As the era of General Motors as Oshawa’s economic engine draws to a close, local officials say it is critical to accelerate the further diversification of the economy in Durham Region, where retail jobs have traditionally paid much less than manufacturing work.
Optimists say the local economy has already become more diverse and resilient in response to the decades of decline in the automotive manufacturing sector since GM’s heyday in the 1980s, when the Oshawa plant boasted more than 36,000 jobs.
But it will take a lot more than a diverse jobs base to revive a “blue-collar community” impaired by the sputtering auto sector, says labour market analyst Tom Zizys.
“Durham has historically relied on two major industries — auto and nuclear power,” Zizys said. “There are different pockets of sectors that are starting to grow there, but I don’t think they’ve thought about what is a proper economic development strategy, linked to who lives in region.”
With auto-sector wages outranking most of those in the retail sector, Zizys said the region will be hard-pressed to replace the incomes lost if the 2,500 full-time auto manufacturing jobs that GM is shedding never come back.
And with the GM layoffs looming, competition will be stiff for a limited number of full-time positions in other fields.
“You can’t easily switch people,” he said. “When there’s a major layoff, particularly in something like manufacturing, those individuals have a hard time transitioning. They’re probably going to have to take a step back.”
Zizys said Durham Region lacks the diverse basket of good-paying jobs needed to shoulder the burden of 2,500 job cuts, not to mention the jobs that will be affected further down the supply chain by the GM shutdown.
A report commissioned by Unifor on the impact of closing the Oshawa plant found that if 4,100 jobs had been lost there in 2015, it would have translated into a loss of $436 million in labour income. The study pegged the total compensation, in wages and benefits, for an auto assembly worker at $101,257.
“I don’t think Durham has diversified as much as people might say,” Zizys said. “You can have job growth in other areas, but it doesn’t mean that those people who a laid-off are going to be able to take advantage of growth that’s happening somewhere else. That’s the critical issue.”
John Henry, the outgoing Oshawa mayor and incoming chair of Durham Region, says significant strides have been made to spread employment across other sectors. “We’ve had a reduction in manufacturing, but at the same time we’ve been able to diversify our economy and increase the other numbers,” he said.
Henry points to growing employers like Lakeridge Health, nuclear power generation facilities outside of Oshawa, and post-secondary institutions.
“We’ve got a lot of really good things going on right now,” he said. “We were halfway up the mountain until the (GM) announcement.”
Now, with the GM deadline looming, “We’ve got a year to start to prepare how we’re going to deal with this,” he said.
Henry remains hopeful that Oshawa’s fortunes could change if GM someday opts to build one of its next generation of vehicles at the plant. “Maybe they will find that product,” he said.
But meanwhile, “when those jobs are gone, they’re gone, and that’s still going to hurt us.”
Heather McMillan’s survived what many are now dreading. She lost her job at the Lear Seating auto parts plant 11 years ago, when GM shed 1,200 jobs at its Oshawa truck plant. About 350 people were laid off when her plant closed.
McMillan, who is now executive director of the Durham Workforce Authority, says that was a very different time. In 2007, unemployment in the area hovered at 18 per cent as workers in many sectors were losing their jobs due to the global economic recession. The unemployment rate now sits at about six per cent.
“Since the 2007 economic downtown, the Durham Region labour market as diversified,” McMillan said. “In that intervening time, we’ve seen the expansion of our post-secondary institutions and that has brought other kinds of businesses here. There has also been an expansion on the retail trades sector.”
Down the highway, Oshawa’s challenge is a sobering reminder for communities like Cambridge, Oakville and Alliston, which also depend on automotive industries.
New Tecumseth Mayor Rick Milne said Honda’s workforce at the Alliston plant now exceeds 4,000 employees, making it the largest employer in Simcoe County. And that’s not counting the automotive feeder plants throughout the region.
“If something like what happened in Oshawa happened here, it would be a disaster,” Milne said. “It would affect, I would imagine, about 8,000 people directly.”
Doug Craig, the outgoing mayor of Cambridge, hopes Toyota’s $1.4 billion investment on retooling its Cambridge and Woodstock facilities will serve as an indefinite lifeline for the company’s operation in his municipality. The two plants employ about 8,000 people, approximately 6,500 of them in Cambridge.
“I’m feeling relatively safe about Toyota in Cambridge,” Craig said. “We are thriving here.”
But if Toyota was to be plucked from his community? “It would probably be a worse effect than what the residents of Oshawa are going through with GM,” Craig said.
Oshawa’s ordeal is having a chilling effect across the province, says Oakville Mayor Rob Burton. He said the local Ford plant’s 4,600 jobs makes it his community’s biggest employer.
And while he says “the president of Ford Canada has assured me in no uncertain terms that this plant has a long and steady future ahead of it,” Burton concedes that no promise is ironclad.
“It’s a big world full of uncertainty and stuff happens,” he said. “I’m not sure if we ever get very many guarantees in life.”
Jason Miller is a breaking news reporter based in Toronto. Reach him on email: firstname.lastname@example.org
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