Modeling Journey

Magna lays off 850 in Newmarket and Aurora

My condolences to those who lost their jobs at the Magna plants in Newmarket and Aurora yesterday. The manufacturing sector has been hit hard in my riding with Tenatronics closing recently as well. Clearly the automotive sector is facing tough times right now. Beyond the headline is 850 real people with families to support. This news is a major blow to our community and yet another example of the challenges manufacturers are facing in Ontario and beyond. I wish these workers the best of luck in finding new jobs. I also wish Magna International all the best during these tough times. They are a major employer in the region and thousands of people rely on the success of the company to support themselves and their family. Hopefully there will be some form of assistance to the auto sector soon. Threats to the industry go far beyond the big three.
-Darryl


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Magna to close two Ontario parts plants

VIRGINIA GALT

Globe and Mail Update

November 26, 2008 at 1:41 PM EST

Auto parts producer Magna International Inc. announced Wednesday that it will close two plants in Ontario, affecting 850 employees.

The company said difficult economic conditions and depressed demand for its products forced the decision to shut its plants in Aurora and Newmarket and consolidate operations.

The affected plants are run by Exterion, a manufacturing division of Magna International's Decoma International unit. The work currently done at the plants will be transferred to other Decoma operations.

“The difficult decision to close the facility came after a careful evaluation of the facility's financial status, future business and open capacity in other facilities,” Magna International said in a statement.

“Those factors, combined with difficult economic conditions facing the North American auto industry due to reduced domestic production and customer demands, have made Exterion operations no longer viable,” the company said.

Magna said it will try to transfer employees to other operations. Those who cannot be placed will be given notice or severance packages based on years of service at the company. Magna will also provide help to those seeking jobs with other companies.

The shutdowns will affect 350 employees in Aurora and 500 in Newmarket. They produce fascias, fenders and body side panels for Chrysler and General Motors vehicles.

Earlier this month, Don Walker, co-chief executive officer of Magna International, said the company was preparing for a sustained downturn.

“We want a lean and efficient operation, while not sacrificing our future, so we are stronger when the automotive market recovers,” Mr. Walker said during a conference call Nov. 4 after the company announced a loss of $215-million (U.S.) for the June-to-September period.

“If the downturn stays as difficult as it has been, I think we'll see a lot of failures in the supply industry,” Mr. Walker said at that time.

Magna International has been hit hard by the slump in demand for automobiles, both in the United States and Europe. Between 80 and 85 per cent of Magna's North American business is generated by the Big Three auto makers, who are seeking a $25-billion bailout from the U.S. government.