshawa, Ontario, in 2009 provoked a 
blockade of the company's headquarters by Canadian Auto Workers 
(CAW) union members on June 4 and 5. Criticism of GM's decision from 
provincial and federal governments was swift and intense. GM blames 
the planned closure on the combined effects of rising gasoline 
prices in North America, and turbulence in the U.S. housing market. 
The CAW called the plant shutdown a "betrayal" of their recently 
signed collective agreement with GM and continues to pressure GM for 
a commitment to keep the plant open until newer, more fuel efficient 
trucks can be lined up for production in Oshawa.  On June 4, the 
federal Minister of Finance Jim Flaherty offered to release part of 
the Canadian government's C$250 million Automotive Innovation Fund 
to GM as an incentive to produce a more vehicles at GM's Oshawa auto 
plant.  END SUMMARY. 
 
---------- 
"Betrayal" 
---------- 
 
2. (U) On June 3, General Motors (GM) announced the closing of four 
North American plants after the third quarter of 2009. The planned 
closures include the Oshawa, Ontario truck plant where 2,600 jobs 
will be lost.  GM pinned the blame on reduced demand for larger 
vehicles due to higher North American gasoline prices and turbulence 
in the U.S. housing market. In GM's analysis the reduction in demand 
represents a long term realignment of the North American market, and 
not a temporary reduction. 
 
3. (U) The planned closure was immediately condemned by the Canadian 
Auto Workers (CAW) union, which barricaded GM's Canadian head office 
in Oshawa.  CAW officials are particularly aggravated that the 
decision came weeks after the company and GM agreed on a collective 
bargaining agreement (CBA) that preserved jobs in exchange for a 
three-year wage freeze and numerous cost-saving provisions. 
(Reftels) 
 
4. (U) On June 4, CAW picketers prevented vehicles from entering the 
Oshawa headquarters.  Union members said they will continue the 
blockade until the company reverses its decision to close the plant. 
Under the terms of the recently signed CBA, GM was to produce its 
next-generation version of pickup trucks in Oshawa truck facility, 
beginning in 2011-2012.  Production of these new models reportedly 
will be moved to Mexico.  The union has threatened wildcat strikes 
and a CAW Local 222 member said "they have nothing to lose." 
 
--------------------------------------------- ------- 
Another Blow to Canadian Labor, Pleas for Government Assistance 
--------------------------------------------- ------- 
 
5. (U) GM's decision was the latest and most severe blow to Canada's 
auto manufacturing sector, particularly in Oshawa. Until January 
2008, the Oshawa pickup truck plant had been running at its full 
capacity of three shifts per day. After the cut of one shift in 
January, the CAW and GM managed to avoid the removal of another 
shift through collective bargaining. If the decision to close the 
plant stands, nearly 2600 jobs will be lost permanently. 
 
6. (U) CAW leader Buzz Hargrove is calling on the provincial and 
federal governments to press GM to retain at least one shift of 
employment at the plant beyond the third quarter of 2009, as a 
stopgap until production of next generation pickups begin.  Union 
officials are scheduled