By Shawn Jeffords, The Observer www.theobserver.ca
A new wheel plant will rise from the ashes of UBE Automotive and it could mean employment for hundreds of people.
UBE officials confirmed Wednesday a deal has been reached to sell the troubled Sarnia wheel factory to a Canadian company.
The buyer, which has not yet been identified at its request, plans to continue making automotive wheels.
Japan-based UBE announced in January it would close the plant and lay off all its workers by the end of the year.
“It looked pretty grim for a while there,” said plant manager Rob McPherson. “But now there’s a future. We’re just going to have to give it some time to see what the company’s plans and objectives are.”
McPherson said the new owner is expected to reveal its intentions for the 350,000 square foot factory on Highway 402 soon. Layoffs will continue at the six-year-old facility until only a six-member management team remains in place to coordinate the transition.
McPherson said the workforce will be rebuilt slowly over a two-year period, with a round of hiring starting in the spring of 2010. Former UBE employees will be considered before other applicants, he said.
“It’s going to take from a year to three years to get the employment level back up to what it was at UBE’s peak,” he said.
At one point, the plant had 255 full-time staff and operated at 100 per cent capacity, seven days a week.
Sarnia Mayor Mike Bradley said the news represents a remarkable turnaround for the plant. He lauded UBE for accepting an offer that might not have been the most lucrative one on the table, but which was best for Sarnia-Lambton.
“I can’t go into all the details but they were generous to the community in accepting this offer over some of the others,” said Bradley, noting the deal has been in the works for months.
UBE had considered demolishing the plant, which would have cost local government more than $400,000 a year in lost taxes.
The city has no financial interest in the sale but will assist the new owner, which plans to apply for green energy grants to retrofit the plant, he said.
UBE manufactured primarily aluminum wheels for upscale car models. The new owner is expected to diversify and use new technology to work with car companies that UBE didn’t, the mayor said.
“UBE and Honda have had disputes since the First World War so UBE could never get Honda business,” he said. “This new company has already made approaches.”
George Mallay, general manager of Sarnia-Lambton Economic Partnership, was upbeat.
“It’s a tough environment out there for business,” he said. “We’re optimistic about the future … The company is very impressed with the quality of the workforce and management at the plant.”
In 2005, UBE made 1.4 million aluminum wheels for automakers using robotic equipment imported from Japan. That same year the company closed its Mason, Ohio plant, the only other UBE manufacturing site in North America.
Stiff competition in recent years from Chinese manufacturers had an impact, company representatives have said.
Observer Article ID# 1667755
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