In the depths of the recession, John LaCroix stopped at a traffic light in his green Ford Windstar and found himself struck by a wave of anxiety.
He had been working only part-time since being laid off at the Sterling Truck plant in St. Thomas in 2007 and fears about running out of money had been waking him in the middle of the night. Now, they were beginning to dominate his daytime thoughts as well.
“You’re stopped at a red light. There’s nobody around; you’re looking at your gas gauge and thinking of your money. ‘I’m wasting gas that I need. This is serious. This is food for my table. I’m not sitting here when there’s no other cars around. I’m going through this red light.’” And he did.
Mr. LaCroix’s journey through the recession reflects the devastation the manufacturing crisis has wrought on St. Thomas, the one-time railway capital of Canada that now has a strong claim to another, more dubious title: the Canadian city hit hardest by the recession and factory closings.
The shutdown of the Sterling heavy-truck plant, the looming closing of a nearby Ford Motor Co. factory and numerous other shutdowns have rippled well beyond Mr. LaCroix and thousands of others whose jobs have vanished, hitting social service agencies, the United Way, local school boards and taxpayers in the city and the surrounding area.
Few cities across Canada have endured the blow of having their two largest employers leave town in the space of a little more than two years. The Ford closing, scheduled for September, comes as St. Thomas is still trying to pick itself up after the recession, which wiped out about 250,000 manufacturing jobs across the country in 2008-2009.
The recovery from that crisis has been uneven across the manufacturing sector. While many companies and communities are bouncing back and new entities are rising from the ashes of closed businesses, the situation is taking longer to play out in places like St. Thomas. The city’s woes also underscore the dangers of becoming too reliant on one niche within the manufacturing sector. Its location in the heart of the auto making belt of southwestern Ontario has made it heavily dependent on that industry, which is recovering only slowly from the crisis that sent Chrysler LLC and General Motors Corp. into Chapter 11 bankruptcy protection two years ago.
The Sterling closing was one of a number of permanent shutdowns of large Canadian operations by offshore-based manufacturers. It wiped out more than 1,400 jobs in 2009, two years after Mr. LaCroix was laid off in 2007.
Ford will cut about 1,000 direct jobs when it shuts its St. Thomas Assembly Plant in nearby Talbotville, Ont., in September. With that, one of Mr. LaCroix’s part-time jobs will disappear – at Lear Corp., in St. Thomas itself, where the seats for the Ford vehicles are made.
The job at Lear was one of two jobs that helped Mr. LaCroix make ends meet while he studied for a diploma in community services work. They helped, but barely, because he was called in to Lear or GKN Sinter Metals, a manufacturer of powdered metal parts in St. Thomas, only if enough full-time employees were absent.
“I didn’t know if I [was going to]get a paycheque next week or not,” he says. “Or how much it’s going to be.”
He has led a nomad-like existence in both his working and personal life since Sterling let him go in 2007. Under the stress, his marriage ended.
He has had infrequent work at the adjustment centre set up by the Canadian Auto Workers union and Sterling to help workers find new jobs, retraining opportunities or educational assistance when their jobs in the plant were eliminated.
“I went 30 years without missing a bill – ever,” the 52-year-old says. But in December, 2008, he handed over to the bank the keys to the house he owned in Port Stanley, Ont., a beach community a 15-minute drive south of St. Thomas. Since then, he has spent periods of time staying with friends or acquaintances who needed some rental income to help pay their own mortgages.
His working life is on the road to recovery with a steady part-time job this month at a non-profit housing residence in London, where he will offer mentoring and counselling to residents. St. Thomas, too, is making some early steps toward recovering lost jobs by attracting some manufacturers, including Masco Canada Ltd., which took over the Sterling plant and now employs about 400 people making plumbing fixtures and other housing-related products.
St. Thomas won some spinoff benefits from the new Toyota Motor Manufacturing Canada Inc. plant in Woodstock, Ont., which gave that city a major boost during the recession. Takumi Stamping Canada Inc., which supplies metal parts to Toyota’s Woodstock plant, is expanding in St. Thomas and now has about 150 employees. St. Thomas has also retained some auto parts plants, notably two Magna International Inc. factories.
