MONTREAL — Ninety workers at a Chinese-owned textile plant in Drummondville, Quebec, were told Thursday the plant will close for three to six months. The news came a week after they signed their first collective bargaining agreement, according to the Quebec Federation of Labor union.
The plant, located 70 miles northeast of Montreal, is owned by China Worldbest Group of Shanghai. The company cited the need to reorganize its management team as the reason for the shutdown, said the union. The new labor agreement increases salaries 15.7 per cent over two years.
A company spokesperson did not respond to requests for comment, although Worldbest said last month the plant was having difficulties due to poor market conditions.
The plant produces fine knit cotton fabric using yarn from a Worldbest plant in Mexico. The $32 million facility was built three years ago with the help of about $11 million in government subsidies. At the time, company officials said the plant would employ 380.
While goods made in the Drummondville facility qualify for duty- and quota-free treatment under the terms of the North American Free Trade Agreement, they cannot be used in garments produced in Central America and the Caribbean under the Caribbean Basin Trade Promotion Act.
“Worldbest was counting on the free flow of goods under NAFTA, which never materialized,” said Elizabeth Siwicki, president of the Ottawa-based Canadian Textiles Institute.
Siwicki said two other Montreal-based knitters, Agmont and Malpac, recently closed for the same reason.
Gaetan Desnoyers, a union official in Drummondville, expressed concerns the plant might not reopen at all.
“They’ve broken all sorts of promises since they opened, including the number of workers they were supposed to hire, and they were supposed to pay better wages,” Desnoyers said. “They’ve been losing money since they opened and have been financed by the head office in China to get their foot into North America.”
The 147 nations of the World Trade Organization are to drop their quotas on fabrics and garments next year.