Hood Packaging Corp. has told employees it plans to close its Burlington, Ontario, plastic film plant by Oct. 1.
“It's a financial decision based on profitability of this plant and its equipment,” said Hood spokesman Ron More in a telephone interview. The operation was established in the early 1960s, estimated More.
Burlington produces mainly linear low density polyethylene film and heavy-gauge industrial bags. Two other plants, in Calgary, Alberta, and Tyler, Texas, make similar products and will take over the production. Hood has begun relocating machinery and will continue to do so in stages until fall.
Burlington employs about 65 in the Burlington film plant and layoffs will begin July 19. The plant is unionized under the United Steelworkers.
USW Local 16505 President Laszlo Horvath said he did not agree with how Hood is handling the closure. The company has already begun moving work to the United States and has not upgraded machinery, he said in a telephone interview.
“They are offering the minimum to workers as specified in legislation,” Horvath said. Hood is offering 26 weeks of severance pay. The average wage at the site is C$25-27 (US$23.75-25.65).
“[USW] has been running this plant for nearly 50 years,” Horvath recalled. Most workers are 45 to 55 years old and will have trouble finding equivalent employment, he believes. Horvath said the relocation could be a form of union busting.
A unionized Hood paper plant in Burlington will remain open.
Hood runs nine film plants in North America. The plants make a diverse product slate, including pouches, milk bags and laminations.
Plastics News estimated Hood's North American film sales were about $190 million in its 2012 film and sheet survey.