Oshawa: GM’s suppliers have the most to fear when the factory closes
With more than 15,000 jobs vulnerable to disruption, is the region ready to help auto workers find a new career?
This is the first article in a short series ‘Oshawa: The front line of changing work.’ Under the cloud of General Motors’ impending closure, SCP has spoken to people throughout the Durham region to understand what the changing landscape of work means at a local level.
When Stacey Kennedy lost her job at the Lear Corporation in Whitby, Ontario, she wasn’t prepared. Working in a factory, rumours and false alarms fly around all the time. She knew better than to pay much heed to them. Or so she thought.
Stacey had found her way onto the line in 1999, making auto parts to supply General Motors in next-door Oshawa. “For me, getting the job at Lear was my saving grace,” she said. “I was finally going to have some security.” After a series of low-paid jobs in hospitality, she was now earning good money along with generous benefits and a pension. But nine years later in 2008, Stacey found herself on the hunt for a new career.
The Durham region, which includes Whitby and Oshawa, has had a long and painful history with the decline of manufacturing. GM’s near-complete closure of its Oshawa plant at the end of this year is just the latest development. In the 1980s, the jewel in Oshawa’s crown had employed around 23,000 people at its plant. The latest changes will leave just 300 of the 2,600 jobs which remain and, more importantly, could compromise an additional 15,000 or more jobs at GM’s auto-parts suppliers.
Now the community is preparing, once again, to help auto workers find a new path. At a time of record job vacancies, the numbers alone look good for their transition into other careers. The reality, however, is much more complicated, and exposes an employment services system which is out of step with people’s needs.
What’s next?
With thousands of workers losing their jobs in the coming months, GM, Unifor and organizations throughout the community have been working to find potential opportunities.
“There’s not a lot of high-paying jobs, good benefit jobs out there,” said Colin James, President of Unifor Local 222 in Oshawa, “unless people are prepared to move out of Durham region or out of the province.” For older workers, early retirement may be the best option, “if we can get them to that finish line with some sort of financial help,” said James. Not only have they been out of school for many years, making it hard to retrain, but many will be on salaries which are very difficult to match in a new job.
“Every newspaper has said: poor GM, they’re all on strike. Are you serious? You guys are walking away with $100,000 and a full pension.”
The bigger concern around GM’s closure, however, is for the plant’s suppliers. In the past, GM’s downsizing has impacted them, but this time it could be more extreme. “In this case we’re closing a plant, which has a domino effect on all of the supply plants” said James. “Nobody is focusing on the supplier groups; the impact on them.” Although GM only has a few thousand plant employees remaining, it has been the guarantor of a whole chain of employment in the region.
The union and various employers have been locked in talks, but as of yet there is no settlement for suppliers. Whereas the GM workers will receive a payout — up to $150,000 — along with money and resources put towards training, most supply plants are currently just offering the legal minimum. They are entitled to just two days per year under the federal labour code and, only if they’ve worked at the company for more than five years, one week per year under provincial employment standards.
“It’s going to be a long unemployment line for part suppliers, I can tell you that,” said Brandi Pratchett, a forklift operator at CEVA Logistics which supplies GM. She wants to keep forklift driving, but understands the transition ahead will be hard. “It’s difficult to find a forklift job that pays what we are making right now.”
Closing down
So what will happen to the businesses supplying GM? Some reports have suggested they have been diversifying their client bases over time, but it’s unclear how many will remain open when the GM plant closes.
“The only thing I hear is that they’re closing down,” said Brenda Kelly, CEO at Greeley Containment & Rework, which inspects GM parts in Oshawa and Clarington. She estimates around 20,000 employees in the supply chain will lose their jobs. “Every newspaper has said: poor GM, they’re all on strike. Are you serious? You guys are walking away with $100,000 and a full pension.”
Greeley, however, is taking a very different approach. With GM representing more than three-quarters of their revenue, when Greeley heard the news last year Kelly and her team found a completely new business: Greeley Remove & Refresh, which will manage the removals and renovations for estate sales.
Greeley has around 80 people on staff, most of whom are general labourers. While the final work is completed for GM, it has started training workers to fill jobs in the new company — like painters and furniture removers. The vast majority of her staff have expressed an interesting in staying on.
“It’s terrible, I feel, what [GM] are doing — but we have to move forward,” said Rhonda Boyd, who’s been working at Greeley for two decades. After years of many jobs including forklift driving and inspecting parts, she’s now running some of their new renovation projects. “I’m excited about our transforming to a different company,” she said.
“I’ve said to them, at the end of GM you may be laid off for a period of time,” said Kelly, but she expects anyone who wants a job will eventually be hired back. Their new jobs will be at a similar low skill level than before, and they will receive similar wages at just above the minimum wage. Such a transformation may be impossible to replicate more broadly, however. It would be much more difficult for other auto parts manufacturers to maintain the same workforce, especially for those with higher-skilled, better-paid workers.
