350 Out of Work As Former GSW Plant to Cease Manufacturing in Fergus

FERGUS - Approximately 350 employees of a Fergus water heater maker will be out of work as the company winds down manufacturing there.

A.O. Smith Corp., owner of the former

GSW plant

, announced Wednesday afternoon it will consolidate manufacturing into several other North American plants. The relocation will begin over the next several weeks with most production in Fergus ending by July 1.

"(It's) devastating. Just devastating," Centre Wellington Mayor Joanne Ross-Zuj said of the news.

"It's a huge hit for us and certainly a bad day," Ross-Zuj said. "It's never a good day to be told news like this."

"It's just heart-wrenching," she continued, noting she knows many of the employees, who come from families that have worked for generation at the plant, an employment anchor for many years.


500,000-square-foot facility

is one of the town's largest employers, with local operations dating back to the 19th century.

The focus now, she said, is ensuring those leaving get the career counselling they need to move on with their lives. Ross-Zuj said there appears no opportunity for local employees being laid off to relocate.

Wellington County warden Chris White took comfort that some jobs will remain. The Fergus complex is retaining the central office of A.O. Smith's Canadian business with about 125 employees remaining in the sales, marketing, finance, customer service, information technology and product engineering departments. The company's regional water heater distribution centre will also remain in Fergus.

But he was thinking Wednesday about those leaving and what that means for Centre Wellington.

"It's always unfortunate when that many people lose their jobs," White said. "That's devastating to a community." The area will have to redouble job creation efforts, he stressed.

The layoff news was a bolt out of the blue for the United Steelworkers union that represents about 330 workers in the plant and 26 office staff.

"There wasn't an indication this was going to happen," area co-ordinator Tom Walsh said, noting his union was gearing up for a new round of negotiations with the current three-year contract set to expire in November.

"We were moving ahead, preparing for negotiations," he said.

"We had a damn good workforce at Fergus."

Walsh said the company claims overcapacity in the marketplace, but manufacturing in general has been shifting operations for years to locations where labour and benefits costs are cheaper, such as the Southern U.S.

The Fergus plant has become more machine-intensive, leading to the layoff of about three dozen people in recent years, he added.

He was planning to meet with management Thursday to discuss closure issues and ensure workers could update their job-seeking skills, Walsh said.

Kevin J. Wheeler, president and general manager of North American water heating, said in a news release the move is the result of "a comprehensive study evaluating the competitiveness of our North American operations. Local plant manager Dave Hammond was speaking with employees Wednesday afternoon and unavailable for comment.

"The water heater business is extremely competitive and has been burdened with overcapacity for a number of years," Wheeler said. "In addition we have been facing a challenging economic environment as a Canadian manufacturer."

Wheeler said the decision was "tremendously difficult" given the long history of the Fergus plant.

"We understand this will create a great deal of uncertainty with our Fergus employees, and we are committed to helping them during this difficult transition," he added.

This will include meeting with affected employees this week to discuss details regarding the relocation schedule. Employees will be offered severance benefits and job placement assistance, the company's news release states.

A.O. Smith, headquartered in Milwaukee, Wis., employs 10,900 people in the United States, Canada, Mexico, China, the Netherlands and India.

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