GM's Proposed $520 Million Deal With Union Could Save Canada's Auto Industry

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Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.


1st Gear: A Future For Cars In The Great White North

Canada’s automotive industry is on the ropes. The North American automakers have increasingly turned away from the country to focus on cheaper and more profitable production in the U.S. and Mexico. Currently, Canada’s auto union Unifor is fighting for some guarantee of a future for the country’s industry and the thousands of people who work in it.

They may have just gotten it. The Detroit News reports General Motors and Unifor have a proposed deal that would invest more than $520 million (in Canada-money) into two plants and has promises for future products.

The Detroit automaker plans to spend about CA$400 million on the flex line at its Oshawa Assembly Plant and more than CA$120 million at the St. Catharines Propulsion Plant as part of investments in the four-year agreement reached late Monday with the Unifor union, according to the sources who asked not to be identified because the plans have not been made public.

Unifor President Jerry Dias did not name the new vehicles slated for the Oshawa flex line, but said the plant will be capable of building cars and trucks and that more workers will be needed at the facility; a consolidated line that produces the Chevrolet Equinox is slated to close in 2017.

“I expect we’ll be able to build pretty well anything within the General Motors portfolio,” Dias told The Detroit News on Tuesday.

Oshawa Assembly employs about 2,400 hourly workers. About 750 build the Equinox and 1,650 build the Chevrolet Impala, Buick Regal and Cadillac XTS sedans on a two-shift line.

The investment at St. Catharines is slated to include moving some powertrain work from Mexico, Dias told reporters early Tuesday in Toronto. It also will include new transmission work and extended production of the V-6 engine built in the facility, according to one source familiar with the plans.

Can this save Canada’s auto business? It’s a start.

2nd Gear: But It Comes With A Caveat

But! GM isn’t just doing this out of the kindness of its heart. The automaker “will be working with government on potential support,” The Detroit Free Press reports. And here’s what that means:

Automakers have previously promised investments in Canada but have backed off later after pushing the federal and provincial governments beyond the financial support they were willing to provide.

But today is a new day in Canada. Prime Minister Justin Trudeau and Ontario Premier Kathleen Wynne have repeatedly expressed a desire to support the industry. The Canadian government is quietly planning to change the key terms of its Automotive Innovation Fund, which has previously offered automakers low-interest loans to support investments in Canada.

Dias has said the change in the program could be critical. Trudeau will take political heat from many in Canada who will see grants to automakers as taxpayer support of an industry and its workers that demand more breaks than they deserve.

“I am pretty sure the federal government is going to step up more prominently in the future,” said Tony Faria, professor emeritus, office of automotive and vehicle research at the University of Windsor’s Odette School of Business.


3rd Gear: Volkswagen Shareholders Pissed To The Tune Of $9 Billion

Volkswagen’s investors are mad over Dieselgate losses and disclosures and now they’re seeking $9 billion in damages in court, reports Reuters:

About 1,400 lawsuits have been lodged at the regional court in Braunschweig near Volkswagen’s (VW) Wolfsburg headquarters, the court said.

The Braunschweig court said it received some 750 lawsuits on Monday alone, which marked the first business day after the anniversary of VW’s diesel emissions test-rigging scandal.

It said it brought in extra staff to process suits submitted by shareholders concerned Sept. 18 - the day VW’s manipulations were disclosed a year ago - could be the deadline to file.

Plaintiffs say the German carmaker didn’t inform shareholders quickly enough over its cheating software, which was installed in up to around 11 million vehicles worldwide.


4th Gear: The Challenges Of Self-Driving Cars

The feds are finally coming up with guidelines for autonomous cars in preparation for the testing and eventual deployment of what’s to come. As most car enthusiasts and tech people alike know, there is a lot at stake here and a lot one has figured out yet. Here’s The Detroit Free Press again with a good roundup of all the outstanding issues:

1. Self-driving technology is not yet ready for prime time: The risk in the new technology likely will come in the progression of Automated Driver Assist Systems that are already in many new vehicles, but which fall short of enabling the sensors, cameras, radar and light-detecting technology from guiding a vehicle without human input. For example, when 40-year-old Joshua Brown died in May when his Tesla Model S crashed into a tractor-trailer, the Tesla’s Autopilot feature was activated. But despite its name, the system was not fully autonomous. The car was moving at 74 m.p.h. and Brown did not retake control when the truck began to turn in front of his Tesla.

2. The future is unknown. The U.S. Department of Transportation and National Highway Traffic Safety Administration want to support more than impede self-driving cars even as they recognize how much they don’t know yet about how autonomy will be integrated into traffic flows dominated by human drivers.

3. How to educate consumers: This should be a very high priority for both manufacturers, suppliers, software developers and government regulators. The vehicles may meet all safety requirements, but if the owner doesn’t understand when he or she must re-engage, or if he or she perceives the vehicle to be fully autonomous when it’s only partially autonomous, bad things could happen.


Click the link to read the rest.

5th Gear: Bentley And Lamborghini Skip Paris Because VW Is Strapped For Cash

The Paris Motor Show is next week, and in another sign of the waning importance of auto shows in terms of unveiling new products, Mazda, Ford, Volvo, Aston Martin, Bentley and Lamborghini are all passing on attending.


The last two brands have Dieselgate-related cost cutting to thank for that, reports Reuters:

Bentley said on Monday it was skipping the crowded Sept. 29-30 show and would instead focus on small events to market more directly to buyers. Lamborghini said it was revising strategy regarding auto show attendance, including the choice of locations where the Italian brand wants to be.

Car-show extravaganzas cost millions of euros as brands, especially luxury nameplates, strive to outshine one another. VW will dispense with a glitzy gala in Paris and instead present stationary cars with a focus of executive speeches on design, a spokesman said.

“A crisis can lead to marginalisation, but it can also mark the turning point for something better, for a real change of tack,” Chief Executive Matthias Mueller told a staff meeting in Wolfsburg on Sept. 14. “We need to rejig the group” to boost profitability and catch up on new technologies, he said.


Reverse: RIP


Neutral: What’s The Biggest Immediate Challenge Facing Autonomous Cars?

Consumer acceptance? Unclear regulation? Tech not ready for prime time?



Hmmm... if Australia’s Ford and GM have the Falcon and Commodore, what should Canada have?