Deere to close plant in Canada / QCTimes.com
Deere to close plant in Canada
By Jennifer DeWitt | Wednesday, September 3, 2008 12:20 AM CDT
In a strategy aimed at consolidating equipment manufacturing capacity, Deere & Co. announced Tuesday that it will close its plant in Welland, Ontario, Canada, and transfer production to its operations in Wisconsin and Mexico.
The nearly century-old John Deere Welland Works is slated to close by the end of 2009. The closing impacts 800 employees, most of whom are production workers.
The Welland plant manufactures John Deere utility vehicles and attachments for its commercial and consumer equipment and agricultural equipment businesses. Production of the Gator utility vehicles will move to Deere’s operations in Horicon, Wis., where other Gator models and riding lawn equipment already are manufactured. Welland’s production of cutting and loading attachments will be transferred to Monterrey and Saltillo, Mexico.
Company spokesman Ken Golden said the employees were notified Tuesday of the decision. “They will have all of our support,” he said, adding that Deere will provide career counseling, one-on-one meetings as well as severance packages. “It is not easy to take this type of action.”
The company also has advised the Canadian Auto Workers, which represents the wage employees, of the decision. Per its contract, the union may request to have further discussions about the transition. “No one will leave before the end of February (2009),” he said.
“Manufacturing in Canada has been financially challenging because of the exchange rate,” Golden added.
A small number of salaried jobs — in the engineering and management ranks — may be transferred to Deere’s facility in Grimsby, Canada, Golden said. In addition, a large percentage of the salaried workers are of retirement age.
Deere opened the factory on April 7, 1910, according to the plant’s Web site. The next year, it purchased Dain Manufacturing Co. Limited, also in Welland.
Golden said the decision is part of Deere’s strategy to consolidate its manufacturing capacity in certain product lines.
News of the closing comes less than one week after Deere announced plans to invest nearly $180 million to expand its manufacturing capacity in Waterloo, Iowa, and Horizontina, Brazil. It is Deere’s first plant closing since it closed a forestry equipment plant in Woodstock, Ontario, Canada, in early 2006.
The company said the action will result in after-tax charges of approximately $90 million, about half of which will be recorded in the fourth quarter of 2008.
Jennifer DeWitt can be contacted at (563) 383-2318 or
jdewitt@qctimes.com.