Magna International has said it will have to initiate a wind-down plan for its gear assembly plant in Syracuse, New York, after negotiations with workers collapsed.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The Canadian components maker said that it would not be initiating any new discussions with workers who rejected a plan the company said was necessary to keep the factory competitive.
“Going forward, NPG will not be able to be competitive without the operational advantages and cost savings proposed in the agreement, and as a result, Magna Powertrain will initiate a wind-down plan for the site,” a statement said.
The shutdown of the facility will ultimately eliminate 1,400 jobs.
The company had made a tentative agreement with United Auto Workers union but it was rejected by workers.
A shutdown would not be immediate but the company would now holds discussions with employees, suppliers and customers.
According to one report, the plant, which makes transfer cases for trucks and SUVs, lost US$117m in 2007.
Late last year, Magna International said it would shut two auto parts plants in the Toronto area in June 2009, eliminating 850 jobs after GM and Chrysler reduced their orders.
In November, the company reported a third quarter operating loss of US$112m, net loss was $215m and loss per share was $1.93, decreases of $379m, $370m and $3.31, respectively, compared to the third quarter of 2007.
