End of an era nearing with Terra Nova Shoes closure
Kodiak Group Holdings, the company that operates the iconic Terra Nova Shoes boot manufacturing plant in Harbour Grace, will mark two notable milestones in the province this month.
On Nov. 15, a Saturday no less, the company will cut a cheque for just under $1.9 million to the Government of Newfoundland and Labrador. It's the final instalment on an $8 million interest-free loan granted to the company six years ago to help relocate its manufacturing operation to this province, expand its factory and add 50 new employees to its then complement of 170 staff.
Two weeks later, on Nov. 28, the company will, with the exception of some last-minute sewing, cease all operations, ending more than 40 consistent years of footwear manufacturing in the Conception Bay North town of 3,100 residents.
The sprawling facility will be put up for sale, and 80-plus employees at the plant will be laid off, affecting families throughout the region.
It's the end of an era that many, including 43-year-old Glenda Seguin, hoped would never come.
"Nov. 28 is going to be the hardest day," said Seguin, who started working at the factory 25 years ago.
Despite its best efforts to make things work in this province, there were just too many obstacles, Kevin Huckle, president of Kodiak Group Holdings, told CBC News.
"We just simply couldn't do it any longer. No one should have to continuously lose money in an operation," Huckle said Friday from his office in Cambridge, Ont.
Worker not surprised
The company announced in early July that it would close the Harbour Grace facility and relocate its operations to Cambridge where the company already operates a head office and distribution centre.
The new factory will open next year, with job numbers expected to reach 160 by the end of 2015.
The announcement was greeted with disappointment, but not everybody was shocked.
Seguin began noticing two years ago that orders were dropping.
She's not angry at the company.
"I understand where they are coming from," she said.
Seguin is still contemplating her future, and is considering going back to school to get a trade.
She owns a home in Harbour Grace and would like to find work close by, but is also prepared to move if necessary.
High costs of doing business
The facility is the town's largest employer, producing safety boots for the military and industry.
The company blamed the higher costs of doing business in this province for the decision to relocate.
We just simply couldn't do it any longer, with the competitive nature of our business, in Newfoundland.- Kevin Huckle
Huckle singled out freight costs and the time it takes to ship raw materials to this province, and then ship finished products to its customer base in larger centres.
He also took aim at the premiums paid by employers to the Workplace Health, Safety and Compensation Commission (WHSCC). These funds are used to cover anticipated costs of workplace injuries, return-to-work programs and the cost of administering the workers' compensation system.
Huckle said WHSCC rates in this province are six times those in Ontario, and eight times the rates paid by employers in Quebec.
"Workers' Comp has been getting off pretty easy on this, but that played a big role in our decision," he said.
Huckle said it's not easy walking away from Harbour Grace, and praised the company's Newfoundland workforce.
"They've done a wonderful job for our company. It's not their fault this decision is being made," he said.
Huckle said his company is paying "liberal severances" and bonuses for workers to stay on until the closure. The company also invited employees to apply for jobs at the new plant in Cambridge.
However, very few workers have expressed an interest in staying with the company.
"It appears we only have a few people at best that will be making the move," he said.
A stark contrast
The atmosphere in Harbour Grace these days is in stark contrast to the mood in September 2008, when government and company officials staged a high-profile event to announce a major expansion and loan agreement.
There was talk about "future growth" at the facility and the company's "strong commitment" to the Terra Nova Shoes operation.
That enthusiasm and optimism has now been replaced by uncertainty, but Huckle insists the company did all it could.
He said a lot has changed in six years, and, "The model simply doesn't work any longer to make goods in Canada that far away from our customer base."
He said the company has "gone above and beyond what our obligations are," and is trying to make the best of a difficult situation.
"The factory has been losing money for a long time, and we had to take this decisive action," he said.
"The positive side is that we are still committed to making boots in Canada. We're one of the very few brands that will continue to make products in Canada. We just simply couldn't do it any longer, with the competitive nature of our business, in Newfoundland."
Meanwhile, the Department of Business, Tourism, Culture and Rural Development is "actively pursuing" initiatives to attract new businesses to the area and to allow existing businesses to expand.
"The department is also working with company representatives in efforts to find new occupants of the facility," a spokesperson said in a statement to CBC News.