Masco and Takumi are examples of how the city is working hard to attract new businesses to replace those that have left, says Bob Wheeler, general manager of St. Thomas Economic Development Corp. He points to the price of industrial land and a skilled work force as advantages St. Thomas has in landing other businesses.
“We build things here and we do a good job at it,” he says.
But the full impact of the Ford closing won’t be felt until later this year.
In several empty factories near where Mr. LaCroix installed dashboards in truck cabs at what was once the Sterling plant, but is now Masco, weeds poke through the asphalt in empty parking lots.
One of those factories is a block south on Harwill Road, where the green lights on the loading dock at the former ZF Heavy Duty Steering Inc. plant still blink every few seconds to alert drivers that it’s safe to back up – even though the factory closed in December, 2009. A few blocks east of that is the soon-to-be-shuttered Lear plant.
Mr. LaCroix is watching his colleagues at Lear endure the same painful issues the Sterling workers faced.
“I’ve seen parents fighting with their kids because they have to tell them: ‘I don’t know if you can join hockey this year.’ “
Rod Potgieter, executive director of Family & Children’s Services of St. Thomas & Elgin County, has noticed the impact of the manufacturing decline in other ways.
“There’s increases in addictions, there’s increases in domestic violence and there’s increases in child abuse and neglect,” Mr. Potgieter says. “It kind of cascades down to us, but it’s a social artifact of the economic recession.”
In 2008, Elgin County, which stretches from Lake Erie’s north shore to the city of London’s south side and includes St. Thomas, had the largest increase in Canada of people seeking access to social assistance, he notes. His own agency closed fewer cases than it normally does during healthy economic times and transferred more cases to other agencies.
The effect is felt throughout the services industry and in the charitable sector, too. The loss of manufacturing jobs has had a dramatic impact on the United Way, for example. The Canadian Auto Workers union, which designates that fund-raising drive as one of its key priorities, represents workers at Ford and did so for Sterling’s hourly employees as well.
CAW members and other employees at Sterling contributed $300,000 annually to the United Way, says Sharon Lechner, who departed as chief executive officer of Elgin-St. Thomas United Way in May.
“A few years ago we [raised]$1.2-million,” Ms. Lechner says. “Last year we raised $712,000, so it’s had a huge impact.”
Mr. Potgieter points out that at one time, Family & Children’s Services received $60,000 annually from United Way to run a moms and tots program, mainly for single parents with pre-school children. That funding was cut to $26,000 last year and he no longer relies on United Way to finance the program.
In nearby Fingal, Ont., Jim McIntyre, Mayor of Southwold Township, where the Ford plant is located, is figuring out how he will cope with the loss of $400,000, or one-quarter of his tax base.
Ford pays about $2.3-million annually in local and school taxes, but that assessment has already been cut in half for the 2009 and 2010 tax years by the Ontario government in a move that Southwold and Elgin County are appealing.
The township increased residential taxes by 7 per cent or about $140 per household this year. But if Mr. McIntyre loses his appeal, he’ll have to come up with another $400,000 to cover the township’s portion of the refund to Ford.
The taxes that go to local municipalities and the healthy United Way contributions from people at Sterling and Ford were financed by jobs that pay some of the highest hourly wages in manufacturing in the country.
Production workers at Ford earn $33.90 an hour and have benefit packages that are among the best for workers in the manufacturing sector in Canada. When Sterling closed, assembly line workers were paid $29.16 an hour.
In contrast, the postings at the local Employment Services office on a recent morning revealed few manufacturing jobs available. There were postings for construction labour jobs paying $12 to $15 an hour, notices for truck drivers at $14 and a lawn-care crew-leader job paying $12.
This spring, Starwood Hotels & Resorts Worldwide Inc. held a job fair to fill openings at a call centre in St. Thomas. The jobs started at $10.25 – less than one-third of what Ford workers are making. More than 100 people turned out to apply.
Mr. Wheeler, the economic development officer, says St. Thomas is still trying to entice other manufacturers to set up shop in the city, but is putting a new emphasis on diversifying into food production and the green economy.
And with the ever-present sense of salesmanship that is a prerequisite for those holding his job, he even points to the Ford plant as representing a great opportunity for a manufacturer because it's close to Highways 401 and 402 and one of the railways that gave the city its name as the railway capital of Canada.
It's for sale for about $22-million.