Nemak announces Windsor plant closure by 'mid-2020'

Automotive parts manufacturer Nemak announced plans Tuesday to close its Windsor, Ont. plant by mid-2020.

According to Nemak, the decision to close the plant was a result of the "early phase-out of an export program with a customer in China."

Approximately 90 per cent of the engine blocks produced in Nemak's Windsor plant are destined for Cadillac vehicles at GM's Shanghai plant.

The phase-out is expected to reduce Nemak's use of the plant to less than 10 per cent of capacity.

The company said the plant represents approximately one per cent of the company's consolidated revenues. Roughly 270 people are currently employed at the facility.

"Given our outlook on capacity utilization and volumes in Windsor, we have made the decision to end production at this facility," said Armando Tamez, CEO of Nemak, in a July 16 media release.

"We are deeply grateful to the many people who have contributed to our business in Windsor over the years and we will make every effort to support them during this period."

Along with the Province of Ontario, Nemak invested approximately $15 million in its Windsor plant in 2015, creating 80 jobs in Windsor at the time.

The federal government provided the plant with $3 million in funding in 2017, with the intention of creating up to 70 new jobs.

'Sales have dropped dramatically'

Unifor Local 200 president John D'Agnolo met with Nemak leadership Tuesday. He was told the plant's closure is a result of reduced supply needs for GM's Shanghai facility.

"They told me that sales have dropped dramatically," said D'Agnolo, who added that Nemak was hit with layoffs in November 2018.

Some employees were re-hired in February 2019, but the company handed out more layoffs soon after.

"It's been up-and-down ever since," said D'Agnolo.

According to Agnolo, Nemak's fortunes changed when the Chinese economy began to show signs of a slowdown.

"They were hoping that the economy would turn around, but as of right now, the Chinese economy has not turned around and sales have dropped dramatically."

Nemak told D'Agnolo the Windsor plant's production currently sits at approximately 25 per cent, and that production will likely drop to less than 10 per cent by next year.

D'Agnolo said he told leadership the union wants the plant to stay open, though he wouldn't comment on the likelihood that Unifor would succeed in convincing Nemak to continue production.

"You never know when it comes to bargaining, when we all have to sit down with them and we'll have a lot of discussions," said D'Angolo.

D'Angolo added he didn't have any conversations about severance packages.

For their part, the Ontario PC government said they're committed to the province's manufacturing industry.

"It is a diverse industry that provides innovative and high-quality engineering and manufacturing jobs," said a spokesperson for the Ministry of Economic Development, Job Creation and Trade, in an email. "We will continue to monitor the company's plans and the potential impacts on Ontario's manufacturing sector."

The ministry spokesperson added that the the province is committed to helping affected workers in the region "by connecting them with relevant Employment Ontario programs and services."

'We really didn't expect it'

Cameron Doig, 36, has worked at the Nemak plant in Windsor since May 2015. He currently works as an equipment and furnace operator. He said employees were generally surprised to learn Nemak's plans for the facility.

According to Doig, employees accepted a wage freeze a few years ago "for the promise of three new products." Work was completed on one of those products, but the remaining two were said to be on the way.

"To find out that everything is getting axed was pretty surprising," said Doig, adding that some employees were expecting the news.

"The base plant is where we make the blocks for China and that's done, we all knew that was done," said Doig. "But we thought that we were going to be keeping these more precise blocks that are for the American market."

Doig added a separate round of layoffs cut the plant's workforce a few weeks ago.

"This is our first week back with what was supposed to be the reduced workforce that was supposed to continue working for the next few years or so longer," said Doig.

Doig said employees received few details on Tuesday, but a question-and-answer is planned for Friday.

Toni Koren has been working in the plant since 2011. She said knowing she'll be out of a job in the middle of next year will be tough since she's a single mom trying to pay off her mortgage.

"With Chrysler employees losing their jobs, there's going to be a lot of competition out there. [I'm] just trying to make ends meet and figure out what's going to happen from here," said Koren. "We just didn't think it would happen this quick."

As for current morale in the plant, Koren said it's almost non-existent.

"It's sad. No one really wants to be here anymore."

MP calls closure disappointing, devastating

CBC News reached out to the office of Innovation Minister Navdeep Bains. Press secretary Dani Keenan said the federal governments will be ready to ensure that workers receive the support and benefits for which they are entitled.

"While this is a business decision taken by the company, we know that this will be a difficult time for the employees and their families," said Keenan on behalf of the minister.

Windsor West MP Brian Masse called the closure "disappointing" and "devastating." He said Canada does not have an auto policy in place, allowing companies like Nemak to "change direction without any outreach to the local community."

"There's been generous contributions by taxpayers to the Nemak operations over decades," said Masse. "So you would hope that there would be a plan in place to be more in touch with the community — but apparently, that's not the case."

Masse added that "guarantees" should have been put in place by the federal government before it gave $3 million to Nemak — conditions to discourage Nemak from pulling the plug on Windsor.

"Most of the incentive plans I've seen have ongoing relationships. They're not just handing a cheque and walking away and hoping for the best later on."