Autos News

Magna to shut New York plant, 1,400 jobs to be cut

VANCOUVER, British Columbia (Reuters) - Magna International MGa.TO will close its gear assembly plant in Syracuse, New York, the Canadian auto parts maker said on Wednesday, after workers rejected a contract the company said was necessary to keep the factory competitive.

The shutdown of the New Process Gear facility will ultimately eliminate 1,400 jobs.

A company statement said a tentative agreement negotiated by the company and United Auto Workers union would have given the facility a future, and that it was disappointed that the employees had rejected it.

“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,” it said.

The shutdown will take some time while the company holds discussions with employees, suppliers and customers, said Marc Neeb, Magna’s executive vice-president of global human resources.

Union officials were not immediately available for comment, but were preparing a statement. Details of the rejected agreement have not been made public.

The plant, which makes transfer cases for trucks and SUVs, lost $117 million in 2007, and workers agreed in early 2008 to cut wages and benefits in return for a payment that would ease them into a new hourly wage rate, according to media reports in Syracuse.

Reporting by Wojtek Dabrowski and Allan Dowd; editing by Peter Galloway