Running at full tilt and loaded with workers, Cami Assembly in Ingersoll just slammed on the brakes.

One of Southwestern Ontario’s hottest manufacturers in recent years, getting $560 million in government investment only two years ago and employing more than 3,000 people, the automaker stunned workers Friday with news it’ll slash 625 jobs when it ships production of one vehicle to Mexico.

The fallout is expected to ripple beyond the automaker’s payroll, affecting the region’s large auto parts industry as well.

“It is a disaster — we are outraged. No one saw this coming,” said Jerry Dias, national president of the Unifor union that represent Cami workers.

Dias laid the blame for the cuts on the North American Free Trade Agreement, which opened borders tariff-free between Canada, the U.S. and Mexico.

The same trade deal has come under fire from newly elected U.S. President Donald Trump, who’s called it the worst deal ever for his country.

Shocked workers only learned of the cuts early Friday, said Mike Van Boekel, chairperson of Unifor Local 88.

“I don’t know why they are doing this. We are the No. 1 plant in North America, according to the Harbour Report. We are the most efficient and they are making record profits,” Van Boekel said of the award-winning factory.

“Our members are furious, they are pissed off. We have been working six days a week for eight years and now this. We have done everything they have asked of us. It is terrible.”

The layoff notices issued Friday take effect in July, the same month the company’s owner, General Motors, moving production of about 100,000 Terrain vehicles from Cami to Mexico.

The plant also builds the Equinox sport utility vehicle.

But GM Canada says the layoffs aren’t related to the Terrain moving to Mexico. Instead, it’s the fact the 2017 production of the Equinox overlaps with new 2018 model production, said Jennifer Wright, GM Canada communications manager.

“It has nothing to do with the Terrain, or Mexico. The 2018 model is the next generation and there has been an overlap and that is now ending,” she said. GM Canada in 2015 announced an investment of $560 million in Cami to retool the plant for the new-look 2018 Equinox.

“We remain committed to Cami, we know it is an emotional day,” said Wright.



Workers stream out of the Cami plant in Ingersoll which has just been hit with a notice of permanent layoff of 600 workers by GM which is moving production of one of their vehicles to Mexico. The Cami plant produces the Equinox and the Terrain, photo was taken on Friday January 27, 2017. (MIKE HENSEN, The London Free Press)

Brendan Sweeney, an auto industry expert at McMaster University in Hamilton, said he believes making plants more efficient was the key to the decision.

While Cami was over-capacity — it had overflow Equinox vehicles assembled at GM’s Oshawa plant — the Mexican plant was under-used and all the company’s U.S. plants are full, he said.

“They have no capacity at plants in the U.S now, and this will make two plants near capacity,” he said.

“They could not really leave both at Ingersoll.”

This move will leave Cami at about 85 per cent capacity.

Sweeney downplayed suggestions Canada lost production, and not the U.S., due to American protectionist measures under Trump.

A move like this is planned months in advance, long before the recent presidential election, he added.

“Cami will not close, but it will be under-capacity,” he said.

It’s also critical to remember that over the last five years automakers have increased their Ontario investment, with only GM reducing its footprint, said Sweeney.

“Ford, Toyota, Honda and FCA (Chrysler) have all increased investments. Three years ago, GM was the number one vehicle maker in Canada, and after this year it will be number four.”

Employment last year at vehicle assembly plants in Canada was up seven to eight per cent and at parts plants by four to five per cent.

“This news will scale that back, but it is the first bad news since 2015. We are still better off than 2015,” Sweeney said.

Cami’s London-area suppliers include Brose, Qualtech Seating, Martinrea, Autoneum and London Automotive and Manufacturing.

“We are concerned about it, but we have a lot of different customers,” said Dave Kingston, account manager at London Automotive and Manufacturing.

“We are still very busy but we are not sure how this will impact us. It is too early to say.”

The impact of the job losses will be felt throughout Southwestern Ontario, since Cami buys from several suppliers, many in London, said Jim Reid, president of Unifor’s Local 27, which represents workers at many parts makers.

“The loss of 600 good-paying jobs with benefits is an enormous loss to the London region. It is probably too early to say what the impact will be to the parts sector,” he added.

“Hopefully, both the federal and provincial governments can exert some pressure on GM to reverse their decision.”

The impact will also be felt in the small town of Ingersoll and its outlying rural areas, with less cash in the community for everything from real estate to shopping, said Michael Hennessey, former Ingersoll mayor.

“It will have a big impact — it will hurt us, no question. This is bad news,” he said.

Taking 600 paycheques out of an employer in a town of 13,000 will ripple into businesses like restaurants and stores, he said.

“But we are survivors, we will make it. It just might slow things down for a bit.”

Moving the Terrain will also end overflow production of the Equinox vehicle at GM Canada’s Oshawa assembly plant. There are no layoffs there as a result.

The London Economic Development Corp. agreed the layoffs will ripple back here, given how much the automaker buys from suppliers in Southwestern Ontario.

“It is extremely unfortunate. It will have an impact in the region. It highlights the importance of a well diversified advanced manufacturing sector,” said Kapil Lakhotia, the LEDC’s chief executive.

“In London, we are working to diversify manufacturing through aerospace, sporting goods and building products,” to name a few other sectors, he noted.

“We know there are suppliers here that do business with Cami and there are workers. There will be an impact.”

Unifor officials will meet with the company Monday to begin talks on mitigating the cuts. GM Canada will offer buyouts and retirement packages.

Cami began production of its new revamped Equinox Jan. 9.

Unifor has 2,800 workers now at the plant. Another 300 are in salaried jobs.

The company and union will begin talks later this year on a new collective agreement.

The Harbour Report measures plant production and efficiency.

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What they said:

“While families are suffering the news of these job cuts, Premier Wynne is writing open letters about the strength of the auto industry in Ontario. Premier Wynne is clearly out of touch with the reality facing families in Southwestern Ontario, and needs to take concrete action now to begin protecting auto jobs in the province.”

— NDP MPP Catherine Fife (Kitchener-Waterloo)

“Life continues to get harder and more unaffordable under Kathleen Wynne’s Liberal government. Taxes, fees and hydro bills continue to skyrocket, and the Wynne Liberals’ cap-and-trade cash grab is yet another new burden on Ontario families and job creators. It’s clear that Ontario is being left behind.”

— PC MPP Monte McNaughton (Lambton-Kent-Middlesex), the party’s economic development critic

“When an announcement like this is made, it sends a shock wave through suppliers and the entire economy. We have been asking the government for months to focus on remaining competitive through innovation and reducing taxes and regulations.”

— Barrie-area Conservative MP Alex Nuttall, Barrie area MP, critic for Fed Dev Ontario and innovation

ndebono@postmedia.com

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About Cami Assembly

— Created in 1986 in Ingersoll as a joint venture between General Motors and Suzuki Motor Corp.

— Plant production began April 1, 1989

— Builds the Chevy Equinox sport utility vehicle and GMC Terrain.

— Terrain production moving to Mexico in July.

— Now employs more than 3,000

— Recognized as the most efficient plant in North America four years in a row 2012, 2013, 2014 and 2015.,

— Won J.D. Power quality awards 2014-2016