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Hard times for labor hit Ontario

There's big trouble in Canada's industrial heartland. In Windsor, the country's quintessential manufacturing center, plants have been closing at the startling rate of one every nine days so far this year.

Gone is the Wickes bumper plant, the Wayne school-bus plant and the Coulter radiator factory, to identify just a few of the former mainstays now shuttered in this Southwestern Ontario city of 194,000.

"We've got more factories closing in this city than you can shake a stick at," says Charles Valeur, a Windsor steam fitter. "It really upsets me, because jobs are going down the toilet."

As it goes in Windsor, so it's going elsewhere in Canada's factory belt, the heavily industrialized swath of Ontario north of Lakes Erie and Ontario.

More and more, this part of Canada is beginning to resemble a northern version of the Rust Belt, as the U.S. Midwest was called during its bout with hard times in the mid-1980s.

In London, Somerville Packaging Ltd. will shut its cardboard-box plant next month, leaving 150 people out of work. In Collingwood, Goodyear Canada will stop making radiator hoses next year, at a cost of 100 jobs. Renfrew, in Eastern Ontario, has been devastated by the loss of three major employers this year.

Of course, layoffs and idle plants are to be expected when an economy shifts gears from good times to a recession, as Canada's appears to be doing now. But this time around, the manufacturing slump has disturbing differences from a normal, cyclical downturn. For one thing, it began well before the economy actually moved into recession.

In May, total manufacturing jobs were down 166,000 from a year earlier, a plunge of nearly 8 percent, according to Statistics Canada. Job totals have recovered somewhat since then, but are still 133,000 below the peak reached in early 1989.

The losses hit in supposedly good times, but have already reached about half the decline in manufacturing jobs posted during the 1981-82 recession, the worst slump in Canada since the 1930s.

And layoffs were the rule in past recessions; the jobs eventually returned when the economy revived because the plants still existed.

The last recession "was bad, but it wasn't due to plant closings," observed Ken Maheux, president of Canadian Auto Workers Local 195 in Windsor.

Maheux's local represents mainly workers at parts makers, a sector that has been hit hard as companies have shifted production to U.S. plants after the signing of the U.S.-Canada free-trade agreement. Ten of the plants employing his members have shut recently, putting nearly 800 workers on the street.

Economists, business officials and trade unionists blame a wide range of factors for the manufacturing malaise. Chief among them is the government's policy of high interest rates and a strong dollar.

These twin problems have made it difficult for businesses to reap benefits from the free-trade agreement. They have also caused a much bigger shift of production out of Canada than expected as a result of the trade pact.

"If we continue along our present high-interest-rate, high-dollar trend, Canada will lose a good deal of output in labor-intensive areas to countries like Mexico, or even the U.S.," investment bank Scotia McLeod Inc. said in a recent analysis of the Canadian economy.

Canada's manufacturing decline bears an uncanny resemblance to the recession that hit the Rust Belt in the United States five years ago. At the time, the industrial zone stretching from Pennsylvania to Wisconsin was laid low by the triple whammy of high interest rates, a soaring U.S. dollar and intense foreign competition.

As if this weren't bad enough, manufacturing was also becoming global as unskilled work shifted from the U.S. heartland to Mexico and other new industrial areas.