A life reset
For employees losing their jobs from the GM closure, the latest round of layoffs does not necessarily have to be a bad thing. With the right support, this disruption could represent the chance for a new start.
“I’m devastated that GM is leaving, but at the same time this is an opportunity for you to get a life reset,” said Heather McMillan, Executive Director of the Durham Workforce Authority, a non-profit organization which works on local economic development. “I think that’s really exciting for people.”
“As good as the job was security-wise, it was mind-numbing”
The key lesson, she says, is to treat every person as an individual. “If you want to build resiliency into a community,” McMillan said, “I think you have to take into account what some people’s dreams are, and lay some opportunities before them that they might not have seen.” A worker’s action centre is launching to help guide GM workers, and Unifor is negotiating with supply plants to set them up for their employees. McMillan previously worked in the auto industry supplying GM, and once ran an action centre herself.
For Stacey Kennedy, the opportunity to change careers was exciting. Lear’s action centre held some workshops and seminars, had some connections with employers, and could refer workers to community organizations like the John Howard Society which offered wraparound support. Stacey has since become an addictions counsellor, working with a number of people in Durham region who are struggling with life after auto.
“As good as the job was security-wise, it was mind-numbing,” she said, and really tough on her body — including carpal tunnel syndrome, shoulder surgery, and bursitis. “This was an option for me to have school paid for, and take part in a career I would actually find rewarding.”
The scars of transition
To create these successful transitions, community organizations are emphasizing the importance of intervening early and receiving the tools and funding to support workers comprehensively — from skills to mental health.
Unfortunately, many vulnerable workers take their time in preparing for the next steps. A common pattern is living off their payout (if they have it), staying on employment insurance for a while, and then finding a new path.
“Skills upgrading for employment purposes wasn’t such a big deal 20 years ago,” said Jennine Agnew-Kata, Executive Director of the Literacy Network of Durham Region, which promotes literacy and basic skills in the region. “People could be guaranteed reasonably-paid employment with very little in the way of academic skills.” Now even low-paid jobs, such as working at a local hardware store, require a certain level of basic skills such as maths and literacy, she said.
“If you’re sitting there at 55 years old with nothing more than a high-school diploma that you haven’t touched since the day you walked into that factory — you’re in trouble, because the world has moved on,” said Heather McMillan. “Start planning now. because while you are employed it’s easier to find a literacy class at night, it’s easier to have those dark night of the soul conversations.”
“I’m a firm believer that communities need to develop what their communities need… We don’t need to be dictated a model.”
Not only do some of these workers lack basic skills, but their lives are often complicated by a number of issues. Losing a job in a factory can leave a scar, for example. “There was absolutely a certain amount of pride in what you did, and pride in this in being a Canadian automotive town,” Stacey Kennedy said. The anti-social hours of shift work means that line workers’ lives revolve around their work more than usual, she said. So when a factory downsizes or closes, workers lose their routine, their social supports and often their sense of purpose. “That was their life, those were their friends,” Stacey said. “I think there’s a big loss of hope.”
In order to find new work, many people require a lot more help than a college training course. “You might tell them: here’s the money, go retrain — but they’re not ready for that,” said Christina Barrow, Director of Employment & Training Services at John Howard Society. “There’s foundational skills development, there’s life issues, there’s the self-management issues.” She believes the funding streams available do not appreciate these complexities. They are funded according to outcomes, she said, and therefore are incentivized to find clients a new job as quickly as possible, as opposed to achieving genuinely sustainable long-term results.
And when they are finally ready for a job, the employment and training system has been alarmingly disconnected with the opportunities that are actually out there.
In the last era of mass lay-offs in 2008, the Ontario government created the Second Career program, offering laid-off workers up to $28,000 for retraining schemes. An auditor-general report in 2016, however, exposed how ineffective the scheme was. Following the program, only 17% were employed full-time, and only 10% were employed in either their field of training, a professional occupation or a more suitable job than they’d had before.
A local response
The Ontario government is looking to completely revamp the employment and training system, and has chosen prototypes around the province to trial new approaches. So far the government has publicly recognized the importance of local solutions, but it remains to be seen what kind of changes will happen.
Armed with the right labour market information, local coordination and support can cater to people’s individual needs and respond to demand in the community. “I’m a firm believer that communities need to develop what their communities need,” said Christina Barrow. “We don’t need to be dictated a model.”
Automotive manufacturing wasn’t the first, nor will it be the last sector to experience a significant decline. When the factory closes and workers need a new start, it’s local relationships and communication which will guide people through change. “That support was really key in the camaraderie, the morale,” said Stacey. “That there is hope.”
