How Oshawa Landed the Camaro Automotive News
By Jamie LaReau
Aug. 28, 2006
DETROIT - You could say that UAW workers at General Motors' Oklahoma City plant lost their shot to build the Chevrolet Camaro by two minutes. And GM won by 120 more vehicles a month.
As a result, the nearly 6,000 Canadian Auto Workers at the Oshawa, Ontario, plant walk away with their livelihoods.
GM will get 30 minutes more production a week at its three-shift Oshawa plant in exchange for the chance to build the Camaro, GM and union sources say. That translates to an additional 120 vehicles a month. GM product czar Bob Lutz has said GM expects to sell 100,000 Camaros annually.
CAW hourly employees gave up two minutes of paid break time per eight-hour shift, among other concessions, to win the chance to build the new muscle car. Last week, GM said it would begin building the Camaro in Oshawa in late 2008.
On the morning of Feb. 9, CAW President Buzz Hargrove and Local 222 President Chris Buckley boarded an airplane for Detroit to meet with GM executives. It was to be a routine update meeting.
This time Hargrove and Buckley had their own agenda, though.
The men knew full well that GM had targeted Oshawa's Line No. 2 as one of
12 facilities it would close by 2008.
"During the meeting, I raised the issue that we're looking for product for plant No. 2 in Oshawa, and the Camaro would be a perfect fit," Buckley says. "I told them we've proven we can produce a product better than anyone in the industry."
The J.D. Power and Associates Initial Quality Study ranked Oshawa Line 2 as having the highest quality in North America for 2005. Another influential industry study, the Harbour Report, ranks Oshawa Line 2 as the second-best plant in North America for productivity.
But Buckley knew quality alone wouldn't be enough to get a new product. "It was no time to roll the dice with thousands of our members' futures," he says.
Buckley saw an opportunity to offer GM a compelling business case, in the form of giving up some jobs and some benefits to ultimately save nearly
Buckley had GM's attention.
To win the Camaro for Oshawa, Ontario, Plant 2, the CAW agreed to Give up 2 minutes of break time per 8-hour shift. Eliminate 200 CAW members in skilled construction trades at the plant. Workers will not be replaced once they retire. Cease to represent housecleaning employees. About 500 employees who retire or take a restructuring benefits package will not be replaced.
Just three days after that meeting, GM agreed to begin discussions with CAW leaders in Oshawa, Buckley says.
The CAW began work with a GM Canada team headed by Michael Grimaldi, then president of GM Canada and now CEO of GM Daewoo Auto & Technology Co. in South Korea, and a GM corporate team assembled by Gary Cowger, GM's group vice president of global manufacturing and labor relations.
"At the time, when the business case was being pulled together at GM to build the Camaro, it was pretty much known that Oshawa was the lead plant under that study," says a source inside GM close to the negotiations.
But Buckley says a GM plant in the United States also was in the running.
GM declines to name the other plant. But UAW sources say it was the Oklahoma City plant, which has been on permanent layoff since Feb. 21. The plant built the Chevrolet TrailBlazer EXT, GMC Envoy XL and Isuzu Ascender EXT SUVs.
The source inside GM says UAW Local 1999 in Oklahoma City, along with area and state officials, approached GM leaders in late March about building the car. GM met with them in Detroit in early April, but it was more as a courtesy than as a serious consideration, the source says.
"The decision to cease production in Oklahoma City back in February was final," the GM source says.
The source says the cost to convert Oklahoma City, a truck plant, to car production was too high. The source says no other UAW locals approached GM asking to build the Camaro.
Buckley says the CAW met daily with the GM teams for two weeks, going over a lengthy list of GM demands.
Buckley would not go into specifics. But he said, "We would not touch wages, benefits, pensions, paid time off - those are motherhood issues that our members have fought long and hard for, and we were not going backward on those issues."
Ultimately, the agreement that CAW members approved in early March included concessions such as trimming nonautomotive workers from union ranks. (See accompanying box.)
And it included the cut in break time. Two minutes every eight hours might not sound like a lot to the layperson, Buckley says. But to union workers it means a lot.
"Our members work whistle-to-whistle on a very repetitive assignment, and every second of relief is earned and appreciated," Buckley says.
But a UAW leader, who asked not to be named, liked the trade-off, saying, "I'd rather give up two minutes of break time than 10 cents an hour."
For GM, those extra two minutes mean two more vehicles per shift.
The UAW leader speculates that government-subsidized health care in Canada might have been a factor in GM's decision.
But the source inside GM says health care costs were a minor consideration.
GM considered several factors, says Cowger. Those included "close work with the government on an investment package and the development of a competitive labor agreement with a very supportive CAW," Cowger said in an e-mail to Automotive News.
Beyond that, Oshawa's history of ranking high in productivity and quality helped, adds the source inside GM. Says the source: "It was almost their product to lose."