Fergus, Ontario, Canada (April 3, 2013)—A. O. Smith Corporation announced this afternoon it will discontinue manufacturing operations at its Fergus, Ontario, residential water heater facility.
The company plans to consolidate residential and light commercial water heater manufacturing into other North American plants. The relocation of the manufacturing operations will begin over the next several weeks, and the company expects to end the majority of production July 1. The transfer will affect approximately 350 employees in manufacturing and directly related support functions.
Fergus will remain the central office of A. O. Smith’s Canadian business with a total of approximately 125 employees. The facility will house the sales, marketing, finance, customer service, information technology, and product engineering functions. The company’s regional water heater distribution center also will remain in Fergus. The A. O. Smith plant in Stratford, Ontario, that manufactures pump tanks for water systems is not affected by this action.
“Today’s action is the result of a comprehensive study evaluating the competitiveness of our North American operations,” Kevin J. Wheeler, president and general manager of North American water heating, said.
“The water heater industry is extremely competitive and has been burdened with overcapacity for a number of years,” Wheeler noted. “In addition, we have been facing a challenging economic environment as a Canadian manufacturer.”
“This was a tremendously difficult decision to make, given the long history of the Fergus operation and its experienced workforce,” Wheeler continued. “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.”
The company said it will meet with affected employees this week to discuss details regarding the relocation schedule. Affected employees will be offered severance benefits as well as job placement assistance.
The 500,000 square foot Fergus facility manufactures residential and light commercial water heaters for the Canadian and U. S. markets. A. O. Smith will continue to market water heaters under the A. O. Smith, GSW, and John Wood brands in Canada.
A. O. Smith, with headquarters in Milwaukee, Wis., is North America’s leading manufacturer of residential and commercial water heaters and boilers. The company employs 10,900 people at facilities in the United States, Canada, Mexico, China, the Netherlands, and India.