N.S. contributes $9M to expand Michelin tire plant
Published Thursday, January 17, 2013 6:16PM AST
WATERVILLE, N.S. -- Tire manufacturer Michelin rolled out positive news for Nova Scotia's troubled economy on Thursday, committing to a $64.1-million expansion of its factory in the Annapolis Valley.
The factory is a mainstay of the area, providing 1,300 jobs making wide tires for commercial trucks, off-road vehicles and earthmovers.
Dana LeBlanc, president of Michelin Canada, said the investment means the company is planning to keep the positions in the province with 50 more jobs being added.
"What a great day for Nova Scotia," he said. "This is rural Nova Scotia and you'll find that people in rural Nova Scotia like to stay here and have a great job."
He said the project will lead to a 3,000-square-metre addition to the existing facility, adding technology and production lines that will pump out truck tires.
The province will provide an additional $8.9-million to the French multinational, provided the expansion is carried out and the jobs are created over the next eight to nine years.
LeBlanc says the subsidy was one factor in the decision to keep expanding.
However, he said a stable workforce and location were also reasons jobs are staying on the East Coast.
Michelin Canada has over 3,700 employees, with 3,500 of those working at Michelin's three tire production plants in the Nova Scotia communities of Bridgewater, Granton and Waterville.
"We're close to a great port in Halifax, ice-free year around. And we're close to the Trans-Canada so we can ship the tires both ways if needed," he said in a telephone interview.
The province has recently been struggling to hold onto manufacturing jobs -- particularly in the pulp and paper sector -- and there has been a steady exodus of skilled tradespeople to the West.
Just 40 kilometres to the east of Waterville, the Minas Basin Pulp and Power mill closed before Christmas, leading to layoffs of almost 100 workers. Last June, Montreal-based Resolute Forest Products closed its paper mill in Brooklyn, N.S., throwing 320 people out of work.
Meanwhile, the province's largest megaproject -- Irving Shipbuilding's plan to build 21 combat ships for the navy over 30 years -- is unfolding more slowly than originally expected. Company officials are now saying steel won't be cut until 2015.
NDP Premier Darrell Dexter said he had to ensure that Michelin didn't take the work out of the province.
"If we didn't compete and win these jobs, then they would go elsewhere and we'd be worse off without question," he said.
Prior to coming to power in 2009, the NDP and its labour supporters were critical of a law known as the Michelin bill -- a law that required activists to organize workers at the entire Michelin organization in the province, rather than on a plant-by-plant basis.
However, Dexter hasn't touched the bill and has carried on the practice of providing subsidies to the corporation.
"There's all kinds of people who want to go back and reframe the fights of the past. I'm just not interested, I'm not into that," he said.
Dexter said the terms of the deal require Michelin to spend the money on the expansion before the province will kick in its incentives.
LeBlanc said it will be about four years until the provincial money begins to flow to the firm.
"We have to spend half of the capital investment before we see a dollar from the province," he said.