Auto sector hit by new shutdown

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Auto sector hit by new shutdown

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Ford's fall in Windsor

 

Ford Windsor casting plant: closed May 2007.

 

Ford Essex engine plant: idle since November 2007. Seeking new investment.

 

Nemak Essex aluminum plant: Ford owns about 7 per cent. To close in spring 2009.

 

Since the fall of 2005, Ford has eliminated about 3,000 jobs in the Windsor area. Next year's closing will wipe out another 600 jobs.

Ford, Nemak plan to close Windsor engine-parts plant, eliminate 600 jobs

 

Feb 07, 2008 04:30 AM

Tony Van Alphen

Rob Ferguson

Staff Reporters

 

Ontario's auto industry took another hit yesterday when Ford and Nemak announced they will close a major engine-parts plant in Windsor and eliminate about 600 jobs next year.

 

The two companies, which run the operation as a joint venture, said they will shut down the Nemak Essex aluminum plant in the spring of 2009 because of stiff global competition.

 

The move would push up the number of job losses at Ford alone in the beleaguered southwestern Ontario city to about 3,600 since the fall of 2005.

 

"We're virtually hemorrhaging jobs here now," said Mike Vince, president of Canadian Auto Workers Local 200, which represents Nemak production employees.

 

A Ford spokesperson said the two companies have not decided where they will move production of aluminum cylinder heads, but union sources indicated output will likely shift to Mexico.

 

Ford also hinted that Canada needs to be more competitive to win future auto investment. "All companies have to be globally competitive," said Kerry Stoakley, communications manager for Ford Motor Co. of Canada. "There is incredible competition around the world. That's why countries aggressively pursue auto investments. It's why it is critical that Canada offer a competitive business environment."

 

The company is currently lobbying for aid from the federal government to reopen an engine plant elsewhere in the city that has sat idle since November because of a lack of product.

 

Nemak received about $6 million from the Ontario government for a project relating to engine production processes at another Windsor operation in 2006. The company has collected about $3 million in conjunction with the firm's investments to date.

 

Vince and other union officials attributed the latest closing to the soaring value of the Canadian dollar and a lack of action by the federal government in trying to help Ontario's struggling manufacturing sector.

 

"We desperately need a manufacturing policy for this country because the devastation that is going on in this sector around here and the province is just awful," he added.

 

The union also wants Ottawa to use tariffs against offshore automakers because their countries don't offer the same access to Canadian autos.

 

The Ontario government estimates the province's manufacturing sector has lost more than 200,000 jobs since 2004.

 

Auto-parts makers have absorbed the brunt of the impact because the much higher dollar makes their exports more expensive. Furthermore, they are experiencing a decline in business from key customers such as struggling General Motors Corp., Ford and Chrysler.

 

The provincial government has pumped hundreds of millions of dollars into the sector in recent years with an emphasis on research, technology and engineering projects.

 

Economic Development and Trade Minister Sandra Pupatello, who represents a Windsor riding in the Legislature, said she was aware that Nemak had doubled its production capacity in Mexico while overcapacity existed at other operations. That made the Windsor factory vulnerable, she said.

 

She revealed the government approached Nemak about tapping into the government's $1.15 billion Next Generation jobs fund, but the company showed no interest.

 

"I have been worried; I have been reaching out to them," Pupatello said.

 

The downturn and shakeup in the auto industry has hammered Windsor in recent years. A Chrysler assembly plant closed in 2002 and numerous parts makers have also shut down.

 

The city's unemployment rate is 8.2 per cent, one of the highest levels for a major urban area in the country.

 

In the past two years at Ford's operations, almost 1,200 workers have taken early retirement incentives and more than 800 left the company after accepting buyouts. Another 940 workers are on layoff and can receive benefits representing up to 60 per cent of gross pay, depending on years of service.

 

Ford opened the plant in 1981 and Nemak became a partner in 2000. Ford's share is now less than 10 per cent.

Edited February 7, 2008 by oac bodyboy