Another manufacturing giant is closing its Canadian operations, dealing a further blow to the economically battered Southwestern Ontario region.
Bearing maker Timken Co. is closing a plant that had been operating in St. Thomas, Ont., since 1946 and employed 400 people at its peak in the 1970s, before the recession and cuts in production led to a factory running at just 20 per cent of capacity.
The closing will cost about 190 people their jobs, Timken said in a regulatory filing.
It's the latest closing to hit St. Thomas, which once punched well above its weight in manufacturing with a Ford Motor Co. assembly plant in nearby Talbotville, a Daimler AG heavy truck factory and numerous other smaller factories.
It's also part of a region still dealing with the closing of a Caterpillar Inc. locomotive factory in nearby London this year after a bitter labour dispute, and the closing three years ago of a heavy truck factory an hour farther west along Highway 401 in Chatham, Ont.
The jobless rate in London was 8.4 per cent in April. While that was down from the 8.5-per-cent rate in March, it was still higher than the national average of 7.3 per cent.
The Timken plant has been losing money and the company has more than enough capacity elsewhere to make bearings for heavy truck manufacturers, auto makers and industrial applications, spokesman Dan Minnich said Thursday from Timken's head office in Canton, Ohio.
"Much of the facility's customer base is in the U.S. That adds logistical and currency expenses to the cost of servicing those customers from Canada," Mr. Minnich said.
"We have capacity in the U.S. at plants that make similar products and we're closer to those customers."
The work will be shifted to plants in Ohio, North Carolina and South Carolina by mid-2013. The move will provide pretax savings of between $5-million (U.S.) and $8-million, the regulatory filing said. Timken posted profit of $454.4-million on sales of $5.17-billion in 2011.
The company will take a pretax charge of between $60-million and $70-million to cover the costs of the closing, including $20-million to $25-million for severance, environmental remediation of the site and relocation of assets.
There was no warning during talks on a new contract last fall that the company was considering closing the plant and it did not seek concessions from the union, said Kathy Cornish, president of local 4906 of the United Steelworkers, which represents the workers.
"No concessions, good contract, everybody walked away from the table happy; [contract]ratified; off to work we go," she said, although she noted that employees have been on a work-sharing program since January.
Both Ms. Cornish and her husband will lose their jobs after working at the factory for 24 and 26 years, respectively.
Workers were paid between $15 (Canadian) and $20 an hour in base wages with incentives for piecework on top of that.
She is well aware of the manufacturing crisis that has wiped out thousands of some of the best-paying jobs in that corner of Ontario.
"There used to be lots of factories around. Our youth had the option to go on in school or they could take their Grade 12 and support their family," she said. "Now there's just not a whole lot left of that whatsoever in St. Thomas."