Statement from Burlington Mayor Marianne Meed Ward Regarding Gentherm Announcement
*Please see below a Statement from Mayor Meed Ward that was sent out Tuesday, March 10, 2020.Burlington, Ont. — March 10, 2020 — We recently heard the news regarding Gentherm’s announcement to consolidate all of its North American electronics manufacturing to Mexico, resulting in the closure of its Burlington facility and the loss of approximately 150 local jobs.We know this is extremely upsetting for our residents and those affected. It is always disruptive to a community when a local company closes its doors to relocate operations elsewhere, especially to employees and their families. Our compassion is with the individuals who’ve been affected by this announcement. My office is working with the office of our Burlington MPP to find ways to support those affected with employment services to help them land on their feet.International trade is the federal government’s jurisdiction, and municipalities have no legislative authority in trade, however, we will continue to advocate for fairness for our communities, and where we can, local sourcing.Burlington Economic Development is the economic development arm of the city and was in regular contact with Gentherm as recently as February to assist with relocation and expansion to keep them in Burlington. We are very disappointed the company chose to leave.This situation is a reminder that we need to fight to protect jobs and industry as we plan the future mixed-use areas around our three GO stations and Major Transit Station Areas (MTSA). These areas can’t simply be high-density residential and token commercial. Complete communities require significant employment and that will be a focus for me as we complete the GO/MTSA planning this year.Below, you will find an FAQ compiled by Burlington Economic Development detailing some background.Sincerely,Mayor Marianne Meed Ward City of BurlingtonQUOTES: ANITA CASSIDY, EXECUTIVE DIRECTOR, BURLINGTON ECONOMIC DEVELOPMENT“Burlington Economic Development is very sorry to hear of the decision Gentherm has made to leave Burlington and consolidate its operations to Mexico. Our team has worked closely with Gentherm to support their North American operations, and it seems their decision to consolidate was a financial and business decision that would have been difficult for the City to prevent. We have nothing but compassion for the employees whose lives have been affected as a result of the situation, and we have been in touch with our community partners such as the Centre for Skills Development to ensure they are ready to offer support to employees in transitioning in their careers. Supporting the growth and retention of businesses like Gentherm is a core part of our work and we continue to focus on how we can better support companies to stay and grow in Burlington.”
Gentherm (formerly Etratech) FAQ for 2020
Why is Gentherm (formerly Etratech) Leaving Burlington?Etratech was acquired by Gentherm Incorporated on November 1st, 2017. Gentherm currently has four locations, including its headquarters in Burlington at 1047 Cooke Boulevard, a facility in Coahuila, Mexico, and two facilities in Shenzen, China. In an effort to save on costs, Gentherm has made the decision to expand its facility in Mexico and close their Canadian facility (Etratech) due to the higher cost of labour and doing business. This is due to Gentherm beginning a restructuring of their North American Facilities, consolidating in Celaya, Mexico due to their requirements for “expanded manufacturing space.” No exact figures are available currently.How many jobs are being lost? Approximately 150 jobs are currently on site at the Burlington headquarters. As the facility is being closed, the company is expected to lose employment however no exact numbers can be reported on at this moment.How many Jobs were held by Burlington residents? Gentherm have not provided a breakdown of the jobs held by Burlington residents. Their workforce is drawn regionally from Niagara to Mississauga, with most employees living in Hamilton and Halton Region.What is the impact to Burlington’s economy?First and foremost, we want to recognize the employees whose lives have been affected as a result of this situation, and convey our utmost compassion for what they are going through. We understand that for them, this is not about the economy, but about their families and their livelihoods. We are actively taking measures to support them, which are addressed in other sections of the FAQ.Burlington has a diverse economy of over 5,000 businesses and 86,000 jobs according to the 2018 Halton Employment Survey. About 13,000 of those jobs are in the manufacturing sector. The loss of Gentherm’s 150 jobs represents less than 0.2% of jobs in Burlington. Our economy continues to grow and has a strong value proposition in attracting and retaining high-tech knowledge-based companies. In 2019, 151 new businesses signed leases within the city and traditionally our employment grows at a rate of 1,000 jobs a year. We are seeing an increased number of high-tech and professional services jobs that align closely with Burlington’s highly educated population. This will create more opportunities for residents to live and work in Burlington. Burlington Economic Development is currently working with companies that expect to bring over 400 new jobs to Burlington in 2020 in the information technology, advanced manufacturing and professional services sectors.What did Burlington Economic Development/The City do to try to retain Gentherm?Burlington Economic Development worked with Etratech, and then Gentherm over the past three years throughout the transition to new ownership. We visited Gentherm in February of this year to discuss challenges and offer support to help retain the company after their lease expires in 2022. Gentherm was receptive to our efforts to encourage them to stay in Burlington and consider alternative sites for lease. No indication was made that they were considering leaving the city at that time.Have we reached out to Gentherm to see what can be done for employees and if anything could have been done to keep them in Burlington?We have reached out to Gentherm’s management to discuss the decision and any assistance that can be provided to employees. Typically, Economic Development organizations would be engaged by a company as part of the business case development to relocate a facility anywhere between 18 months to 2 years in advance of a decision being made in order to provide information on competitive factors and any incentives that could be applied. However, in this case, the business case analysis has already been completed and the company’s decision has been made.What are we doing to support the transition of Gentherm employees to new opportunities?We have reached out to our local partners to ensure that the employees will be well serviced and assisted as they transition to new forms of employment within Burlington. These partners will be providing coaching, training, and assistance in accessing EI and hiring programs. We are in the early stages of this, and more details will be provided on our website as they become available.What is the timeframe for the move? Gentherm’s Current lease expires in November of 2022, however, they plan to have their restructuring into their new facility in Celaya, Mexico completed by mid-2021 (as reported by the media). We have reached out to their management team to confirm the reported timelines.How much property tax will be lost if the building is empty?No taxes should be lost as the City of Burlington vacant property tax rebate was removed in 2018.Are there any businesses looking into this property? The property will be redeveloped as part of the development of the Aldershot Go Mobility Hub area. This was already part of the plan. We will work with the future developer to bring additional jobs to the area suitable to the new development. We do not anticipate that the property will be made available to lease prior to redevelopment but will work with the owner to bring in a new business on a short-term lease if possible.What will happen to the property/building? I.e. is Gentherm going to sell it, keep it for another purpose, etc. Gentherm operates from one location in Burlington; it is leased and is not owned by Gentherm. Headquarters – 1047 Cooke Boulevard – owned by Mainway Property Limited • Under or approximately 1 Acre • 45,000 Square Feet Approximately • Expected availability for short-term lease Q2-Q3 2021 The property is part of the Aldershot GO Mobility Hub and is expected to be redeveloped as mixed-use development.What factors may have influenced this decision?Company location decisions are typically driven by the ability to move in within business timelines, cost competitiveness and availability of talent.--*Posted by John Bkila, Mayor's Media and Digital Communications Specialist