Novartis AG will close its Ciba Vision plant in Mississauga, Ont., next year, laying off 300 workers, another in a growing list of factory shutdowns in the province.
The plant, which has been making contact-lens solution for about three decades, will start winding down in May with the full closing slated for the end of 2014, The Globe and Mail has learned. At the same time, it will ramp up capacity at its Fort Worth, Tex., facility.
Since H.J. Heinz Co. announced on Nov. 14 that it will close a factory in Leamington, Ont., and wipe out 740 jobs, there has been a cascade of plant-closing announcements throughout the southern Ontario manufacturing belt.
They include CCL Industries closing an aerosol container plant in Penetanguishene, with 170 employees; auto parts maker Faurecia SA shutting a seat mechanism and frames factory in Bradford, with about 550 jobs, and, this week, food giant Kellogg Co. closing a cereal-making plant in London, with 550 jobs.
Globalization and technological change have been long-standing factors, with companies citing uneven demand, squeezed margins and the desire to move to lower-cost jurisdictions. Rapidly-changing consumer habits are throwing another wrench in operations. In Ciba's case, a consumer shift to daily, disposable contacts is dampening demand for sterile solution made at the Mississauga operation.
"We're continuously reviewing and adapting our manufacturing environment to reflect changing market dynamics and enhancing our competitiveness," said Mark Smithyes, head of government affairs and market access for Alcon Canada Inc., a division of Swiss-based drug maker Novartis, which purchased Alcon from Nestle SA in 2011.
Its decision is more to do with simplifying production lines, he added, than "any reflection on the business environment in Ontario."
The plant has long exported its solution around the world. No new jobs will be created in Texas as a result of the Ontario shutdown; however, capacity there will be ramped up, he said.
Staff were informed on Nov. 4, one employee told the Globe, though no public announcement has been made yet.
"When we got called together we thought there might be some layoffs – but we did not expect a full-out closure," said the worker who asked his name be withheld as he's still on the payroll. "It was quite the shock."
Both Ciba and Alcon produce contact-lens solution, so workers have long been concerned the overlap could lead to downsizing. It was still a blow when the announcement came, the employee said.
The wave of layoffs and downsizing mean manufacturing employment has fallen by 4 per cent in Ontario in the past year, Bank of Montreal chief economist Douglas Porter said in a research note Thursday.
"It would seem to us that this is a much bigger issue for the medium-term Canadian outlook than the more hyped housing bubble/household debt concern," Mr. Porter wrote.
Even in Canada's industrial heartland, there are now more people employed in health care and social assistance than in factories. It's a massive shift from as recently as 2000, when the ratio was 2:1 in favour of manufacturing, he noted.
A lower Canadian dollar might give some reprieve on the costs front. The currency has weakened in the past month and closed below 94 cents (U.S.) Thursday.