GM plant shutdown could slow market

GM plant shutdown could slow market

GM plant shutdown could slow market

News that the General Motors plant in Oshawa will be slashing jobs—possibly as many as 2,500— by next year doesn’t bode well for the small city east of Toronto, where the real estate market could consequently slow down.

However, according to the owner of Dan Plowman Team Realty Inc., any resulting nadir will likely be short-lived.

“The impact will be short lived,” said Dan Plowman. “People can only freeze their buying and selling for so long—and people do freeze when they hear bad news. I remember in the ‘90s, there would be shutdowns and layoffs at the plant, and people, of course, froze. It’s terrible that the collective bargaining agreement is not being lived up to by General Motors, but I also believe our town today is not as reliant on General Motors for its work infrastructure. Oshawa is very commutable to the City of Toronto now.”

Oshawa’s housing market has been on fire these last few years, but a downturn had already taken hold prior to the GM announcement late Sunday evening. It nevertheless adds fuel to the fire, says Plowman.

“Perception is reality and bad obviously has an impact,” he said. “I believe that when people freeze—in other words, when they’re scared or uncertain—they tend to be more conservative, whether with retail shopping or purchasing cars, or even buying secondary properties, but it only last a little while. I say 60 to 90 days.”

The economy in Oshawa, and Durham Region as a whole, is diverse enough today to absorb the lost GM plant jobs. Moreover, the union that represents the auto workers has come out swinging, making it clear that it doesn’t intend to go down without a fight.

"Unifor does not accept the closure of the plant as a foregone conclusion,"Unifor’s President Jerry Dias said in a statement. "Oshawa has been in this situation before with no product on the horizon and we were able to successfully make the case for continued operations. We will vigorously fight again to maintain these good-paying auto jobs."

Rosemary Madden, a Mortgage Intelligence agent based in Oshawa, notes that, in addition to the unfortunate timing, the layoffs will have a ripple effect.

“I’m sure it’s going to have a fairly big impact on the whole region,” she said. “You have to remember there are spinoff jobs from GM. I know there are other outlying businesses that depend on it, but I don’t think it will have the same impact that it would have had years ago. Nobody wants to see people lose their jobs at this time of the year.”