German industrial powerhouse Siemens AG is closing a gas turbine manufacturing plant in Hamilton, Ont., a move that will eliminate 550 factory jobs in the province.
The company said Thursday that it is consolidating all of its North American production of 60-hertz gas turbines - used by customers to generate electricity - at a plant in Charlotte, N.C. That means all the production currently taking place in Hamilton will move south.
The expanded operation in Charlotte will start up in the fall of 2011, and the jobs at Siemens' Fossil Power Generation division in Hamilton will be gone in about 15 months, said Bill Smith, senior vice-president for energy at Siemens Canada.
About 90 per cent of the turbines made in Hamilton are exported, mostly to the United States. Once the transfer is complete Canadian markets will be served from North Carolina.
Some of the employees currently in Hamilton will be offered jobs in the North Carolina location, or at other Siemens operations, Mr. Smith said, although he could not set a specific number. In all of its operations, Siemens Canada employs about 5,000 people.
Mr. Smith said the shift is a "strategic decision" by Siemens to centralize manufacturing of the turbines at one location. He said "more than one jurisdiction" was approached about providing government support to the venture, but he would not say whether Ontario was asked for any subsidies.
The Associated Press reported Thursday that North Carolina provided Siemens with $22.75-million (U.S.) in tax breaks and grants to expand the Charlotte operation. The city and county promised other financial incentives, the report said.
Siemens Energy chief executive officer Wolfgang Dehen said in a statement that the new plant "will be the most advanced gas turbine production site in North America and set new benchmarks in terms of quality, productivity, and competitiveness in what is, by far, the world's most important power market."
The Canadian Auto Workers union, which represents employees at the plant, vowed to fight the closing.
"Only two years ago, I toured this plant with the upper management of Siemens, where I heard all about how productive and valuable our members were to the Siemens operations - now it seems the company has performed a brash about-face and plans to dump a plant that has been in the city of Hamilton for more than 100 years," CAW president Ken Lewenza said in a statement.
"Instead of keeping the work in Canada, where the facility is equipped to produce the turbines, the company is choosing to send it to Charlotte, North Carolina, where it will put $130-million into an expansion. That expansion should happen here in the city of Hamilton," he said.
"We worked hard to secure this investment in Hamilton, and our proposal to Siemens was very strong," said a spokeswoman for Sandra Pupatello, Ontario Minister ofEconomic Development and Trade. "We still believe that Hamilton is the ideal location for this investment - with a highly skilled work force, a record of top quality production and a competitive business environment. We're not pleased with the outcome, and we're concerned for the workers and their families who may be impacted by job losses."
Mr. Smith said Siemens hopes to expand some of its other manufacturing operations in Canada. Some growth may result from Ontario's Green Energy Act, which requires local manufacturing for components used in renewable energy projects, he said.