The Electric Car Comes to Oakville
A Closer Look at a Feel-Good Story
Major auto bargaining has long been one of the most-hyped events in Canada’s labour calendar; historically rich in drama and closely watched for shifts in the flow of class conflict. Opening the latest round this summer, Jerry Dias, the head of Unifor, worked again to rev up interest in the negotiations, pugnaciously warning the ‘Detroit Three’ (Ford, GM, and Chrysler) that the recent history of repeated concessions was over:
“We gave up jobs, we froze wages, we made changes on our benefit plan, there were a whole host of workplace issue changes, but frankly that’s not in the cards [this time]… These are companies that have been printing money … so this is about progress for working class people.”
As it happened, interest in the new collective agreement was comparatively modest, and little public commentary surfaced on the extent of “progress for working class people.” In part, this reflected the longer-term decline in the leading role autoworkers have played. There was little expectation that the 2020 negotiations would be going down any intriguing bargaining paths, and this proved true.
But the more obvious reason for the comparative silence about the bargaining was that the action was elsewhere. In the midst of the contract negotiations, the news surfaced that the Ford Motor Company was bringing electric car production to Canada. Given the disastrous state of the Canadian auto industry, it was hardly surprising that news of a major new investment side-lined interest in the details of a labour agreement.
Elaborating on these developments takes us to larger issues. Does the Ford Motor example indicate a road to reviving the Canadian auto industry? How significant is the electric car as a response to the environmental crisis? Can unions bargain jobs? What role did the union play in Ford’s decision to make Oakville a key center for its electric vehicles? Are there alternatives to the subsidy-dependent government strategy? And above all, what is or is not ‘realistic/practical’ in today’s context?
Ford Motor to the Rescue?
Trading Places: American Autoworkers Lead
In the last decades of the 20th century, the Canadian autoworkers repeatedly challenged both the auto majors and the direction of their American counterparts in the United Auto Workers (UAW) – and proudly so, given the UAW’s acquiescence to concessions. The confidence that emerged in the Canadian union through the fight against concessions overflowed into it playing a central political role in the resistance within Canada to freer trade. All this brought great attention to the trajectory of the Canadian union.
By the turn of the millennium, however, that leading role of the Canadian autoworkers was clearly fading. The union did, nevertheless, continue to see itself, and present itself, in terms of a radical legacy long past. The recent bargaining round revealed, especially sharply, the change in the standing of the union; suddenly it was the US workers who led and the Canadians who followed.
In 2019, American GM workers, angry and frustrated with years of restraint alongside persistent job loss and with GM’s clear return to profitability, went on strike. Their goal was to restore regular real (after inflation) wage gains in each year of their agreement, remove the abomination of a union agreeing to workers doing the same work but with wide disparities in wages and pensions, and to reopen four plants scheduled for closure.
With the authority of the UAW’s top leadership in tatters from corruption scandals, the strike was led from below and lasted six weeks, the longest at GM in half a century. Only moderate wage gains were achieved, and the union got modest movement on bringing young workers to the top grade (all those hired before the new agreement came into effect were brought to parity; workers hired under the new agreement would still have to wait eight years).
In spite of the modest gains, the strike itself was a major breakthrough; it pointed to a possible revival of the long dormant UAW. It demonstrated the readiness of the workers to again take on the corporations, and the commitment of senior workers to the principle of wage parity for newly hired members made it possible to once again speak honestly of working-class solidarity. Crucially, the strike generated a new core of potential union leaders.
Unifor leadership did not identify the new militancy in the US as a development that Canadian autoworkers might, in turn, build on. Unifor might, for example, have fought in its recent bargaining for wage gains in each year of the agreement instead of alternating wage gains and lump sums. And, it especially could have followed up on the US lead in the fight to further reduce the years it took new workers to get to parity.
The economic space to take on the auto majors was certainly there. The cost savings per hour in Canada was substantive: conservative estimates suggested Canadian hourly labour costs that were at least $20 (Cdn) below that of an American worker – savings of $40,000 a year per worker and some $250-million annually across the Ford Canada chain. Yet, as in 2016 at GM, Unifor had no intention of seriously confronting the auto majors. Unifor basically accepted the UAW agreement (though, for some reason, it didn’t match the UAW’s modest improvement in the wage grid for Ford’s younger workers).
The union did move its four-year agreement back to three years so it would coincide with the US expiration dates and open the door to strategic cooperation in bargaining. This made sense, though it should be noted that even before the Canadian breakaway, when the US and Canadian autoworkers were in the same union and shared the same contract, concrete cooperation was never automatic. Formal international links do not necessarily translate into solidaristic internationalism. (It also raises the question of why Unifor isn’t similarly concerned with restoring its fractured relationship to the rest of the Canadian labour movement).
