Shermag to close 4 of 8 domestic plants
By Furniture Today Staff -- Furniture Today, December 16, 2007
Sherbrooke, Quebec — Canadian case goods and upholstery producer and importer Shermag said last week it will close four of its eight domestic plants because of business pressures.
Plants slated for closure are in Bishopton and Cookshire-Eaton, Québec, and in Edmundston and Saint-François-de-Madawaska, New Brunswick.
The closings will affect 320 employees, reducing Shermag's total work force to 750. Measures will be taken to assist employees who are losing their jobs, the company said.
Shermag officials said they are deciding where to produce the furniture collections that have been manufactured at the four facilities.
The decision to close the plants was made after an analysis by a committee of Shermag's board of directors, created on Nov. 20. The committee is responsible for identifying measures to return Shermag to profitability and ensure its long-term viability.
"It is with the utmost regret that the company is forced to take such measures," said. Claude Pichette, chairman of the board. "Shermag's situation is part of the crisis (with which) the Canadian manufacturing industry is dealing.
"The effect of factors such as the continued strengthening of the Canadian dollar, the crisis of the mortgage loans in the United States and its effect on furniture sales, as well as Asian competition, force Shermag to take strict measures, such as the plant closures, to return to profitability as quickly as possible."
In November, Jeff Casselman resigned as president and CEO of Shermag. The company is searching for a replacement.
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