I agree Enlim but perhaps a bit of both would work. It was the union, in part, that drove Martinrea out of business.
Feb 12, 2008 04:30 AM
Martinrea International Inc. says it plans to close a major auto-parts operation in Kitchener and eliminate 1,200 jobs because a high dollar and shifting market demands are making the company uncompetitive.
The Vaughan-based company, however, suggests its ability to secure new contracts and keep the operation running would improve if workers agreed to cut labour costs.
Chief executive officer Fred Jaekel said yesterday the struggling Kitchener Frame plant will gradually wind down, closing by the spring of 2010, because the company has no new contract to replace one with General Motors Corp.
"We're going to shut it down," Jaekel said in interview. "We have nothing at the end of this contract with GM."
Jaekel said it will be impossible for the plant to attract any new business because the wages and benefits of workers are uncompetitive. They currently earn about $45 an hour in wages and benefits.
"We can't get new work at those rates," Jaekel said. "We have given them (workers) something to think about."
The plant currently employs about 800 workers who primarily produce frames for the GM TrailBlazer and Envoy sport utility vehicles.
Another 400 workers are on layoff because of slow demand.
Jaekel said the soaring value of the Canadian dollar is also making it extremely difficult to compete for new contracts.
Last week, Martinrea advised the Canadian Auto Workers it will soon give the union notice that the plant could close in a year.
However, the two sides will probably negotiate an extension of their current collective agreement beyond the expiry date of April 2009, to the spring of 2010, when the contract with GM for frames and engine cradles will end. Martinrea would then lay off workers and reduce output as demand waned.