BUSINESS

Appliance-maker Mabe cuts 700 jobs in Montreal; company closes plant by 2014

01/26/2012 03:01 EST | Updated 03/27/2012 05:12 EDT
MONTREAL - Home appliance-maker Mabe Canada has announced it will slash 700 jobs in Montreal and is blaming the high-flying loonie for its woes.

The jobs will disappear over the next three years as the company closes a plant that manufactures dryers, by the end of 2014.

The company, which also has operations in the U.S. and Mexico, produces a variety of appliances under well-known names such as GE and Hotpoint.

Mabe blamed the higher Canadian dollar for the announcement Thursday. It said the plant had become unsustainable, given that 90 per cent of the dryers produced at the east-end Montreal plant were exported to the U.S.

The company expressed regret for its announcement and said it would ramp down production gradually.

"We understand the negative impact this decision will have on our devoted employees," the company said in a statement.

"We are trying to proceed with the plant closure in a way that will minimize to the greatest extent possible the negative impact on them."

The decision to proceed with the plant's closure was announced during a meeting with workers Thursday.

Employees left the building early in the afternoon, leaving empty the sprawling parking lot across from the plant. The facility occupies an entire block in east-end Montreal.

The few employees who did emerge later in the afternoon declined to comment.

The union expressed surprise at the news. A spokesman said union officials had just met the employer last week to begin a fresh round of contract negotiations.

"I think the employer didn't want to start negotiations with us for nothing," Michel Ouimet said.

Five years ago, Ouimet said, workers made concessions that amounted to $25 million in exchange for non-closure of the factory.

He said they were prepared to again look at concessions in an attempt to keep the plant open, but that would not have changed much because Mabe would continue to face losses.

Ouimet said figures shown by the company during the last round of negotiations five years ago, and again last week, showed that there were recurring losses of $15 million per year with little hope of making the plant profitable.

"When he addressed members on the floor (Thursday), the plant manager was clear that it was unthinkable to ask for more concessions," he said.

"(Workers) would have had to cut their salaries in half — without even considering other concessions — which is completely unacceptable and unthinkable."

Note to readers: This is a corrected story. An earlier version incorrectly suggested the company produces Samsung appliances, which is no longer true.