Workers at the Terra Nova Shoes factory in Harbour Grace were blindsided this morning (July 8) when they reported for their regularly scheduled shifts.
As the group piled into the footwear production facility, the employees had no idea they were about to be told the plant was closing later this year.
The Compass has learned three executives from Kodiak Group Holdings, the owner of Terra Nova Shoes, were on hand to announce to some 80 workers the facility on Water Street will cease operations this November.
After receiving the news, workers were sent home for the day. They will return to work Wednesday.
Workers told The Compass no advanced notice was given before today, and some have referred to the news as “devastating.”
Word came this morning
Terra boots began production in 1971 in Harbour Grace, and has since become a well-known brand. But after November, all production will be moved to Cambridge, Ont.
A media release was received late this morning with a statement from Kodiak.
In the release, it was confirmed each employee will receive a severance package, although the details have not been made public, and those who decide to stay on until November will also receive bonuses.
The Compass has also learned some supervisory workers will continue their employment at the facility in Cambridge.
Others will have the opportunity to work in Cambridge as well, but they will have to apply. Those who are chosen will receive relocation assistance.
Kodiak president Kevin Huckle said in the release that cost is the primary reason for shutting down, but the company will stay in Canada.
“We are committed to manufacturing in Canada,” Huckle said. “The reality is the high costs to continue operating the Harbour Grace plant have become unsustainable over the past several years.”
The company has received numerous loans and grants over the past decade, but even with the extra funding, the workforce has decreased by half.
Some $8 million in an interest-free loan was given to the company in 2008 by the provincial government.
In 2010, 59 workers were laid off. More workers lost their positions in a second round of lay offs.
The company was supposed to start supplying boots to the Canadian Forces this year, but all production will take place in Cambridge after November.
Not long after the announcement was made, several Harbour Grace councillors headed to the town hall to discuss what the closure means for the town of some 3,200.
Mayor Terry Barnes, Deputy Mayor Sonia Williams, Coun. Pat Haire and Coun. Kathy Tetford spoke with The Compass.
“It’s very disappointing that expansion in 2008 led to layoffs in the past six years, and now total closure,” Williams said. “It’s devastating.”
Haire would like to see the town bounce back from the loss as fast as possible because of the loss of taxes from the company, which is some $70,000 annually.
“It’s a sad day for the town, and the surrounding area,” he said. “A lot of people are out of work. It’s too bad they couldn’t make it work, but we will do whatever we can to (speed up) the situation.”
Mayor had no idea
Mayor Barnes said he heard the news Monday after getting contacted by a reporter from St. John’s, and felt he needed to investigate.
Barnes and Carbonear-Harbour Grace MHA Sam Slade went to the facility Monday, but could not confirm the information. They left under the influence that it was “business as usual.”
Barnes said the shutdown is devastating to the people of the region who work at the company.
Barnes is disappointed the council was not informed that the doors would be shutting to Terra Nova Shoes, and felt it should have been told prior to being released to the public.
“Council will have to get together, and see what steps we can take from here,” he explained. “Do we want to lose jobs? Absolutely not.”
Tetford said she wants to ensure those workers involved in the closure are not left out in the cold.
“The town is taking necessary steps to protect the assets, and make sure the residents of Harbour Grace and surrounding areas are treated in the best way possible,” she said.
Slade offers assistance
MHA Slade was one of the first to announce his intentions to assist any displaced worker.
He called the closure "devestating to the Town of Harbour Grace, and those workers throughout the region."
"I am here to help in anyway possible for those employees and their families," he said.
In a discussion with The Compass late Tuesday afternoon, he explained he would be available to speak with anyone affected by the closure to help in any way he can.
"Anyone and everyone who is affected and would like some help can contact my office, and I'll do everything I can to help them," he said.