As the dust settles on General Motors’ announcement to slash an entire shift at its Oshawa assembly plant, the ripple effects are now hitting suppliers. Magna International’s Automate division in Whitby has notified approximately 250 workers that they’ll be laid off by August – another blow to Ontario’s already fragile automotive manufacturing sector.
The layoffs will begin rolling out June 28, with the majority taking effect in August, according to Unifor Local 222, which represents workers at the parts supplier. The cuts directly correlate with GM’s decision to eliminate its third shift in Oshawa, which will impact roughly 1,000 auto workers starting June 14.
“We’re seeing the domino effect in real time,” says Flavio Volpe, president of the Automotive Parts Manufacturers’ Association. “When an automaker cuts production, suppliers immediately feel the impact. For every assembly job lost, we typically see 7-10 supplier jobs affected across the region.”
The Magna facility, located just minutes from the Oshawa assembly plant, produces seating components that go directly into GM’s vehicles. With reduced production volumes coming, the need for parts naturally decreases proportionally.
What’s particularly concerning is the timing. The Oshawa plant only reopened in 2021 after GM reversed its 2018 decision to close the facility completely. The reopening was celebrated as evidence of Canada’s continued importance in the North American auto manufacturing landscape. Now, barely three years later, a third of its production capacity is being eliminated.
GM has cited “moderating demand” in North America’s vehicle market as the primary reason for the cuts. While the plant currently builds profitable Chevrolet Silverado pickup trucks, sales have softened amid high interest rates and economic uncertainty.
“Consumers are holding back on big-ticket purchases like trucks when monthly payments have shot up by hundreds of dollars due to interest rate hikes,” explains Julie Payette, an automotive industry analyst at Desjardins. “Even with healthy employment numbers, affordability concerns are keeping buyers on the sidelines.”
The layoffs reflect broader challenges in Canada’s auto sector. Despite federal and provincial governments committing billions to attract EV battery plants and assembly operations, traditional combustion vehicle production remains vulnerable to market fluctuations and cross-border competition.
For workers at both GM and Magna, the cuts represent personal economic hardship. Many had built lives around the steady employment and competitive wages these manufacturing positions provide.
“I just bought a house last year thinking this job was secure,” says Marcus Lee, a five-year employee at Magna who requested a pseudonym to speak freely. “Now I’m wondering how I’ll make mortgage payments if I can’t find something comparable quickly.”
The average wage for these manufacturing positions ranges from $22-35 per hour – well above minimum wage but increasingly rare in a service-oriented economy. Finding equivalent pay will be challenging for many laid-off workers, especially those with specialized automotive manufacturing skills.
Unifor, which represents workers at both facilities, has expressed disappointment with the decisions while working to secure the best possible transition support for affected members.
“We’re focused on ensuring proper severance packages and transition assistance,” says Jason Gale, Unifor Local 222 president. “But the real solution is maintaining production levels that keep these good jobs in our communities.”
The situation highlights the vulnerability of supplier networks in the automotive industry. While major automakers receive significant public attention and often government support during challenging times, suppliers can be left scrambling with fewer resources to manage workforce transitions.
The cuts also raise questions about the future of Ontario’s traditional auto manufacturing sector as the industry gradually shifts toward electric vehicles. While GM has committed to producing EVs at its CAMI plant in Ingersoll, Ontario, the Oshawa facility remains focused on internal combustion trucks and SUVs.
Provincial and federal officials have not yet announced any specific support for the affected workers beyond existing employment insurance and retraining programs. This stands in contrast to the substantial incentives offered to attract new manufacturing investments.
For the Durham Region, which has historically relied heavily on automotive manufacturing employment, the cuts represent another challenge in maintaining its manufacturing base. Regional economic development officials have been working to diversify the area’s employment sectors, but well-paying manufacturing jobs remain crucial to the local economy.
As the August deadline approaches, affected workers face difficult decisions about retraining, relocation, or holding out hope for a market recovery that might restore production volumes. For Ontario’s auto manufacturing sector, these cuts are a sobering reminder that despite recent investment announcements, the transition to a new automotive future will likely include painful adjustments along the way.
