Canadian Diecaster Set for Closing by GF Automotive

Feb. 24, 2009
"Subcritical mass of new orders" cited, brings an end to production in NAFTA region Production equipment transferring to China Montreal plant is former E.D.C. Inc.

GF Automotive, a business unit of Georg Fischer Ltd., will transfer its nonferrous diecasting production from a plant in Montreal to one in Suzhou, China. The shift will be completed by July, thus ending GF Automotive operations in the NAFTA region.

According to a Georg Fischer Ltd. statement: “The decision has been motivated by the sharp deterioration of economic conditions in North America in recent months and is in line with the review of all GF Automotive sites announced by Georg Fischer in November 2008.”

In November, the group issued an ad hoc statement anticipating poorer results because of declining demand from automakers and machine-tool manufacturers, and that its two related business units — GF Automotive and GF AgieCharmilles — were preparing “profitability and efficiency programs” to minimize the effects.

GF explained that a steep decline in new orders has left the Montreal operation with a “subcritical mass” of activity, making it impossible to run it cost-effectively.

The Montreal plant is the former E.D.C. Inc., which Georg Fischer bought in late 2006 for an undisclosed price. It produces light-metal automotive and commercial-vehicle components, e.g. brake parts, as well as parts for the electronics, telecommunications, and construction markets.

At the time of the purchase, GF’s plan was to raise the plant's output gradually, and expand it as a platform for supplying the North American automotive industry.

Of its decision to exit the North American market, GF says there will be no major changes to its 2009 financial statements.

In its release, the Switzerland-based industrial group emphasizes that its automotive products for North American customers will be produced in China, but the move will be organized to ensure there will be no disruption in supply to customers. The Montreal plant’s 60 employees will be released in stages as production is scaled down, and a “small portion” of the operations supplying customers that request local production will be carried out with local partners in the future.