A look back at GM's history in Canada
(Bloomberg Businessweek) -- Amanda Kalhous and Rebecca Keetch joined General Motors Canada within a year of each other. Over the past 15 years, they’ve survived layoffs, a government bailout, and the company’s bankruptcy. Today, they’re living through something more fundamental: the biggest shift the auto industry has seen since the invention of the assembly line.
This time, only one of them has a future in it.
In any other generation, the thousands of employees being laid off by GM in Oshawa, Ontario, could easily be retrained for work elsewhere in the sector. But hard work and a solid education are no longer enough to hold onto a job in an industry that technology is upending.
GM knows what it needs to secure its future, and it’s not Rebecca, a production operator at the Oshawa factory with a community college diploma, plus 18 months of university, who places two belts on an engine every 108 seconds. It’s Amanda, an electrical engineer with two university degrees and 24 patents to her name who oversees a team that designs software for the next generation of vehicles.
Mary Barra, chief executive officer of General Motors Co., is gambling that climate change and urbanization is about to accelerate the shift to electric and autonomous vehicles—just as sales of the combustion-engine sedans that Rebecca makes have plummeted in favor of SUVs and pickup trucks. By the end of the year, the company will have cut about 14,000 salaried and hourly workers at five factories in North America.
The reductions are one reason 48,000 U.S. employees at GM walked off the job in September, idling about 2,750 of their Canadian co-workers. The U.S. union is pushing for pay increases, less reliance on temporary workers, and faster progression of new hires to top wages. GM and the United Auto Workers reached a tentative deal on Wednesday, though the striking workers still must ratify it. The ultimate agreement will shape talks next year for GM in Canada, which has been bleeding a disproportionate number of jobs, compared with the U.S.
While GM has offered to relocate some of the Canadian workers affected by the plant closings, the shift in strategy means that after more than a century, it will stop making cars in Oshawa.
GM in Oshawa
Amanda, 47, never expected to have a job for life when she joined the company in 2005. She isn’t worried by the upheaval. Her skills are transferable, she believes, putting her firmly in control of her own fate. “I have the ability to learn and the ability to create,” she says. “I think those two things are what this country is going to need in the future.”
Rebecca, 44, sees the road crumbling behind her, with her labor union’s decline and globalization’s relentless march eroding wages and making work more precarious than ever.
“At the time when I started, it looked like there was a clear path to a pension and benefits and a reasonably good standard of living,” says Rebecca, who joined GM in 2006 as a “levelizer,” pouring transmission fluid into trucks as they rolled past her on the line, engines running. Since then, her hourly wage has dropped, even as Ontario’s minimum wage has climbed. “I see that little graph in my mind, and I’m thinking, What’s the situation going to be like in three or four years?”
Each workday, Amanda rises at 6:30 a.m., showers, and heads to the kitchen of her suburban, four-bedroom house, where her husband already has water boiling for her tea and lunches packed for their teenage daughters. Scooping up the breakfast and lunch she’d prepped for herself the night before, she pulls out of her two-car garage at 7 a.m., drops her youngest at the bus, and makes the 40-minute drive to Markham, Ontario, bypassing the toll road to save a bit of money on her commute to GM’s Canadian Technical Centre.
Only 50 kilometers (31 miles) west of the production line where Rebecca is putting belts on engines, the CTC could be on another planet. Inside a Silicon Valley-style incubator stocked with stand-up desks and whiteboards, Amanda’s workstation overlooks a bank of electric test vehicles parked beneath a solar-paneled car port.
A former triathlete, she recently started going back to the gym and eats her protein-rich egg bake (avocado, tomato, and ham) at her desk while juggling bureaucratic and creative tasks. On any given day, her team is testing GM algorithms for camera-based cruise control, integrating software that will keep a car in its own lane, or brainstorming features for tomorrow’s vehicles.
Wearing jeans and a gray “#InnovationLivesHere” T-shirt, Amanda talks about her work while under the eye of a GM communications rep charged with making sure no top-secret research and development information is disclosed.
