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Hideo Kitawaki, Hitachi CEO at his plant in Guelph, Ont., in February, 2012. Mr. Kitawaki says laying off skilled workers during market slumps makes it difficult to recover from them.

Glenn Lowson/The Globe and Mail

As president of a company that makes giant mining trucks, Hideo Kitawaki has endured his share of economic cycles.

For Hitachi Construction Truck Manufacturing Ltd., in Guelph, Ont., the downturns themselves are bad enough, but the traditional response to those cycles – layoffs of skilled, highly trained employees – has made recovery from the slumps difficult, mainly because of the time it takes to retrain workers.

"Skilled workers, that should be an important asset," Mr. Kitawaki said.

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So he and the company are adopting a no-layoff policy in order to make sure their employees stay with them during market slumps such as the one currently afflicting the company. The plan allows them to retrain their existing experienced workers in a new method of assembling trucks and avoid having to find new workers who would have to be trained from scratch.

"For us, laying off workers is the beginning of the problem," said Hitachi executive vice-president Bruce Murray.

Hitachi is trying to hold fast in Guelph and retain jobs that pay more than $24 an hour. Almost 500,000 Canadian manufacturing jobs have vanished since 2000, a large proportion of them in the manufacturing belt of southern Ontario.

Keeping the jobs here runs counter to the actions hundreds of other companies have taken in recent years in the face of globalization and the high Canadian dollar, which was to shut their Canadian operations and eliminate the jobs or move them to lower-cost jurisdictions.

That makes the Hitachi solution a novel one, but the company and its suppliers want financial help from government to make it work.

To compete globally, Hitachi must transform its Guelph plant into a world-class factory and make productive use of the downtime during the current slump in demand for giant trucks that can carry 300 tonnes of ore, he said.

Hitachi has asked the Ontario government for financial assistance and also plans to approach the federal government to help out the company, and in particular, its suppliers.

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"We're not asking either level of government to pay for it," Mr. Murray said. "We're not looking for a dollar for dollar subsidy, we're looking for recognition that there is an issue and [they] understand and want to help."

Putting together mining trucks is a complicated operation. The Guelph facility employs 400 people, about 200 of whom assemble smaller units that can haul 100 tonnes or 65 tonnes of ore.

Hitachi is changing the way it builds the trucks to make it more efficient and cut the time it takes to assemble one of the behemoths to as few as 30 days from 90 days.

"Philosophically, the shift we've made is that we no longer manufacture trucks," Mr. Murray said. "We manufacture sub-assembles, we assemble trucks."

Quality and productivity decline when many workers are in the midst of the 18-month period it takes to train them, he added. If a rear axle is manufactured incorrectly and fails in a truck at a mine, Hitachi faces a $200,000 charge to repair it.

The company's appeal to the Ontario government was made first to Education Minister Liz Sandals, who is also the MPP for Guelph. The proposal is now in the hands of the Ministry of Economic Development, Employment and Infrastructure.

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Brigitte Marleau, a spokeswoman for the ministry, said officials have met with Hitachi, but would not comment further.

The initiative is backed by suppliers. Mr. Murray said suppliers don't have the financial resources to retain employees when production slows because of a downturn.

One of those suppliers, privately held Novacro Machining Inc., machines wheels, axles, rims and most of the undercarriage of the Hitachi mining trucks.

It takes five years of training for a machinist to become proficient, said Nick Montecchia, manufacturing manager of Novacro, which employs about 70 people at two plants in Stoney Creek, Ont.

"When someone is continually laid off, it discourages them from from wanting to be in the work force," Mr. Montecchia said. "There's a cost associated with trying to retrain, and spending all that to get someone to become proficient. If you're constantly battling that, you're not going to be proficient in your operations."

Any government support programs that would help Novacro compete would be welcome, he said.

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If Hitachi workers get laid off and find other jobs, they don't return, said Robin Dudley, the Hitachi unit chairman of local 1917 of Unifor, which represents workers at the truck factory.

The union supports the initiative, but said workers have some trouble believing a company does not want to lay off workers during a downtime.

Mr. Murray pointed out that the issue of government support for manufacturing companies runs deeper than Hitachi's request.

"Our longer-term mission is to take this company to a different level in terms of productivity, but also culturally trying to move away from the standard kind of Southern Ontario, old industrial approach to things, which doesn't work."

Without a change in approach, "the few jobs that are left in Ontario of this nature will be gone forever."

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