Ontario aims to replace GM with Magna, Martinrea or other in Oshawa

TORONTO -- The Ontario government has discussed with supplier Magna International Inc. and other companies that have expressed an interest in utilizing General Motors’ Oshawa, Ont., assembly plant once it’s vacant, says Ontario’s minister of economic development.

Todd Smith says he’s had conversations with Magna CEO Don Walker, who recently raised the possibility of using the Oshawa plant as a contract assembly operation to build cars if his company can secure multiple deals to build between 20,000 to 50,000 vehicles for a number of automakers each year.

“We’ve had conversations with everyone from Don Walker to [Martinrea International Inc. Executive Director] Rob Wildeboer, the Automotive Parts Manufacturers’ Association, all of the [automakers] currently operating in Ontario and others that aren’t currently operating in Ontario,” he said during an interview following a speech Thursday to the Automotive News Canada Congress. 

Magna didn’t immediately respond to request for comment, but in January, Walker expressed at least some conceptual interest in the plant.

Speaking during the 2019 Automotive News World Congress, Walker said if his company were able to secure multiple deals with manufacturers to build between 20,000 and 50,000 vehicles each per year, it would take a look at Oshawa, or a brand-new plant, as a North American venue for contract manufacturing. He noted that he started his career at the Oshawa plant 40 years ago. 

“We’ve been very busy. The automotive file is a very important one for Ontario,” Smith said.

The industry employs about 150,000 people in the province and five automakers will produce more than two million vehicles this year, according to provincial numbers.

Magna currently runs a contract assembly plant in Graz, Austria, but Smith said Ontario is emerging as a possible location for expansion.

“If there are opportunities out there, we’re looking, Don [Walker] is looking,” he said. “They are building cars on contract in Europe right now and with the moves we are making with modernizing the automotive industry here, making it more competitive, people like Don Walker and others are starting to turn their heads and say, ‘this government is on the right track,’ so hopefully we’ll hear some positive news.”

The province announced this week a $40-million plan aimed at assisting suppliers, boosting high-tech skills training and attracting investment.

While Smith said General Motors appeared steadfast in its decision to close Oshawa Assembly, he was confident the automaker would maintain a strong presence in Ontario.

“We’ve stayed in touch with General Motors. Obviously, it was a difficult decision for them to pull out of Oshawa and the allocation of vehicles, but they are not done with Oshawa by any means,” he said. “They are committed to a number of different projects at Oshawa.”

GM’s Canadian headquarters will remain there and “they are continuously investing in Ontario with their research and development in Markham, the CAMI plant in Ingersoll, the engine plant in St Catharines.”

“We want to make sure we stay in constant communications so that we can understand first of all what, it’s going to take to keep them competitive in business in Ontario and continuing to invest in Ontario and look to next steps for Oshawa.”

The government, he said, is committed to creating an attractive business climate for future investment.

“If [GM] decides sometime down the road there is an opportunity to start building cars there again, they know they have a partner in the Ontario government that’s willing to work with them.

“I know they are taking a lot of heat, particularly from Unifor and some in the community as well, but the one thing I want to stress is … they are going to continue to invest in Ontario in the auto assembly plants in southwestern Ontario or research and development or the Autonomous Vehicle Innovation Network, and those types of things.”