Among her proudest achievements is Bluetooth technology that allows a car to communicate through a phone app without draining the car battery. The idea for Keypass—a product so cool GM made a commercial about it—was born in 2011 out of Amanda’s annoyance that she kept forgetting her car keys but never her phone.
She and her team began experimenting with how far apart a mobile phone and car could be and still talk to each other. Bluetooth proved the most promising delivery system, but initially used too much power. She eventually came up with an app that communicates with the car to turn on the heat and lights when its owner approaches, greets the driver by name, and, most important, unlocks the door. Keypass became a feature of the Chevrolet Bolt and the first of Amanda’s patents to end up in production.
“As an engineer,” she says, “to have something that you were a part of inventing actually be in a physical vehicle—it’s huge.”
Much of her work is more incremental, effectively building pieces of a car out of code instead of metal. Her team even refers to its code as the “product line.” But she’s also constantly hunting for the next groundbreaking idea. “It is your job to think, it’s not just your job to do.”
In other words, this is no assembly line.
Even as the company shrinks its hourly and salaried workforce in Oshawa by roughly 2,000, the automaker is boosting its ranks of software engineers in Canada to 1,000, from 700. That none of those jobs are unionized doesn’t worry Amanda or her team, almost all of whom are millennials. “I actually don’t think any of them are here for stability. I think all of them are here because it’s interesting work, and that’s what they want to do,” she says. “They all want to change the world.”
And the pay is pretty good. Engineers here start at about C$80,000 ($61,000) a year, compared with an hourly wage of about C$21 an hour, or less than C$44,000 a year, for new production employees in the plant. GM has so far proven willing to hike high-tech salaries to retain top talent and to offer Silicon Valley-like perks. Hours are flexible at the tech centre, and there’s no minimum time required in the office. There’s a gym, wellness room, pool table, and full-time chef who cooks up chili lime tilapia and Korean bibimbap.
All of this helps feed Amanda’s optimism. In the auto industry, though, the balance of power can shift with little warning.
On May 8, GM threw Oshawa a lifeline of sorts. The company promised to invest $170 million, repurposing the facility to make parts for legacy vehicles and a test track for autonomous models that will save a few hundred jobs.
The next day, on a rainy afternoon, more than 1,000 workers from the nearby plant file into the Iroquois Park Sports Centre to find out what they can expect if they cut their losses and take a buyout. Rebecca is sitting on a metal foldout chair in the middle of the packed stadium.
The speeches from union officials are predictably fiery. Wearing a black “Save Oshawa GM” T-shirt, Greg Moffatt, union chairman at the plant, talks about the “deafening” silence from Canadian Prime Minister Justin Trudeau and accuses Ontario’s premier, Doug Ford, of giving up on the plant.
The dilemma for everyone in the audience is whether to take the buyout or accept a layoff to hang onto their recall right—basically crossing their fingers and hoping they have enough seniority to be called back to work.
As the rhetoric builds to its requisite crescendo, police are on hand in case things get rowdy, but there’s no need. The union has already warned workers there will be no debating a done deal, a message Moffatt reinforces several times during his speech.
This plant was doomed long before the electric vehicle/self-driving car evolution seized it by the throat. At its peak in 2003, it produced almost 1 million cars. So many people worked at the Oshawa factory that the city would synchronize its traffic lights with GM shift changes. But for years, in a microcosm of the country’s manufacturing sector, the auto industry has been losing jobs to cheaper locations in Mexico.
“Closing down a plant is the toughest thing you can do,” Travis Hester, president of GM Canada said in an interview before he transferred to GM Global operations in Detroit in September. The company has worked “extremely hard” to soften the blow through buyouts, retraining, and opportunities at other GM plants, he says. “If I could find something for them all, I would.”
Inside the Sports Centre, Rebecca and her colleagues appear resigned, or perhaps bewildered. When the speeches wrap up, lines form quickly at three microphones on the floor. Her question, like most of the others, is technical. She wants clarity on the best she can hope to extract from a range of buyout packages so complex it would take one of Amanda’s algorithms to untangle it. When one of Rebecca’s friends tests the nonconfrontational waters by asking whether union officials are going to receive preferential treatment, Moffatt shuts the question down.
