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Canada plastic packaging plant closures

In July, two U.S.-based plastic packaging companies announced plant closures in Canada.Atlanta-based Graphic Packaging will shut down its plastic packaging in Brampton, ON, which will eliminate about 150 jobs.The news did not sit well with the Communications, Energy and Paperworkers (CEP) Union of Canada, the union representing the workers at the plant.

Heather Caliendo

August 6, 2013

3 Min Read
Canada plastic packaging plant closures

"Many employees have spent most of their working lives at this plant and now the U.S.-based company simply wants to vacate without a serious discussion with its workforce," said CEP VP of the Ontario region, Dave Moffat. "We are talking about workers who have put in up to 40 years at the plant and who deserve some say in the plant's closure as well as fair compensation."

Graphic Packaging spokesperson Tricia Taylor told PlasticsToday that layoffs will be effective on September 13. The company produces plastic packaging for a variety of industries.

"While the closing of the Brampton facility was a difficult decision, it is a necessary step to allow Graphic Packaging to better leverage our strengths across the business," she said. "We certainly understand the effect this determination has on our Brampton employees, as well as their families and the community. We are working with the CEP Union to finalize the details of the programs we will provide affected employees. "

The CEP said the union has worked with Graphic Packaging to keep the plant up and running, including accepting 20% wage cuts, and reductions in health and pension benefits.

For the second quarter of 2013, Graphic Packaging experienced a sizeable decrease in net income of $21.2 million compared to $42.4 million in 2013. Net sales in the flexible packaging segment decreased 8.9% compared to the second quarter of 2012. 

The union believes that Graphic Packaging's "difficulties" are due to debt incurred as a result of various mergers and acquisitions.

"Companies have a responsibility toward their employees and the community in which they are," Moffat said. "Offering recognition and dignity to individuals who have worked in the plant for decades is a small but important gesture to show the company cares. In this case it is clear Graphic Packaging does not."

Pretium to focus on plastic bottles
Pretium Packaging plans to cease operations at its site in Pointe Claire, QC by the end of December 2013. In a news release, the company said that the closure is directly tied to the company's decision in 2010 to de-emphasize the sale of preforms as a product category and to focus its development, design and investment on growth in its core product line of plastic bottles. 

The Pointe Claire site was primarily a preform manufacturing site and did not fit within the company's current and long term market strategy, the company stated. About 65 employees will be affected in the plant closure, while 30 new positions will be created at the company's other locations as equipment and work is transitioned to those sites.

Pretium says that this decision will have no impact on the company's other site in Quebec, based in Ville St. Laurent, which is a specialty bottle manufacturing site supplying the pharmaceutical, food and personal care markets.

"This was a very difficult decision and our team has worked hard over the past three years to explore other options with regard to products at the Pt. Claire site," said CEO George Abd. "Unfortunately its geographic location and high cost structure combined with its mix of equipment left us with limited options. We are saddened by the need to terminate any operation and will be working closely with our employees at the site on the timing of the shutdown and on the severance benefit plan."

Pretium Packaging operates 11 manufacturing facilities in the U.S. and Canada and employs more 1000 people at those sites and its corporate headquarters in Chesterfield, MO. 

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