The Fergus GSW plant of Milwaukee-based water heater manufacturer A.O. Smith will end the majority of its production on July 1.

350 workers at the plant will lose their jobs.

The company announced Wednesday it decided to close the plant after reviewing the competitiveness of its North American operations.

"The water heater industry is extremely competitive and has been burdened with overcapacity for a number of years," said Kevin J. Wheeler, the president and general manager of  A.O. Smith’s North American water heating operations.

"In addition, we have been facing a challenging economic environment as a Canadian manufacturer."

Wheeler added that the decision to close the Fergus operation was "tremendously difficult", given the history and experience of the plant and its employees.

"However, after careful consideration of all of the alternatives, we decided it was necessary to cease manufacturing in Fergus. We understand that this will create a great deal of uncertainty with our Fergus employees, and we are committed to helping them during this difficult transition," said Wheeler.

Fergus will remain the head office of A.O. Smith’s Canadian business with a total of about 125 employees. The company’s regional water heater distribution center will also remain in the town.

An A.O. Smith plant in Stratford that manufactures pump tanks for water systems will not be affected.