As the plant’s footprint has shrunk, so has the union’s leverage. In 2007, the UAW opened the door to tiered wages. A year later, at the height of the 2008 financial crisis, the Canadian Auto Workers union (now known as Unifor) was forced to make significant compromises.
Unifor officials say they were backed into a corner by circumstances outside their control, including a global recession that led to GM and Chrysler bankruptcies. “The U.S. and Canadian governments committed to bailing out the two companies, but only if the workers gave concessions,” said Jerry Dias, Unifor’s national president. “We all had tough decisions to make.”
A decade later, the disparity is enormous. Production workers with 30 or more years of service can take home a $130,000 retirement incentive, in addition to guaranteed pension income and benefits, plus a $10,000 voucher toward a new GM vehicle. But because of the way later types of contract work were banked, Rebecca’s 13 years of service add up to just three years of seniority. She’ll pocket about $30,000 if she takes a buyout, plus six months of health benefits and $6,000 in retraining tuition. GM employees have to leave the company to be eligible for the retraining funds.
If she accepts a layoff based on that flimsy seniority, she’ll be out of work in November, with only a slim chance of being recalled for one of 300 production and trade jobs being salvaged. Heading out of the stadium, she’s No. 1,370 out of 1,845 production workers in the queue.
Rebecca’s mother, three of her grandparents, and one great-grandfather all worked for GM, but that was never her plan.
“I grew up being told you want to go to school so you don't have to work in a factory,” she says. It wasn’t that her family looked down on the job. It’s just that they wanted her to find something that paid well and made her happy. “I expect that’s similar language you’d find in a lot of working-class households. People are supposed to do something like be a scientist or a lawyer or a doctor. They’re not supposed to be middle management or factory workers or waitresses.”
But after struggling to get on her feet out of high school, she finally landed a steady position with an auto supplier in 2003 for $17 dollars an hour. Two-and-a-half times minimum wage at the time, it was a financial windfall that led to an eight-month contract at GM for even better money at C$28.89 an hour—and then to 13 years of diminishing returns on the factory line.
In 2009, she was laid off as the global financial crisis pushed the automaker into bankruptcy in the U.S. She’d just bought her first house, a three-bedroom fixer-upper on the outskirts of town. “It’s a century home without any of the charm,” she jokes. She retrained as a paralegal under a provincial program, but before she could shift gears, Canada stepped in with a $13.7 billion bailout for GM and Chrysler Group’s Canadian operations. When the plant called her back to work, she went, figuring it was safer to spend a few years building up a financial safety net before leaping into something new.
But now, after the union opened the door to tiered wages and benefits following the financial crisis, Rebecca makes $24.51 an hour, 12 per cent less than when she started and 12 per cent lower than the national average for all jobs. When she first joined GM, her wages were 42 per cent higher than the average.
Single, with no kids, she’s so far managed to hold onto the house, which she now shares with her mother, but the financial cushion never materialized. She drives a 2006 Chrysler PT Cruiser and laughs when asked why she doesn’t own a GM. “I think there’s an employee discount, but I haven’t made enough money to buy a new car.”
So each day, she parks her PT Cruiser outside Building D and crosses the parking lot to a chain-link fence topped with barbed wire. Using her pass to go through the gate, she enters the squat, gray building through a yellow door, badges in again, and wends her way past lockers and lunchrooms to the production facility and her place on the line.
Suspended pneumatic tools and electrical guns obscure the view across the plant floor, but a couple of skylights and a line of high windows make her spot a prime one. “I was so excited to be able to see daylight,” she says of her transfer to this area a year ago. “I got really lucky with this one. It’s a good job.”
She’s done a lot of things on the line, from putting decals on cars to a job that required stretching her 5-foot-2-inch body over a vehicle to remove metal spacers with both hands.
“It was just heavy and dirty, and because of my height, I had to keep leaning on the frame,” she recalls. “I was always getting this black sticky stuff all over me.”
