MONTREAL — US automaker Ford Motor Co. will shutter one of its manufacturing plants in Canada in 2011, a move that will cut 1,400 jobs, the Canadian Auto Workers said Friday.
As part of a cost-reduction agreement between the company’s US headquarters and the CAW, the plant in St. Thomas will close in the third quarter of 2011, the powerful union said in a statement.
Some 1,400 employees will be dismissed, CAW spokeswoman Shannon Devine told AFP. Canadian media put the number of jobs eliminated at 1,600.
As part of the tentative agreement the union said it obtained a commitment by the US automaker to keep at least 10 percent of its North American production in Canada.
The future of the St. Thomas assembly plant was discussed yesterday and the automaker repeated there is no product for the local plant after 2011, Lewenza said.
The Crown Victoria, Mercury Grand Marquis and Lincoln Town Car are produced at the plant.
“We want St. Thomas to be extended, but that product line is being phased out. They have capacity all over the place. It is not looking good today.”
Ford did emphasize in talks yesterday it has made significant investments in Windsor, reopening an engine plant next year, and has added a fourth vehicle to its Oakville assembly plant.
“They indicated to us . . . Canada has been a key player in Ford’s success, but there is no product to allocate.”
Canadian Auto Workers president Ken Lewenza says Ford Canada shouldn’t expect the same concessions that Ford Motor Co. (NYSE:F) won in recent talks with its union in the United States including a ban on strikes over wages or benefits.
“Obviously we watched the U.S. negotiations closely with the UAW because of the competitive challenges we have from one country to the other,” Lewenza said in an interview Friday.
The CAW says Ford Canada intends to slash its Canadian manufacturing presence from 13 per cent to eight per cent of total North American production. Ford currently has no plans to build vehicles at its St. Thomas, Ont., plant beyond 2011.
WINDSOR, Ont. — Despite investing millions in Navistar’s Ontario operations, the provincial government won’t intervene in a labour dispute that has seen Navistar International shift production from Chatham to Mexico, Sandra Pupatello, minister of economic development and trade, said Wednesday.
“The Ontario government has no role to play in the discussions between workers and the employer,” Pupatello said after addressing an automotive outlook conference at Caesars Windsor. “What is important is that we’ve created an opportunity for there to be significant investment in the Chatham area and in the University of Windsor. Our investment is geared toward R&D — that is creating the next generation of products coming out of Navistar and in supporting training costs for employees in Chatham.”
Formet Industries, St. Thomas
Posted by Ian:
Thanks to Serge Lavoie for the heads up on this positive look at this region’s manufacturing base. With plants and factories shuttered the length of South Edgeware and the Ford plant teetering, let’s hope that indeed the industrial engine is just idling.
So, here is the key question posed by the Toronto Star:
Without a revitalized manufacturing base, Ontario has little chance of a healthy economic recovery that delivers the good jobs and high productivity we need for sustainable prosperity.
So a key question as we face a federal election some time in the next 12 months is which party, Conservative or Liberal, can deliver the most effective manufacturing strategy for the province.
Hourly labour costs at Ford Motor Co. of Canada Ltd. (F-N6.84-0.13-1.87%) manufacturing operations are about $16 (U.S.) higher than similar costs at U.S. plants, sources close to the negotiations between the auto maker and the Canadian Auto Workers union said Friday.
Ford’s labour costs in Canada are higher than those anywhere else in the world, the sources said, meaning it’s difficult to make new investment commitments for its operations, such as the new products the CAW is seeking for a plant in St. Thomas, Ont., that is at the top of the endangered list.
“The hyper-competitive nature of this business globally means you just cannot be the highest-cost labour jurisdiction on the planet and expect those kinds of guarantees,” one source familiar with the discussions said.
Posted by Ian:
Drive along South Edgeware Road to get a first-hand look at the absolute economic devastation in St. Thomas, the result of the loss of up to 4,000 manufacturing and related jobs. Now with the pending closure of the St. Thomas Ford Assembly Plant in 2011, the fallout will be more than the 1,500 or so remaining jobs at the sprawling complex. Start with Lear, and the list of victims grows from there, as noted in this Globe and Mail story from Sept. 24/09 …
Closing the plant would be a serious blow to St. Thomas, which has already sustained the shutdown of a Sterling truck factory by Daimler AG, said Scott Smith, unit chair of CAW local 1520, which represents workers at the Ford plant.
If the Ford plant closes, suppliers are also likely to close, Mr. Smith noted, pointing to Lear Corp., which is operating in Chapter 11 bankruptcy protection and has a plant in St. Thomas that supplies seats to the Ford plant.