Deere to close Ontario plant
Farm machinery maker Deere & Co. said Tuesday it will close a plant in southern Ontario, chopping 800 jobs in the process.
The company said it will move the production of attachments and utility vehicles plants in Wisconsin and Mexico from its facility in Welland, Ont., in the Niagara region of the province.
The Deer factory in Welland, Ont., will be closed by the end of 2009, the company says.Deere, which makes the famous green-colored John Deere tractor, said the Welland plant will be shut by the end of next year.
"By consolidating manufacturing capacity the move supports ongoing company-wide efforts aimed at improved efficiency and profitability," the company said in a news release announcing the move.
The Welland closure will result in an after-tax charge in the range of $90 million US, one-half of which will be reflected in Deere's fourth quarter financial results.
Deere said it has informed the Canadian Auto Workers, which represents the plant's workers, and said it would discuss the closing with the CAW.
Three month stock chart for Deere & Co.The plant closing is another blow to Ontario's reeling manufacturing sector. A number of plants have shut in that province in the past year as goods makers deal with a rising Canadian dollar and slowing export markets in the United States.
For its part, Deere has been enjoying improved sales in its agricultural equipment division, which the firm expects to climb almost 30 per cent in the fourth quarter of the year.
However, Deere has been plagued by rising costs, a factor that resulted in the company missing analysts' profit projections in the latest quarter.
Deere now predicts it will make 98 cents a share US in its fiscal fourth quarter, well off of the $1.15 stock watchers had been expecting.
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