Intertape Polymer says it is closing and selling its last Ontario manufacturing facility nearly three years after a strike made the plant unprofitable.
“While some of the Brantford production will be transferred internally to other facilities, the company is in the process of selling the bulk of the business to a third party,” chief executive Greg Yull said Wednesday during a conference call.
The plant makes flexible packaging, including lamination and printing for the food and beverage industry.
A spokesman for the Montreal-based company said 81 employees of the plant in Brantford, Ont., have been on strike since August 2008.
Another 60 replacement workers will also lose their jobs when the plant closes May 25.
However, the union said 60 of its member employees remain on strike while another 26 have found other jobs, retired or died since the dispute began.
Intertape last year closed two smaller facilities in Hawkesbury, Ont., leaving it with 12 manufacturing sites in North America and one in Europe.
Its lone Canadian operations are in Truro, N.S., and Langley, B.C.
The company said it reduced $27-million of costs over the past two years and plans to cut up to $18-million more in 2011.
Union president Bruce Weber said that could spell trouble for the B.C. plant, which has already undergone job cuts.
The head of the United Steelworkers Local 1-500, which represents the Brantford employees, said Intertape is inflexible in its efforts to reduce costs.
No talks have been conducted in about a year even though the union agreed to cut wages, benefits and pensions by 16 per cent, he added. That's less than the 25 per cent sought by the company.
“From the outset it was their way or the highway,” he said in an interview from Hanover, Ont.
Mr. Weber said the Brantford employees, many of whom are nearing retirement, will be disappointed and angry but not totally surprised by the closure decision.
“When a strike continues for what would have been three years in August, something is bound to happen.”
He vowed to examine the Brantford sale to protect the union's successor rights. But spokesman Rick Leckner said the buyers have no responsibility to any Intertape employees.
Intertape reported a net loss of $43.4-million (U.S.) or 74 cents a share in the fourth quarter, with $180-million of sales. The loss was more than five times higher than the $8.5-million or 14 cents per share reported in the year-earlier period.
Part of the company's increased loss was due to higher provisions for closures and restructuring, but the biggest increase was a provision for future income taxes, which increased to $30.3-million in the fourth quarter from $2.5-million a year before.
That loss, which the company reports in U.S. dollars, included nearly $8.1-million for closures and restructuring, including $7.4-million related to Brantford. Another $1-million to $1.5-million in charges is expected this year.
The Brantford closure will increase Intertape's earnings before income tax, depreciation, and amortization by $4-million but reduce sales by $10-million.
Ontario Federation of Labour president Sid Ryan said the lengthy strike and plant closure highlights the need for the province to reinstitute a law banning replacement workers to reduce the duration of strikes.
“Premier McGuinty should be ashamed of his government for letting these workers rot on the picket lines for two-and-a-half years while busloads of replacement workers rolled past them on a daily basis,” he said in a news release.
Replacement workers are banned in Quebec and British Columbia. They have been permitted in Ontario since the former Conservative government of Mike Harris changed labour laws in the late 1990s.
A private members bill proposed by the NDP's France Gelinas would ban the use of these workers in strikes and lockouts.
Intertape's fourth-quarter sales increased 12 per cent from $160-million in the year-earlier period.
“During the quarter, the top line and volume performance of Intertape's two divisions remained relatively strong,” Mr. Yull told analysts.
Sales increased as expected from a year ago, but declined compared to the previous quarter due to seasonality and fewer days of operation.
Mr. Yull said the competitive environment remained intense, but the industry was able to boost prices to offset higher costs for materials like resins that increased by 30 per cent.
Additional price increases are expected as the costs of oil-based raw material have become even more volatile because of political turmoil in the Middle East.
The introduction of more than 30 new higher margin products in 2011 should help the company reach its target gross margin range of 18 to 19 per cent, Mr. Yull added.