MONTREAL — Seeking to save at least 750 jobs, the Canadian government has offered two textile companies in Huntingdon, Quebec, a $485 million aid package ($600 million in Canadian currency) over five years if they agree to remain open.
“We hope that their announcement was made prematurely and we hope that the measures announced today will bring the companies to change their mind,” said Transport Minister Jean Lapierre, the most senior cabinet minister from Quebec.
The package takes the form of tariff breaks on certain raw materials the companies use, as well as $40 million in cash assistance to help the firms move into higher-value products that will face less direct competition.
The government’s announcement on Wednesday came a day after Cleyn & Tinker, the largest Canadian manufacturer of worsted wool fabric, said it will begin winding down operations at its five plants in April and consolidate operations in Burlington, N.C. It employs 500 to 600 people.
Sportswear fabric maker Huntingdon Mills (Canada) Ltd. is closing Friday and eliminating 250 jobs, citing a lack of business.
Neither company commented on whether they would accept the aid offer and stay open. They are blaming increased competition from China and a strong Canadian dollar for their decisions to close.
International Textile Group of Greensboro, N.C., on Monday said it agreed to acquire Cleyn & Tinker and integrate it with its Burlington Worldwide apparel fabrics operations.
Before the government’s offer, Cleyn & Tinker president Jonathan Hurtsfield-Meyer said the firm had been able to compete when the U.S. dollar was worth $1.35 Canadian, but not at its current level of about $1.20. About 75 percent of its products were sold in the U.S.
The Canadian government opted to throw the mills a lifeline in advance of the Jan. 1 elimination of apparel and textile quotas by the 148 nations of the World Trade Organization.
The Canadian Apparel Federation lobby group welcomed the news, calling the tariff cuts a significant step in assisting the apparel industry to cope with trade liberalization next year.
“We have not asked the government for increased protection,” said CAF president Elliot Lifson. “We have not asked for a subsidy. We have simply asked the government to provide us with the tools to be competitive.”
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The Canadian Textiles Institute, which represents fabric and yarn makers, wasn’t so pleased.
“It falls short of what we told the government we needed to survive and prosper,” said CTI president Liz Siwicki.