A. O. Smith Corporation announced this afternoon it will discontinue manufacturing operations at its Fergus, Ontario, residential water heater facility.
The company plans to consolidate residential and light commercial water
heater manufacturing into other North American plants. The relocation of the
manufacturing operations will begin over the next several weeks, and the
company expects to end the majority of production July 1. The transfer will
affect approximately 350 employees in manufacturing and directly related
support functions.
Fergus will remain the central office of A. O. Smith's Canadian business
with a total of approximately 125 employees. The facility will house the
sales, marketing, finance, customer service, information technology, and
product engineering functions. The company's regional water heater
distribution center also will remain in Fergus. The A. O. Smith plant in
Stratford, Ontario, that manufactures pump tanks for water systems is not
affected by this action.
"Today's action is the result of a comprehensive study evaluating the
competitiveness of our North American operations," Kevin J. Wheeler,
president and general manager of North American water heating, said.
"The water heater industry is extremely competitive and has been burdened
with overcapacity for a number of years," Wheeler noted. "In addition, we
have been facing a challenging economic environment as a Canadian
manufacturer."
"This was a tremendously difficult decision to make, given the long history
of the Fergus operation and its experienced workforce," Wheeler continued.
"However, after careful consideration of all of the alternatives, we decided
it was necessary to cease manufacturing in Fergus. We understand that this
will create a great deal of uncertainty with our Fergus employees, and we
are committed to helping them during this difficult transition."
The company said it will meet with affected employees this week to discuss
details regarding the relocation schedule. Affected employees will be
offered severance benefits as well as job placement assistance.
The 500,000 square foot Fergus facility manufactures residential and light
commercial water heaters for the Canadian and U. S. markets. A. O. Smith
will continue to market water heaters under the A. O. Smith, GSW, and John
Wood brands in Canada.
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