01/26/2012 05:55 EST | Updated 03/27/2012 05:12 EDT

Mabe Blames High Dollar For 700 Job Cuts


Home appliance-maker Mabe Canada is slashing nearly 700 jobs at its Montreal plant, blaming the high-flying loonie for its woes.

Citing the higher Canadian dollar and projected losses, Mabe said Thursday neither government subsidies nor union concessions could reverse the course.

The company said the plant is unsustainable, given that 90 per cent of the dryers produced at the east-end Montreal plant are exported to the U.S.

Mabe, which also has operations in the U.S. and Mexico, said it would reduce production at the plant gradually until the end of 2014.

The announcement took workers by surprise, said union spokesman Michel Ouimet, as labour relations "weren't bad" and new contract talks were underway with management.

"The problem is an economic problem, the Buy American Act. They've decided to repatriate their production to the [United] States."

Mabe produces a variety of appliances under well-known names such as GE and Hotpoint.

Workers agreed to $25 million in concessions when they signed their last contract in 2005, in exchange for a non-closure guarantee.

The company respected that commitment, Ouimet said, "but it's too bad, even after those last concessions. We were ready to talk."

Efficiency at the Montreal plant consistently reached 97 or 98 per cent and there was little room to increase output, he added.

Union representatives will meet with management next week to sort out details.

Of the plant's 625 unionized workers, 244 are eligible for retirement between now and 2014.

In a statement, the company expressed regret for its announcement and "the negative impact this decision will have on our devoted employees."

"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 Mabe facility occupies an entire block in east-end Montreal.