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Napanee Team Member

Jan 4, 07 - 9:57 PM

Valleyfield Quebec

Quebec economy hit as Goodyear cuts 1,000 jobs at Valleyfield tire factory
MONTREAL (CP) - Quebec's battered manufacturing sector suffered another blow Thursday after Goodyear Tire & Rubber Co. announced it will stop producing tires at its factory in Valleyfield, Que., affecting nearly 1,000 employees and adding to economic troubles in a province already suffering from forestry industry layoffs.
Softening the blow slightly, the Akron, Ohio-based company also said Thursday it will create 200 jobs by opening a materials mixing centre at the location near Montreal in June.
The two unions representing office and shop-floor workers said the timing of the decision came as a surprise.
"We didn't see it coming," said Marie-Andree L'Heureux, national representative for the Communications, Energy and Paperworkers Union, which represents the bulk of employees.
"Labour relations had been good. They (Goodyear) made many technological improvements and investments in recent years.
"Employees are in a state of shock."
Worker finishing the overnight shift were told to stop working and directed to a meeting, where the company announced its decision. Production is expected to cease by the end of June with the launch of the mixing centre.
"It's not clear that we'll be able to find other work because we made good money," said Jean Cloutier, who has lived through several threatened closures over 20 years.
The United Steelworkers of America, which represents about 60 office workers, said a community committee has been trying for two years to find alternatives for the plant.
"We knew that the tires we made no longer fit into the demand of the American market," Bruno Lefebvre said in a statement.
Several million dollars were put on the table last fall when Quebec government officials met the company, he said.
"There was an offer from the Quebec government in September 2006," confirmed Damir Croteau, spokesman for the Economic Development minister, refusing to provide details.
"The offer was focused on the modernization of the plant, but Goodyear chose a different path."
The rejection comes as Premier Jean Charest opens the provincial purse in an attempt to secure jobs ahead of an expected provincial election.
The Liberal government has earmarked nearly $825 million to help the battered forestry sector, including $400 million in new money.
It also provided hydroelectric and water rights to entice aluminum giant Alcan Inc. (TSX:AL) to invest US$1.8 billion to expand its smelter operations in Quebec's Saguenay-Lac-St-Jean area.
Goodyear's decision serves as a further letdown to Valleyfield, which recently saw T-shirt maker Gildan Activewear (TSX:GIL) close its textile factory in the city as part a massive restructuring that affected 546 jobs in Canada and the U.S.
But Mayor Denis Lapointe said the region should rebound thanks to the arrival of new factories and the planned extension of a major highway.
"I don't share the pessimism of some who say the departure of Goodyear is the end," he said in an interview.
The reduction in both capacity and labour in Valleyfield is related to the company's global strategy to reduce excess high-cost manufacturing capacity, Goodyear said in a release.
The tire maker, which settled new contracts with Canadian and U.S. workers just last week, has already announced closures of tire plants in Britain, New Zealand and Texas. A restructuring of Goodyear operations was announced in September, although no plants were identified at the time.
"In today's intensely competitive and increasingly global business environment, we face some very difficult choices," said Jon Rich, president of Goodyear's North American Tire business.
"The decision to discontinue tire production at Valleyfield is one of those necessary steps to make Goodyear more competitive."
The elimination of tire production in Valleyfield will reduce manufacturing capacity by an additional seven million units. The company plans to cut production by 21 million units, compared with original targets of 15 to 20 million units by 2008.
More plant closures are expected, although Canada isn't likely on the immediate radar, said a New York-based analyst.
"I think there's a lot of other places they can go first," said Kevin Tynan of Argus Research Corp.
In addition to reducing overall capacity, the Valleyfield plant was targeted because Goodyear wants to get out of the low-margin, private-label product manufactured at the facility, he said.
In the forestry industry, there have been more than 10,000 layoffs in Ontario and Quebec and almost 2,000 in Atlantic Canada since January 2003.
Goodyear is just the latest automotive parts company to struggle with high-cost facilities, especially in the United States. Auto parts giant Delphi Corp. threatened huge wage cuts and plant shutdowns as it sought ways out of bankruptcy.
Goodyear has been squeezed by Asian competitors such as Yokohama and Toyo, whose low costs have put intense pressure on the U.S. firm's margins, Tynan said.
"At a time when there wasn't as much competition, you could protect your pricing and cost and your margins a little bit better and that model is really breaking down quickly."
The Valleyfield closure will result in total charges estimated to be between US$115 million and US$120 million for restructuring and accelerated depreciation.
Between $70 million and $75 million of the charges will be applied in the fourth quarter of 2006, with the balance of the charges affecting 2007. When complete, the closure is expected to generate annual cost savings of about $40 million.
Goodyear is one of the world's largest tire companies and also makes engineered rubber products and chemicals in more than 100 facilities in 29 countries around the world, employing about 80,000 people.
-
Plant cuts announced over the last year by Goodyear Tire & Rubber Co.:
VALLEYFIELD, Que.- - announced plans Thursday stop tire production and cut workforce to 200 from 1,000.
TYLER, Tex. - announced plans Dec. 29 to close the 1,100-employee plant.
UPPER HUTT, N.Z. - announced plans in June to close the 400-employee plant.
WASHINGTON, Britain, and DEBICA, Poland - announced plans in April to close the British plant and reduce production in Debica, cutting 1,500 jobs.

so What

Jan 5th, 2007 - 4:56 AM

Re: Valleyfield Quebec

Valleyfield is not part of the master contract. Only 11 or so office personel are USW....................

kaos

Jan 5th, 2007 - 5:46 AM

Re: Valleyfield Quebec

So? It's a sign of things to come.

screwed over

Jan 5th, 2007 - 11:39 AM

Re: Valleyfield Quebec

Thats just terrible!!!!!!

