Oakville and Windsor win, St. Thomas loses.

November 02, 2009

It's official, the St. Thomas assembly plant will close in September 2011 cutting 1,600 workers, as Ford of Canada and the Canadian Auto Workers union yesterday announced a tentative deal on a new contract that will close St. Thomas in exchange for a $2 billion investment in the automaker's Oakville assembly plant and Windsor engine plants, securing work there.

"Ford has no plans for the St. Thomas facility. We knew for years it was at risk and the clock had run out unless it won major new investment," said Ken Lewenza, president of the CAW, yesterday. "This is devastating for Canada. We did what we could to take care of members there."

The severance package for St. Thomas workers is valued at about $400 million. It will include lump sum payments, ranging up to $100,000 for more senior, retirement eligible workers, health-care benefits for life for retirees and for an extended period of time for laid off workers, as well as a vehicle voucher.

Also, in the spring of 2011 Ford will offer retirement packages to workers in Oakville and Windsor, meaning some St. Thomas workers could bump into jobs there.
The union had to agree to the closure as Ford threatened to pull investment and production out of Canada unless it got the concessionary deal, said Lewenza.
"The talks were very difficult. Ford was very aggressive. They talk about disinvesting in Canada unless we extend the pattern to them, they had other options and that was not acceptable to our union," said Lewenza.

The automaker gets the same concessions the union gave GM and Chrysler, meaning it takes about $20 an hour off the cost of CAW workers. It will see workers lose two weeks time off the job, freeze salaries and cost of living allowances, and workers will pay more for their own pension and benefits.
The Free Press first reported on Sept. 23 that Ford told Lewenza in bargaining that it will shut St. Thomas down.

"If we did not do what we did today, Ford would have put in place a plan to exit Canada. It was a real threat," said Mike Vince, president of Ford Local 200 in Windsor.

Ratification votes on the deal will be held today and tomorrow.

The agreement will see Ford maintain 10% of its North American vehicle production in Canada, by adding two vehicle to the Oakville assembly plant, as well as a new engine production for its Windsor operations.

Now, it is believed Ford assembles about 13% of its North American-made products in Canada.

This is a smaller amount than either GM, which manufactures just less than 20%, and Chrysler that makes more than 20% here.
The deal will "help Ford improve its competitiveness in Canada," said a release from the automaker.

Now, the St. Thomas plant assembles the large, rear wheel drive Crown Victoria, Mercury Grand Marquis and Lincoln Town Car vehicles and makes about 100,000 of those a year. Ford will stop production of those vehicles.

Ford maintained those vehicles were not in its future plans and it had too much capacity at other plants to keep St. Thomas open, or to invest in retooling the 42-year-old plant, said Lewenza.

"This will be a huge loss," said Joe Preston, Conservative MP for Elgin-Middlesex-London. "There will be hardship in a lot of houses, and stores and restaurants are all affected. It is not a great year and it will not get better after this."

The federal government sent a message to Ford that it was willing to listen to any proposals put forward to save the plant, and heard none, said Preston.
"We did what we could to make it work. It is frustrating, Ford was not willing to come to the table. It was a foregone conclusion," said Preston. The plant pays Elgin County about $3 million a year in property taxes -- and that total will drop when it becomes a vacant property.
Although the shutdown will be a loss for the entire region, it is hardly a shock as speculation has been ongoing for years it will close, said Cliff Barwick, St. Thomas mayor.

"It is not good news, but it is not a surprise. This first cropped up several years ago," said Barwick.
The city is still reeling from the closing of the Sterling Truck plant in the spring and the loss of 2,000 jobs there, and there has been a long line of closed smaller manufacturing plants as well.
Lear Seating, which employs about 100 and supplies the St. Thomas plant with seats for its cars, will certainly join the ranks of the closures, he added.
In fact, it may take the region 10 to 15 years to recover from the string of manufacturing plant closings, said Barwick.

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ST. THOMAS LEGACY

The plant builds the Crown Victoria, Grand Marquis and Lincoln Town Car.
Previous models built there: Ford Falcon (1967-70); Ford Maverick; Ford Pinto; Ford Fairmont; Mercury Zephyr; Ford Escort; Ford EXP; Mercury LN7; Ford LTD Crown Victoria (1983-91); Mercury Marauder (2003-04)

Opened: 1967
Workforce: 1,600
Size: 242,000 square metres on 257 hectares of land
norman.debono@sunmedia.ca