Canada’s Battered Auto Sector
Major investment announcements had occurred in previous bargaining rounds without side-lining interest in the labour negotiations. The difference this time was the near-panic desperation over the rapidly deteriorating state of Canada’s auto sector. As Dias went to great pains to stress, without an investment of the magnitude Ford Motor was proposing, and absent a product that was truly forward-looking, the fate of Canada’s staggering auto sector would seem sealed; but with it, there was hope.
As late as 2000, Canada was assembling 50% more vehicles than China. Canada was then one of a group of five roughly equal auto producing countries that, in terms of vehicles assembled, ranked only below the US, Japan, and Germany. That relative success was rooted in Canada’s historic trade policy, based on trade regulations that ensured that companies wanting to profit from Canadian sales had to maintain production commitments in Canada.
That orientation could not, however, survive the onslaught of a more general move to freer trade in the 1980s and 90s. For a while, the Canadian auto industry still retained advantages based on the legacy of the earlier investments, the proven quality of the products produced here, lower healthcare costs, and a Canadian dollar that for long stretches was significantly below the US dollar. Currently, every dollar of expenditures in Canada can be paid for with $.76 in US funds.
But industrial restructuring in the context of free trade eventually caught up to the Canadian auto industry. In 2004, GM had closed two Canadian plants, one in Oshawa and one in Ste Therese (the only such auto plant in Quebec). Going into the deep financial crisis of 2007-08, and especially afterwards, investments in Canada trailed other countries. By 2019, Mexico – which had assembled the same number of vehicles as Canada in 2000 – was assembling twice Canada’s number. China was assembling more than twelve times as many.
Between 2006 and 2019, 16 new plants were constructed in North America; all were outside the Great Lakes region. Ten went to Mexico, the other six to the US south. Canada got no new plants and, in fact, lost one of its two remaining Ford assembly plants (leaving only Oakville) and two more assembly lines in Oshawa, leaving once mighty GM Canada with the CAMI plant as its only assembly plant. The closure of GM’s massive Oshawa facility near the end of 2019 was a particularly costly and demoralizing blow. Once the largest auto complexes in North America, the closure of its last assembly plant ended over 100 years of vehicle production in the city.
Ford to the Rescue?
The announced investment by Ford Motor was clearly very significant. For the workers affected, for suppliers anxious for the work and access to new battery-related technologies and materials, and for anyone looking for some acknowledgement that carbon fuels are on the way out, this was a rare feel-good story. Yet, as welcome as the investment is, it is only a dent in the twin crises of Canada’s auto sector and the environmental crisis.
The new project is dependent on the future market for electric cars, which is, among other things, closely tied to whether governments will radically accelerate standards that limit carbon-based vehicles and initiate the mass construction of electric charging stations, all while the industry significantly lowers the prices of electric vehicles. It is especially dependent on the unknown of Ford’s future competitiveness within that market as other companies race in.
Even if the Oakville project does come to fruition, it will not come close to offsetting the tens of thousands of auto and related jobs recently lost, nor the additional jobs that will likely be lost in Canada before Oakville reaches full production of electric vehicles in 2028. And even at that point, Ford Motor forecasts that Oakville itself will have some 500 fewer workers than it currently has.
In any case, this particular investment, resting on the $295-million subsidy from each of the Federal and Ontario governments (a share of the total investment involved that is significantly higher than recent norms), cannot leverage a full ‘auto strategy’, never mind a broader Canadian manufacturing base. For one, a strategy of keeping corporations investing by offering lower taxes and higher subsidies leads, as we’ve seen, to raising inequalities and cutting social programs.
Moreover, even if such strategies of blackmailing governments and citizens for jobs proved successful, it would only invite every jurisdiction on the continent to do the same, raising the bidding costs while reducing the likelihood of being one of the ‘winners.’ While it can be hoped this strategy will work in Oakville, it is not a model for general economic success.
What of the environmental significance of making Oakville a major hub for electric cars? As noted earlier, the recognition that we will have to gradually phase out carbon-driven transport is clearly positive, but depending on fragmented, profit-driven corporations to be ‘incentivized’ to solve a crisis they were so fundamental to creating, is not an environmental plan. As is, Ford’s investment is scheduled to fully come to fruition only in eight years, and this leaves it to other companies to follow suit or not, depending on their evaluation of financial risk, not the social and environmental risk. Absent a willingness and capacity to force companies to respond to what some have called ‘an existential threat for humanity’, we can’t tackle the scale of the frightening scenarios we face.
Moreover, though private cars will likely remain a feature of modern life for some time, if it becomes imperative to ration the number of vehicles on our roads – the present pandemic demonstrates how the implausible becomes normal in emergencies – we will have to make choices. Should the priority be the further expansion of private cars or of public transit? Private cars or car-sharing vehicles that are integrated with the public transit system? Private cars or fleets of government-owned vehicles serving the public interest (see Green Jobs Oshawa, below)?