Her current role requires her to use a massive hoist to move components into place. It intimidates some of her co-workers, but she prefers it. “For safety reasons, they have to be very careful about building enough time in the job,” she says. Wearing gloves, safety glasses, and steel-toe shoes, she works through more than 15 separate steps in less than two minutes.
Fall behind, and an alarm goes off. “You’ll hear those sounds in your sleep.” Rebecca and her friends share the link to a music video called Hit the Andon that pokes fun at workers who relieve the monotony by pushing a button—the andon—to stop the line and score an extra bathroom break. “If you’re an autoworker, it’s a pretty funny song.”
If you’re not, it sounds pretty grim. But Rebecca says workers have always viewed the line as a trade-off. In exchange for decades of shift work, broken into tens of thousands of hours of tedium and millions of repetitious tasks, generations of plant workers have achieved solid, middle-class lives with good wages and benefits.
The union let the carpet wear thin under its workers when it conceded to tiered wages and benefits, in Rebecca’s view, and globalization—especially free-trade agreements—yanked it out from under them. “We’ve separated the owners from the communities they work in. There is no ‘owner’ in GM. There’s a multinational corporation that’s been given ‘personhood,’” she says, referring to a legal concept that allows corporations to receive many of the same rights as people. But “we don’t expect them to be good citizens.”
With all that’s at stake, the current GM strike evokes comparisons with epic labor battles of the past. In 1937, emboldened by a walkout at the company’s operations in Flint, Mich., more than 4,000 workers walked off the job for two weeks. They pushed for better wages, working conditions, and union recognition. The company was forced to make concessions, and the strike is considered a landmark for unionism in Canada.
Rebecca’s grandfather and great-grandfather were part of the movement. When school let out at 4 p.m., 12-year-old Edwin Keetch would head to the picket line to join his father, Herman, in the protest. “We would just walk up and down the streets, three abreast,” Edwin recalls from the living room of the three-bedroom home his father built in 1925. Mothers and wives organized their own marches on different streets.
Conditions on the GM line in the 1930s were brutal, says Edwin, now 94, a trim figure in a sweater and slippers. The pressure to keep the line moving was intense, and safety often took a back seat. His father once saw a man decapitated by a wood shaper. Later, when Edwin joined GM, he worked alongside that man’s son.
Edwin has been retired from GM longer than he worked for it, enjoying a gold-plated pension hard-fought by his father and his fellow workers. His house is crammed with photos and mementos including, in pride of place, the reclining leather chair the automaker presented his father for 50 years of service.
But things have changed, and where his granddaughter says the union ought to have expanded the fight, as it did in the 1930s, it’s instead on the defensive. Rebecca also thinks it needs to rebuild a central pillar of worker solidarity: equal pay for an equal number of years worked—meaning everyone’s seniority should be counted the same way.
The company gave generations of Keetches a good life, but Rebecca is experiencing some of the same uncertainty that stalked auto workers in the industry’s early days. During the Depression, they were called into the plant sporadically, for partial shifts. “My father used to stay home. He was afraid to go anywhere in case the phone rang and he’d miss two hours’ work,” Edwin says. Eighty years on, it pains him to see his granddaughter facing precarious employment as well. “There should be more loyalty.’’
Like Rebecca, Amanda comes from a strong labor background. Her late grandfather was the chairman of a union representing aircraft workers in Belfast, Northern Ireland. Both women grew up in modest homes, funded by middle-class incomes. Each devoured books and did well at school.
Amanda also took a while to find her way to GM. The first in her family to attend university, she started thinking about engineering only after a high school teacher suggested it. “My mum had a couple of relatives who were train engineers, and that’s what I thought an engineer was.”
She chose Canada’s Royal Military College to study electrical engineering, because it offered a guaranteed job for five years, with tuition paid. But she returned to civilian life when she got her master’s degree, also in electrical engineering. Even though her family is filled with entrepreneurs—her husband, father, and sister have all started their own small businesses—she’s only ever worked for large companies: first, for the Canadian arm of a now-defunct U.S. defense contractor, then for courier Purolator, and now, since 2005, GM.
