General Motors (GM) has announced plans to lay off 14,700 factory and white-collar workers in North America and put five plants up for possible closure. This includes Canadian operations.

In Canada, close to 3,000 jobs are being cut and the Oshawa GM plant is planned for closure.

GM had 8,072 employees in Canada at the end of 2017. 2,522 people currently work at the Oshawa plant.

The Oshawa assembly plant produces the Chevrolet Impala and Cadillac XTS cars. It also does the final assembly of the Chevrolet Silverado and GMS Sierra pickup trucks. The Impala and the Cadillac XTS are being discontinued, and the assembly of the pickup trucks will be moved elsewhere, which means there would be no GM product lines allocated to the Oshawa plant after December 2019.

Impact to Employees

The most obvious impact of the GM layoffs is to the employees. It’s not yet clear whether the laid off staff will receive buyouts, or what kind of compensation package will be awarded.

For about 3,000 employees in Canada, this means finding new employment and all the challenges that come along with it. It also means budgeting in the meantime until a new job is found.

If the people laid off are carrying a lot of debt, that could make things more complicated. This is because as Canadian interest rates increase, it’s becoming more expensive to carry debt. Depending on the compensation package, if there is less income coming in than there are expenses going out, it could be difficult to manage finances.

Impact to Businesses

It’s not only GM employees that are affected. The layoffs could affect Canadian businesses, too.

Take for example the businesses in the Oshawa community, or other areas of North America where GM layoffs are happening. Those businesses could take a hit. The employees who live in the area may be spending less, to stay on budget.

“It’s going to change the spending habits in this community,” Oshawa Mayor John Henry told the CBC, adding the effects will be felt instantly especially during the holiday season.

Other businesses who supply the auto industry, such as Martinrea International, have already indicated that they will be closing their plant in Ajax, Ontario that supplies the GM plant in Oshawa. There will definitely be a ripple effect to the local communities and the auto industry as a whole.

What to Do

Whether you are an employee or a business who is affected by the GM layoff, it’s important to have a plan.

• Take stock of your finances — your income and outgoing expenses. How much do you need to break even?
• Look into resources in your community for financial assistance — for laid off employees, that may mean collecting Employment Insurance (EI).
• Assess your debt. This goes for both individuals and businesses. If you are carrying a lot of debt, now is the time to do something about it. Look at how much debt you are carrying and make a plan to pay it off.
• Meet with a financial consultant. There’s help available. For instance, at Fuller Landau our experienced consultants can review your financial situation and make a realistic plan for weathering the layoffs.

The important thing to know is that there are options available.

At Fuller Landau Debt Solutions, we offer free, confidential consultations. Get in contact today to make a plan for your finances. We offer credit counselling, debt consolidation, Consumer Proposals, and Bankruptcy options.

Call us at 416-927-7200 or visit www.fullersolutions.ca.