KITCHENER, Ontario-Michelin North America Inc.´s decision to close its Kitchener tire plant appears to be final.
The shutdown-planned for late July-will take place as scheduled, a Michelin spokeswoman confirmed Feb. 24. The tire maker announced Feb. 2 it will shut down the BFGoodrich facility because of overcapacity in its North American mass market passenger tire segment.
The United Steelworkers union, which represents the 1,000-member hourly work force in Kitchener, said after the announcement it would fight to keep the tire manufacturing operation open. Wayne Fraser, director of the USW´s Ontario/Atlantic district, ripped the company for dropping "a bomb"´ on the city of Kitchener and said the union would sit down with Michelin as soon as possible to explore options to save tire production at the plant.
But talks between the company and the USW failed to alter the plant´s fate.
Now, the two sides are discussing closure language, said Terry Habermehl, financial secretary at USW Local 677 in Kitchener. "The (USW) International (representatives) came in the week after the announcement, and they had daily meetings, but nothing changed," Habermehl said.
Greenville, S.C.-based Michelin said its U.S. customers will be supplied by its BFG plants in Tuscaloosa and Opelika, Ala., and Fort Wayne, Ind. About 3,400 hourly workers at those sites also are represented by the USW.
Both the Kitchener contract and a master agreement covering the three U.S. sites contain non-closure security. But those pacts expire July 22, the designated shutdown date.
Local 677 members went on strike for nearly three months starting in June 2004 when their previous three-year contract with the company lapsed. The spokeswoman said the decision was not related to the union situation in Kitchener-where the plant employs 1,100 salaried and hourly people-but was based on a variety of logistical, market and financial factors, including the overcapacity problem.
While she didn´t detail those factors, she did say there are three significant reasons why Kitchener was the "right plant to close" among the BFG sites.
First, Kitchener clearly has the lowest overall tonnage capacity, and consolidation at the other plants will allow the company to make its products-including BFGoodrich, Uniroyal and private and associate brand passenger tires-in the most efficient manner, she said.
Second, consolidation at the three U.S. plants will require no further investments to meet demand, unlike what the Kitchener site would need.
The firm committed to $150 million in capital expenditures at the four BFG plants in the contract agreement, and those have been made, the official said.
Finally, about 70 percent of Kitchener´s production comes to the U.S., and it made geographical sense to consolidate it in U.S. plants, she said.
"It was a thoughtful, thorough decision," she said. "It wasn´t easy. But there´s nothing I can imagine will change it at this point."
Michelin said it will work with government agencies, the community and the union to help make the transition for the affected employees as smooth as possible, including providing separation pay and benefits. The company also is establishing a program to assist in the creation of new jobs from industries in the Kitchener area.
The company will announce details regarding the new program within the next several weeks, the spokeswoman said.
The shutdown won´t affect Michelin´s other Canadian facilities, all located in Nova Scotia, the firm said.