Wescast Closing Ontario Foundry

Wescast Industries Inc. plans to close one of the two ductile iron foundries it operates in Wingham, ON, in order to reduce operating costs and to “better align capacity with expected volume levels.” Production from the Wingham North Huron foundry will be reassigned to the other plant in Wingham over the coming months.

Wescast manufactures exhaust manifolds for a range of engine styles, and claims to be the world’s largest supplier of cast exhaust manifolds for passenger cars and light trucks. In addition to the two Ontario plants, it has foundries in Oroszlany, Hungary and Wuhan, China.

The Wingham North Huron plant is expected to be closed by the end of the first quarter. About 140 workers will be affected by the closing. Because workers at both plants are represented by the same collective bargaining agreement, employees at both sites will be affected.

The company issued a statement that its board of directors approved the restructuring plan “in light of recent announcements by Wescast's major North American customers to significantly reduce production volumes.”

"The very difficult decision to close the Wingham North Huron foundry came after a careful evaluation of our cost structure, expected future business volumes and available capacity in other facilities," stated Wescast chairman and CEO Ed Frackowiak. "Those factors, combined with the severity of economic conditions facing the North American automotive industry, have led us to this course of action. We sincerely regret the impact this will have on our employees and the Wingham community."

Wescast stated it will incur restructuring charges between C$60 million and C$65 million ($48.2 million-$52.3 million), to be reported in its 2008 year-end statements.