That’s not to say there haven’t been bumps. In the wake of the economic downturn following the Sept. 11 terrorist attacks, she navigated eight months of unemployment after moving to Ontario from Nova Scotia. And when the company closed the truck facility in 2009, slashing the engineer count to 100, from 500, it taught her that STEM jobs aren’t immune from cuts.
But she survived, and she says all of her co-workers eventually landed on their feet. They required neither a paternalistic company nor a union, she says, because transferable skills create their own self-reliance and adaptability.
“I used to think I was lucky. But I’ve had a few years to reflect on it, and I think it comes down to the choices we make,” she says over coffee in the technical centre’s cafeteria. “It’s easy to say from my position—and I don’t know that this will relate to everyone who’s going through a down patch—but I have gone through periods of unemployment in my life. There are things that you can do to improve your lot.”
The 15 engineers on Amanda’s team have nine master’s degrees and a Ph.D. among them, and their earnings put them comfortably in the top 10% of Canadian wage earners. They stand out for other reasons as well. Almost half came to GM from outside Canada—India, Iran, Kenya, Nigeria, Pakistan, and Singapore. And while amassing all that education, ironically, not all of them learned to drive.
If autonomous vehicles take off, they may never need to. One of Amanda’s job perks is a new GM car every six months. She chose her current red GMC Terrain because it lets her play with adaptive cruise control, meaning the car keeps a safe distance from other vehicles, even in the city. The next level up is Super Cruise, which keeps the car in the middle of the lane—you don’t even touch the steering wheel. Someday GM could remove the pedal and steering wheel altogether, the kind of self-driving technology Amanda’s counterparts at GM Cruise in San Francisco are working on.
As those types of vehicles open the door to ride-sharing and car-sharing, isn’t Amanda concerned it will mean fewer cars—and, ultimately, fewer engineers, especially as technology such as artificial intelligence gets smarter and smarter?
“The jobs of 100 years ago are not the jobs of today, and the jobs of 100 years from now will probably not look like the jobs of today,” she says. “But I still believe there will be jobs that humans are needed to do.”
Strolling through downtown Oshawa with Rebecca is to see both its past and future.
There’s a yoga studio across from the Smoke Time Corner Store and a Singer sewing machine store down the block. Nearby are a “paleo meat” place and—perhaps to balance the karmic scales—a vegan restaurant. And a hipster coffee house. But five of the six banks have been replaced by payday loan outlets, she points out, as the loss of manufacturing jobs continues to leave many adrift.
Rebecca’s grandfather lives a block west of her regular breakfast place, the White Apron Restaurant. In the diner’s red leatherette booths, she’s spent hours musing about her options. With a day left before the buyout deadline in mid-July, she finally makes a decision: To hold onto her right to be called back to work, she turns the buyout down.
A few things tipped the scales. There’s fear. “Trying to cut ties is … ” She breaks off, struggling to formulate her thoughts. “Just trying to write up a résumé is excruciating.”
There are her prospects at the plant. Since the briefing at the Iroquois stadium, union leaders have told her they’re more confident GM will salvage 500 jobs, rather than 300. A large number of workers opted for the buyout, moving her up 985 spots, at last count in July, to No. 385 on the list of production workers eligible for callbacks.
But it could take as many as five years to be recalled, if at all, meaning she will still need to find another job. She would like to find work advocating on behalf of the broader labor movement. For all her frustrations, Rebecca’s belief in organized labor remains unshakable. “For sure, they have challenges, but their mandate is to improve the lives of working people, and we can expand that aim,” she says.
And finally, there’s her reluctance to walk away from the fight. “You do become emotionally invested in the challenge.”
In September, a day before Rebecca and her co-workers were laid off because of the U.S. strike, they released a study calling for the Oshawa plant to be nationalized, ideally to create a government fleet of green vehicles. Rebecca supports the EV movement and its benefits for the planet; she just wants to be part of it. And while she knows that persuading the government is a long shot, she’s feeling more optimistic than she has in months.
“Even if GM is done with us, I don’t think we should be done with us.”