Take the Plant, Save the Planet

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A Socialist Project e-bulletin ... No. 1894 ... September 22, 2019
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Take the Plant, Save the Planet:
The Case For Nationalization and Conversion of the Oshawa GM Plant

Russ Christianson

It is a tragic irony that General Motors (GM) chose its hundredth anniversary in Oshawa to announce the December 2019 closure of its Oshawa assembly plant. This means the loss of over 15,000 jobs in Ontario: 2,200 GM assembly jobs, 300 salaried positions, 500 temporary contract positions, 1,000 inside and 1,000 outside supplier jobs, and a related 10,400 multiplier jobs. The closure of Oshawa’s assembly plant is estimated to decrease Ontario’s GDP by $4-billion per year until 2030, also reducing federal and provincial revenues by about $1-billion a year.

Over the months following the November 26, 2018 plant closure announcement, GM and Unifor (formerly the Canadian Auto Workers’ union) negotiated the Oshawa Transformation Agreement (May 2019) that promises:

* 300 stamping and parts assembly jobs and a $170-million investment.
* Donating the 87-acre Mclaughlin Bay Reserve to the City of Oshawa.
* A 55-acre test track for autonomous vehicles.

It has yet to... be seen, whether GM will keep its promise. But even if they do, it will still mean losing over 13,000 jobs and a major hit to the economy.

This preliminary feasibility study offers an alternative. The Government of Canada can provide the leadership to acquire the GM Oshawa assembly plant and repurpose the production to building battery electric vehicles (BEVs). There is a strong business case for this alternative, based on a triple bottom line analysis that considers the economic, social and environmental benefits:

* A public investment estimated at $1.4 to $1.9-billion to acquire and retool the Oshawa assembly plant for BEV production, and potentially manufacturing other products.
* Manufacturing and selling an estimated 150,000 BEVs in the first five years of production, for total sales of $5.8-billion.
* Estimated government procurement of one quarter of the BEVs produced in the first four years, representing about 23,000 vehicles with an estimated value of $900-million.
* Reaching a breakeven point in year 4, and making a modest profit in year 5.
* Creating over 13,000 jobs: up to 2,900 manufacturing-related (including 600 parts supplier jobs) and over 10,000 multiplier jobs.
* Decreasing CO2 emissions by 400,000 metric tonnes by year 5.

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