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

Will Aegis Buy Australia's UCMS Group?

Essar Group's back office arm Aegis Ltd has agreed to buy Australian business process outsourcing firm UCMS Group Ltd in a cash deal worth about A$54 million, the firms said in a statement on Friday.

Aegis, through affiliate firm Aegis BPO Services Australia Pty Ltd, will pay UCMS stockholders A$0.98 per share, a 133 percent premium over Thursday's closing price of A$0.42 per share, they added in the joint statement.

"Australia and New Zealand logically become a part of our growth strategy and offer an opportunity for Aegis to expand its footprint in this geography," said Aparup Sengupta, global chief executive officer and managing director of Aegis. The transaction is expected to close in in the third quarter and is subject to approvals from shareholders and the Supreme Court of Victoria and other customary closing conditions, they added.

With this acquisition, Aegis will have operations in India, Philippines, the United States, Costa Rica, Kenya and Australia. Last year, Aegis acquired outsourcing firm PeopleSupport Inc.

Agencies