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Napanee Team Member Jan 4, 07 - 9:57 PM	Valleyfield Quebec Quebec economy hit as Goodyear cuts 1,000 jobs at Valleyfield tire factory MONTREAL (CP) - Quebec's battered manufacturing sector suffered another blow Thursday after Goodyear Tire & Rubber Co. announced it will stop producing tires at its factory in Valleyfield, Que., affecting nearly 1,000 employees and adding to economic troubles in a province already suffering from forestry industry layoffs. Softening the blow slightly, the Akron, Ohio-based company also said Thursday it will create 200 jobs by opening a materials mixing centre at the location near Montreal in June. The two unions representing office and shop-floor workers said the timing of the decision came as a surprise. "We didn't see it coming," said Marie-Andree L'Heureux, national representative for the Communications, Energy and Paperworkers Union, which represents the bulk of employees. "Labour relations had been good. They (Goodyear) made many technological improvements and investments in recent years. "Employees are in a state of shock." Worker finishing the overnight shift were told to stop working and directed to a meeting, where the company announced its decision. Production is expected to cease by the end of June with the launch of the mixing centre. "It's not clear that we'll be able to find other work because we made good money," said Jean Cloutier, who has lived through several threatened closures over 20 years. The United Steelworkers of America, which represents about 60 office workers, said a community committee has been trying for two years to find alternatives for the plant. "We knew that the tires we made no longer fit into the demand of the American market," Bruno Lefebvre said in a statement. Several million dollars were put on the table last fall when Quebec government officials met the company, he said. "There was an offer from the Quebec government in September 2006," confirmed Damir Croteau, spokesman for the Economic Development minister, refusing to provide details. "The offer was focused on the modernization of the plant, but Goodyear chose a different path." The rejection comes as Premier Jean Charest opens the provincial purse in an attempt to secure jobs ahead of an expected provincial election. The Liberal government has earmarked nearly $825 million to help the battered forestry sector, including $400 million in new money. It also provided hydroelectric and water rights to entice aluminum giant Alcan Inc. (TSX:AL) to invest US$1.8 billion to expand its smelter operations in Quebec's Saguenay-Lac-St-Jean area. Goodyear's decision serves as a further letdown to Valleyfield, which recently saw T-shirt maker Gildan Activewear (TSX:GIL) close its textile factory in the city as part a massive restructuring that affected 546 jobs in Canada and the U.S. But Mayor Denis Lapointe said the region should rebound thanks to the arrival of new factories and the planned extension of a major highway. "I don't share the pessimism of some who say the departure of Goodyear is the end," he said in an interview. The reduction in both capacity and labour in Valleyfield is related to the company's global strategy to reduce excess high-cost manufacturing capacity, Goodyear said in a release. The tire maker, which settled new contracts with Canadian and U.S. workers just last week, has already announced closures of tire plants in Britain, New Zealand and Texas. A restructuring of Goodyear operations was announced in September, although no plants were identified at the time. "In today's intensely competitive and increasingly global business environment, we face some very difficult choices," said Jon Rich, president of Goodyear's North American Tire business. "The decision to discontinue tire production at Valleyfield is one of those necessary steps to make Goodyear more competitive." The elimination of tire production in Valleyfield will reduce manufacturing capacity by an additional seven million units. The company plans to cut production by 21 million units, compared with original targets of 15 to 20 million units by 2008. More plant closures are expected, although Canada isn't likely on the immediate radar, said a New York-based analyst. "I think there's a lot of other places they can go first," said Kevin Tynan of Argus Research Corp. In addition to reducing overall capacity, the Valleyfield plant was targeted because Goodyear wants to get out of the low-margin, private-label product manufactured at the facility, he said. In the forestry industry, there have been more than 10,000 layoffs in Ontario and Quebec and almost 2,000 in Atlantic Canada since January 2003. Goodyear is just the latest automotive parts company to struggle with high-cost facilities, especially in the United States. Auto parts giant Delphi Corp. threatened huge wage cuts and plant shutdowns as it sought ways out of bankruptcy. Goodyear has been squeezed by Asian competitors such as Yokohama and Toyo, whose low costs have put intense pressure on the U.S. firm's margins, Tynan said. "At a time when there wasn't as much competition, you could protect your pricing and cost and your margins a little bit better and that model is really breaking down quickly." The Valleyfield closure will result in total charges estimated to be between US$115 million and US$120 million for restructuring and accelerated depreciation. Between $70 million and $75 million of the charges will be applied in the fourth quarter of 2006, with the balance of the charges affecting 2007. When complete, the closure is expected to generate annual cost savings of about $40 million. Goodyear is one of the world's largest tire companies and also makes engineered rubber products and chemicals in more than 100 facilities in 29 countries around the world, employing about 80,000 people. - Plant cuts announced over the last year by Goodyear Tire & Rubber Co.: VALLEYFIELD, Que.- - announced plans Thursday stop tire production and cut workforce to 200 from 1,000. TYLER, Tex. - announced plans Dec. 29 to close the 1,100-employee plant. UPPER HUTT, N.Z. - announced plans in June to close the 400-employee plant. WASHINGTON, Britain, and DEBICA, Poland - announced plans in April to close the British plant and reduce production in Debica, cutting 1,500 jobs.
so What Jan 5th, 2007 - 4:56 AM	Re: Valleyfield Quebec Valleyfield is not part of the master contract. Only 11 or so office personel are USW....................
kaos Jan 5th, 2007 - 5:46 AM	Re: Valleyfield Quebec So? It's a sign of things to come.
screwed over Jan 5th, 2007 - 11:39 AM	Re: Valleyfield Quebec Thats just terrible!!!!!!