If the reality is that the number of private cars will, out of environmental necessity, soon peak and then decline, then it follows that building private cars will not provide the jobs people are hoping for. But if the environmental imperative demands the restructuring of everything about how we live, work, travel, and interact having to be transformed, isn’t this where we should be looking for developing the technological and productive capacity we will need?
Thinking Bigger
The Dilemmas of Bargaining for Jobs?
Unions are structured to negotiate the working conditions and compensation of their members. The dilemma unions face, especially at times of slow growth and economic restructuring, is that their members’ first priority is hanging on to their jobs. Trying to solve this dilemma within the bargaining relationship is very often a trap. The union demand to reverse layoff and closures inevitably turns to the familiar company reply: ‘What will you give up in order to keep (or get) the jobs?’
In the late 1970s, American workers were facing intensified competition from abroad. The question of concessions for job security was at first debated in abstract terms. With political winds going against them, the union reluctantly accepted this strategy of trying to get jobs in exchange for concessions. After each bargaining round, the UAW proudly claimed that this time, they had truly achieved their goal. When the concessions began in the 1979 bargaining round, GM had 321,000 UAW workers. After the endless rounds of concessions in wages, benefits, and working conditions, GM went into bargaining in 2019 with some 46,000 UAW members on its payroll (a decline of over 85%).
In 2016, the workers in Oshawa were vulnerable to losing Oshawa’s remaining assembly plant. In spite of the union having criticized the concessions-jobs trade-off for years, the leadership sold severe concessions for a ‘job guarantee’. When GM rescinded its commitment, the union launched a massive advertising campaign to ‘shame’ GM into reversing its decision. Eventually GM agreed to produce some aftermarket parts employing some 300 workers (out of 2,300 direct GM employees and approximately the same number of indirect workers).
This was a very difficult moment for the union, and it is important to be clear about which criticisms are fair and which not. Based on past experience and past union policies, it was a mistake to sell the 2016 GM agreement and its major concessions on the basis of GM’s jobs promise. That promise was, from the very beginning, suspect; the work involved was ‘overflow’ work from other plants that was always conditional. Moreover, there was no enforcement mechanism should GM not deliver. As is common, such corporate assurances always come with weasel words about the future state of the market and sales, a matter of uncertainty for the workers but a ‘necessity’ for the companies since they know that in a capitalist economy, they control neither the market nor their place within it.
It is also fair to challenge the claim that the union did ‘everything possible’ to fight GM’s decision. This rings hollow. The workers certainly did not think so, as the film on the closure of Oshawa, Company Town shows, and as the head of Oshawa local’s political action committee pointed out very soon after GM’s announcement. A genuine response would have involved a concerted effort to get the workers directly involved and to disrupt GM’s production of trucks that were still coming off the line and highly profitable. This would have meant assembly plant occupations, cutting off supplies from other plants, or possibly even having a block of the 13,000 thousand GM retirees in Oshawa return to close the plant with picket lines.
But to suggest that such protests would have prevented the closure would be unfair to Dias. They might have led to better severance pay, especially for workers at the suppliers, but no level of union protests would have reversed GM’s Oshawa closure. GM had made a major strategic shift in its forward plans that included closing four large US facilities. It went ahead in spite of opposition from Trump and even though, coming on the heels of the recent US-Mexico-Canada trade agreement, the closures also contributed to discrediting Trump’s argument (paralleled by Dias) that the agreement would bring job security for US workers. But GM was not about to further rub dirt into American faces by reversing its decision in Canada, but not in the US.
To admit this is not however, to accept that nothing more should have been done. Direct industrial action would have touched popular sympathies. It would have forced the closure onto the political agenda and prevented the Federal Liberals and Ontario Tories from slipping away in the fog with nary a criticism of GM. It could have led to an essential public discussion about the direction of the country. Struggles don’t always have immediate or observable effects but are absolutely essential to the historic process of effecting substantive social change, something captured in the popular autoworker slogan ‘Fighting back makes a difference’.
Wrong Lessons
In contrast to GM, the Ford investment – at least for now – seems like a clear victory. Dias has claimed a significant role in that ‘home run’. Given that even partial wins are so rare it would be churlish to criticize Dias for any exaggerations. The point is not to score points but to question some of the ideology and political lessons drawn by Dias’ victory lap.
Dias had important links with the Liberals. He had been an informal advisor to the government in the free trade talks and both Freedland and Trudeau attended Unifor’s convention to pay their respects for his role in assisting in the talks and then in legitimating the agreement. It is reasonable to accept that he helped facilitate the Ford Motor and government discussions. But that only poses the question of why those relations didn’t come into play in the closure of Oshawa and dozens of other plants.
