Canada Ford plant to shutdown in 2011, layoff 1,400 jobs

US automaker Ford Motor Co. will shutter one of its manufacturing plants in Canada in 2011, a move that will cut 1,400 jobs, the Canadian Auto Workers said Friday.

As part of a cost-reduction agreement between the company's US headquarters and the CAW, the plant in St. Thomas, Ontario, will close in the third quarter of 2011, the powerful union said in a statement.

Some 1,400 employees will be dismissed, CAW spokeswoman Shannon Devine told AFP. Canadian media put the number of jobs eliminated at 1,600.

As part of the tentative agreement the union said it obtained a commitment by the US automaker to keep at least 10 percent of its North American production in Canada.

"During the negotiations, Ford threatened that if we didn't come to an agreement, the company would begin shifting investment out of Canada," said Ken Lewenza, president of the CAW.

"In today's globalized economy where companies attempt to bypass community commitments, it's crucial that we don't allow this to happen."

The agreement, which expires in September 2012, is expected to be voted on and approved Sunday by the CAW's 7,000 Ford workers in Canada.

The St. Thomas plant produces the Ford Crown Victoria -- a model routinely chosen by US police forces and New York taxis -- as well as the Mercury Grand Marquis.

Although Ford did not accept bailout money from the US government like Chrysler and General Motors did, the CAW said Ford followed the pattern set out earlier in the year by its US rivals to cut significant portions of their Canada operations as part of restructuring.

Chrysler and GM both filed for bankruptcy and received billions of dollars in US government aid. Canada's government also pumped billions of dollars into the companies as part of packages to keep their auto manufacturing operations here afloat.

As part of the new deal, the CAW agreed to a reduction in holidays and a requirement for workers to contribute to the company's pension fund at the rate of one dollar for every hour worked, Devine said.

Ford for its part made new production and investment commitments in several manufacturing locations in Canada, including production of "at least two new-generation vehicles in the next product cycle" at its Oakville plant outside Toronto.

"This footprint commitment was an important achievement for the union," Lewenza said.

But Ford stood firm on closure of the St. Thomas plant.

"Nothing was harder... than coming to the realization that regardless of whatever suggestions the union came up with to save the St. Thomas facility, Ford would be closing the plant," said Mike Vince, chairman of the CAW-Ford bargaining committee and president of CAW Local 200.

Ford committed to funding and opening a center to assist workers unemployed after the plant closure.

Agencies

Has Siemens IT arm sacked over 500 as Union claims?

IT firm Siemens Information Systems, a unit of German conglomerate Siemens, today said it has laid off 128 employees as part of its cost cutting measures, debunking union's claim that 500 employees had lost jobs.

The IT-ITeS union UNITES India said the number of employees laid off by the company could be around 500. It added that Siemens is laying off its employees in Bangalore violating the Industrial Dispute Act.

When contacted SISL spokesperson said, "As a part of our cost-cutting initiatives, we have released only 128 employees from one of the business units."

UNITES Professionals India General Secretary Karthik Shekhar said, "The figures provided by the company does not include the number of employees who were on contract. In the last one month, the company has laid off more than 128 employees."

SISL has over 5,500 employees in the country. The union has also written to the headquarters of the firm in Germany.

About compensating the employees, the company said it has already compensated the affected employees higher than the contractual terms.
AGENCIES

Agencies