Engel Machinery Inc. is closing its factory in Guelph, Ontario, which makes small to midsized injection molding machines and robots, a move that eliminates about 220 jobs.
The 240,000-square-foot plant will close by the end of May, said Stephan Braig, president and chief executive officer of Engel's North American operations. Engel will move the manufacturing work to its large-tonnage press factory in York, Pa., which last year was named the official North American headquarters.
Engel will expand the York factory through an addition, although details are not yet available.
The company also plans to open two new technical centers this year in North America, plus another one at a relocated Canadian operation. More details on the centers, including the locations, will be released later.
Braig cited several reasons for ending production in Guelph - which Engel began in 1976. The North American market for injection presses has shrunk dramatically in recent years. Braig said the remaining market is ``more dynamic than ever,'' as customers need a high level of technology and automation, delivered with very short lead times.
It makes more sense to cover that type of market from one main factory and several regional technical centers, instead of two assembly plants, he said.
``With having two plants and having two engineering groups and two infrastructures here, that hasn't necessarily helped in that dynamic environment. So really having one plant, one manufacturing group, streamlines that,'' Braig said.
Until now, Schwertberg, Austria-based Engel Holding GmbH has followed the same strategy in North America as it does in Austria: running two separate plants, one dedicated to small machines and one to big machines.
The Guelph plant makes presses in clamping forces up to 500 tons. York builds machines larger than 500 tons. Now, the York plant will also assemble Engel's smaller presses, the Speed line for packaging and the all-electric E-Motion line.
Braig said the company is looking for a site in the Guelph area to house spare parts, service and training. A team that designs downstream automation cells will remain at the scaled-down Canadian operation, he said. Engel will employ between 30 and 40 there, out of its current Guelph employment of 258.
``To our Canadian customers, the only thing that is changing is, we do not do manufacturing in Canada. But all the support infrastructure will remain unchanged to our Canadian customers,'' Braig said in a telephone interview.
Engel called a meeting Jan. 29 to tell Guelph employees about the shutdown, and then issued a news release the next day.
Engel has trimmed its Canadian workforce in recent years. The Guelph operation employed 500 in 2002 and occupied two buildings, one to build injection presses and another to make robots. Braig said the company closed the automation center about two years ago and moved it into the assembly building.
When Engel announced layoffs in Guelph last year, officials said the plant would no longer make the global-platform Victory press.
The strength of the Canadian dollar vs. the weak U.S. dollar has hurt Canadian manufacturers that export to the United States, by making their goods more expensive. But Braig said that, for the family-owned Engel, currency issues had no impact on the decision to close Guelph.
``Engel doesn't make decisions based in short-term developments,'' he said.
The end of Engel manufacturing in Guelph is more bad news for Guelph, a city of 115,000 people west of Toronto. Two weeks before the Engel announcement, Collins & Aikman Corp. said it was closing a major plastics plant in Guelph, cutting 500 jobs.
Peter Cartwright, Guelph's general manager of economic development, said the Collins & Aikman and Engel plant closings hurt.
``Certainly, the numbers are pretty significant. They're important jobs to the community, so we don't like to see them lost,'' he said.
Cartwright said some manufacturing gains have helped soften the blow, as another auto parts supplier has added 300 jobs and a government data center will hire another 200 people.