More important, it tends to reinforce notions that back-room deals are the critical factor in these events. But, just as Dias can’t be blamed for letting GM close Oshawa, Dias can’t be given credit for Ford’s investment. In the Ford case, unlike the GM case, Ford Motor wasn’t in the midst of a major shake-up and was actually interested in maintaining the Oakville facility. Since Ford Motor was interested in Oakville independent of union or government pressure, it followed up on how much the two layers of government would give them to do so (the subsidies amounted to about 1/3 of the total investment).
The Liberals welcomed not only the jobs but saw an opportunity in electric car production to offset some of the criticism thrown at them for their massive expenditures on pipelines (they were not fazed by the economic contradiction of building more pipelines while supporting cars that won’t need the oil flowing in the pipelines. As for Ontario, where one of the first things Premier Ford did upon coming to office had been to remove the subsidies encouraging people to buy electric vehicles, he instantly transformed into an electric-car enthusiast. There may have been a supportive role for the Unifor leader in all of this, but it was not decisive.
On the other hand, to suggest that Unifor’s GM campaign served as a warning to Ford Motor is particularly far-fetched. It takes away from an honest discussion of what unions must consider if they are not to be repeatedly faced with the narrowest of options. Unifor’s GM campaign was a sign of union weakness not strength, and if the outcome of closing 95% of the GM Oshawa plant was a lesson of any kind for Ford, it would have been that they could look good even with a minor investment in electric vehicle production in Ontario.
Thinking Bigger: Green Jobs Oshawa
Green Jobs Oshawa (GJO) is a group of former GM workers and community activists that emerged in the shadow of GM’s closure of the Oshawa plant. What distinguished the group was the following half-dozen inter-related perspectives.
First, we need to think beyond GM and private corporations competing for profit. The record is clear; they will not ultimately give us a strong manufacturing base and jobs. The alternative is placing the Oshawa facility under public ownership (federal government ownership or municipal ownership with federal support).
Second, we need to think beyond the auto industry. In the context of the environmental crisis, no one any longer sees auto as a growth industry in terms of jobs. The capacities we have – skills, equipment, underutilized facilities – should be converted into producing everything we will need to address the environmentally-sensitive restructuring of everything about how we live, work, travel, and enjoy leisure.
Third, we need to think beyond competition. Placing facilities under public ownership and then having them compete with Mexico, China or the US for market will not deliver security. We need planned production based primarily on public procurement for social use (postal vans, utility vans, ambulances, mini-buses, cars for car-sharing that are integrated into our public transit system).
Fourth, a feasibility study commissioned by GJO has made a convincing case that experimenting with this kind of orientation can begin in Oshawa by focussing on electric fleet vehicles purchased by different levels of government (postal vans, utility vehicles, ambulances, school buses, mini-buses, and municipally shared vehicles).
Fifth, all this will require the development of new capacities and new institutions such as a National Convergence Agency and Regional Technology/Environmental hubs staffed by hundreds of young engineers.
Sixth, as sensible as these recommendations may seem, none of this can be achieved without deepening workers’ understanding of what we face, and building the social support and political capacity to bring something far better to life. This challenge especially includes developing unions that can escape their limits as defensive organizations coping with the specific problems of their members. We should by now see that specific problems necessitate taking on the broader issues that affect the working class as a whole, and this demands unions that grasp the potential leading role of working people in making what once seemed impossible, not only imaginable but even feasible (for more on this see Herman Rosenfeld’s conclusion to his review of the film Company Town).
The Radical is Now the Practical
The issue of jobs will obviously be raised in the upcoming negotiations with GM. It would be nice to be surprised with more good news. But that seems very unlikely. In that context, why hasn’t the union been leading in arguing for the interim option of producing, in a subsection of the Oshawa plant, the N95 respirators that front-line workers so desperately need now? As the second wave intensifies globally, and imported sources (US and China) dry up, producing such masks locally is hardly ‘unrealistic’ – especially when GM is already making such masks in Warren, Michigan?
Why wouldn’t the union play a leadership role on the big issues of our times by raising larger possibilities rather than dismissing them? How else do new possibilities ever get on the agenda? Why wouldn’t it call for Oshawa to become a hub for experimentation with what could be done to link productive capacities and social needs, particularly those of the environment?
The attack on such suggestions has been to write them off as ‘impractical’. But there is nothing more impractical (or more unrealistic) than to keep banging our heads against the wall and expecting different outcomes than the failed outcomes we’ve suffered through for decades. The only way to escape the limited options we repeatedly face is to think bigger. Going beyond the existing constricted options is a radical notion and is in fact the only hopeful and practical thing to do. What is truly practical in this topsy turvy world has become the radical. •
