It could be a grim summer for a number of local residents with the announcement by A.O. Smith Corporation (formerly GSW) that it plans to end manufacturing operations in Fergus.
On April 3, A.O. Smith announced its plan to consolidate residential and light commercial water heater manufacturing into other North American plants.
Relocation of the manufacturing operations will begin over the next several weeks, and the company expects to end the majority of production by the end of June.
The move impacts 350 employees in manufacturing and related support functions.
The Fergus facility will remain the central office of A.O. Smith’s Canadian business with a total of approximately 125 employees.
The facility will continue to house the sales, marketing, finance, customer service, information technology and product engineering functions.
The company’s regional water heater distribution center also will remain in Fergus. The A.O. Smith plant in Stratford that manufactures pump tanks for water systems is not affected by this action.
In a press release issued by the company, Kevin J. Wheeler, president and general manager of North American water heating, said the move “is the result of a comprehensive study evaluating the competitiveness of our North American operations.
“The water heater industry is extremely competitive and has been burdened with overcapacity for a number of years,” Wheeler noted.
“In addition, we have been facing a challenging economic environment as a Canadian manufacturer.
Wheeler continued, “This was a tremendously difficult decision to make, given the long history of the Fergus operation and its experienced workforce.
“However, after careful consideration of all of the alternatives, we decided it was necessary to cease manufacturing in Fergus.
“We understand that this will create a great deal of uncertainty with our Fergus employees, and we are committed to helping them during this difficult transition.”
The company said it will meet with affected employees this week to discuss details regarding the relocation schedule. Affected employees will be offered severance benefits as well as job placement assistance.
The 500,000 square foot Fergus facility manufactures residential and light commercial water heaters for the Canadian and U. S. markets. A. O. Smith will continue to market water heaters under the A. O. Smith, GSW and John Wood brands in Canada.
A.O. Smith, with headquarters in Milwaukee, is North America’s leading manufacturer of residential and commercial water heaters and boilers.
The company employs 10,900 people at facilities in the United States, Canada, Mexico, China, the Netherlands and India.
The announcement came the day following the company announcement of an upcoming first quarter conference call on April 23.
The layoff News came as a surprise to the local United Steelworkers union which represents about 330 workers in the plant and 26 office staff.
Ted Arnott
News that A.O. Smith will be discontinuing manufacturing in Fergus is a devastating blow to the community, says Wellington-Halton Hills MPP Ted Arnott.
“We were all shocked and disappointed, and our hearts go out to the families who will be impacted,” Arnott said.
Upon hearing of the planned closure affecting up to 350 workers, Arnott reached out to Centre Wellington officials, the company and union representatives, the premier’s office, the offices of the ministers of Economic Development and Training, and others.
He also joined Mayor Joanne Ross-Zuj for a visit at the plant the day after the announcement.
“I have spoken to both Tim Hudak and Kathleen Wynne, to ensure they are aware of the situation, and of our need for the support of the provincial government,” Arnott said.
He later received word that the Ministry of Training, Colleges and Universities will establish an action centre in the community to assist the displaced workers.
“I want to do whatever I can to help. We will work together to support our neighbours in every way possible,” Arnott said.
Michael Chong
Michael Chong, Member of Parliament for Wellington–Halton Hills, was also saddened to learn the News.
“It’s unfortunate that so many people will be affected by the company’s announcement,” said Chong.
“My thoughts are with the employees and their families during this difficult time.”
Upon learning of the job losses, Chong contacted A.O. Smith to offer federal government assistance.
In 2010, Chong, announced that the federal government invested $39,000 in the A.O. Smith plant in Fergus.
At the time, Chong said, “This investment in advance skills training will help A.O. Smith compete in global markets and ensure that good manufacturing jobs stay in Ontario. This money comes from Canada’s Economic Action Plan, our plan to create jobs and steer the Canadian economy through the global recession.”
Through the Achieving Innovation and Manufacturing Excellence (AIME) initiative, the federal government helped A.O. Smith by providing it with funding to provide advanced skills training for its employees.
Despite these efforts, and despite the federal government’s continued focus on job creation and economic growth, Canada is not immune to the continued economic uncertainty south of the border.
In light of the company’s announcement, Chong has made arrangements with the local Service Canada office.
He requested that they coordinate with affected A.O. Smith employees in order to ensure that Employment Insurance (EI) benefits and other employment services are available and accessible for those affected by the company’s announcement.
Any employees affected by the A.O. Smith announcement who wish to access federal government services such as Employment Insurance can also contact Chong’s office at 866- 878-5556.
