“Prepare To Be Amazed.”

It’s the slogan emblazoned on city signs greeting residents and passersby in Oshawa, Ont. - but it’s also a message that the city’s economy could struggle to live up to amid General Motors Co.’s decline, and possibly full retreat, from the once-mighty automaking hub.

This week’s announcement that General Motors is planning a sweeping global restructuring sent shockwaves through the southern Ontario city, as the company’s Oshawa plant was revealed as one of five North American factories on the chopping block, with 2,500 jobs at the plant also on the line.

While the suburb located about an hour east of Toronto is bracing for GM’s retreat and potentially thousands of job losses, many residents and businesses are still trying to catch up after the shutdown of GM’s pickup truck plant in 2008. Yet despite GM’s decline, some still see a bright future for Oshawa’s economy.

“We’ve been through this before,” Joel Smith, who has worked at GM in Oshawa for 28 years, said in a BNN Bloomberg broadcast interview on Tuesday. Pointing to his peers’ work ethic and GM’s storied history with the city, Smith argues that generations of Oshawa workers helped build the U.S. automaker.

GM’s Oshawa plant is a stone’s throw from Lake Ontario at the south end of the city, in close proximity to some of the most vulnerable residents in the city, many of whom are concentrated in Oshawa’s troubled downtown.

As of Statistics Canada’s 2016 census, unemployment in Oshawa was 8.3 per cent, compared to the provincial average of 7.4 per cent. The median after tax household income is $32, 500 in Oshawa’s southern downtown, according to data compiled by Durham Region, well below the city average of $56,000, and below the $80,000 median income in its neighbouring city of Whitby.

In recent years many Oshawa residents have been moving out of GM’s shadow, and further north, to what the locals refer to as “Poshawa,” where household income jumps up to the Durham average.

Smith, who is also now an organizer for Unifor local 222, says the union also represents 32 different workplaces that are tied to the assembly plant.

“There’s a lot of talk about GM, but what about the thousands of workers that depend on GM being in existence through our supply chain?” said Smith, adding that there is talk of severance packages, and relocation options for GM employees, but smaller auto suppliers may be left high and dry.

In the wake of GM’s restructuring announcement, auto parts supplier Martinrea International, for one, said it will be forced to close its operations in Ajax, Ont., as it was dependent on GM’s footprint in Oshawa which is less than 20 kilometres away.

Oshawa's economic drivers go beyond GM and autos: Economist

The Conference Board of Canada's Alan Arcand joins BNN Bloomberg with his take on what's next for Oshawa, Ontario. He discusses the benefits of the city's proximity to Toronto and its efforts of diversifying beyond its declining manufacturing sector.

GM’s presence in Oshawa can be traced back to the industrial revolution and the McLaughlin Motor Car Company, which set up a successful carriage trade in the city’s downtown in the 1870s. Already a thriving industrial hub, in 1918 GM moved into the city and bought the McLaughlin family’s business, which had by then shifted to auto manufacturing.

The impact of GM’s Oshawa exit would be widespread, according to Alan Arcand, associate director for the Centre for Municipal Studies at the Conference Board of Canada. However, Arcand adds it won’t be nearly as damaging to the local economy as it would have been in the mid-1980s when GM employed nearly 23,000 people in Oshawa.

“We are forecasting the [Oshawa] economy to shrink in 2020,” Arcand said in a telephone interview.
“But going forward beyond 2020 I’m still optimistic about the Oshawa economy.”

That optimism stems from the fact that Oshawa’s economy has somewhat diversified over the years. Arcand points out Oshawa is home to three post-secondary institutions, which not only provides the city with jobs, but also paves the way for a highly-educated work force.

Another growing employer is Lakeridge Health, which boasts 16 sites in Durham Region, and employs nearly 5,000 doctors, nurses and other healthcare professionals. Meanwhile, Oshawa’s housing market, with its access to the 401 and 407 highways, and its proximity to Toronto, will continue to be attractive for young families seeking homes in the Greater Toronto Area, Arcand said.

However, historian Amanda Robinson works at one of Oshawa’s schools, and said she thinks if GM pulls the plug on its Oshawa assembly plant, nearly every family in the city will be affected.

“I was deeply saddened,” said Robinson, an instructor at the University of Ontario Institute of Technology, referring to GM’s restructuring plans in a telephone interview. “My extended family members and people I know are engrained into the auto worker culture, so it was definitely a blow to the city’s heart. With 100 years of automobile manufacturing, that runs deep.”

While no one is denying more hardships are ahead for Oshawa, Robinson said the hard-nosed town will persevere.

“People in Oshawa are industrious and very resilient,” said Robinson, pointing to a recent uptick in boutique coffee shops and restaurants opening in the city’s downtown core. “Our community will come together.”

If vacated, the land that the GM plant currently sits on could become a huge boost to the community, said Robinson, as Oshawa is in the midst of a decades-long battle over how to develop its waterfront.

“You can tell how well an economy is doing by looking at population growth,” said Arcand, adding that Oshawa is still a relatively affordable place to live in the Greater Toronto Area.

“And that’s been quite strong in Oshawa for a number of years – a little bit more than 1.5 per cent per year, well above the national average. I think all the things that have been driving economic activity in Oshawa for the last 25 years, will continue even after the closure of the plant.”