Declining tariffs, interest rates
hammer Kitchen Cabinet indu

HANOVER, ONTARIO — Three suc-
cessive years of declining tariffs on
U.S. furniture imports and home fur-
nishings and recessionary markets
have brought Canada’s own furniture
and kitchen cabinet industry to its
knees. As predicted by opponents of
the Canada-U.S. Free Trade agree-
ment, the declining duties along with
an artificially high Canadian dollar
and inflated interest rates, have crip-
pled the industry in many parts of the
country.

Here at Hanover Kitchens (Canada.

Inc.) [WA Local 1-500 members were
on a work sharing program with Can-
ada Employment and Immigration
which began in the springtime and
ended in December, 1990. The com-
pany makes high quality custom
kitchen cabinets for the Canadian
market.

Since the trade deal was signed,
duties totalling 9% have been removed
from the U.S. competitor’s imports.
For the first time many U.S. manufac-
turers have appeared on the scene
while Canadian producers have been
experiencing layoffs and closures.

At a home show in Toronto held in
September of 1990 about 50% of the
displays seen were done by U.S. and
European competitors, according to
Wally Ellig, plant manager at Hano-
ver Kitchens. This’ was a dramatic
change from the 1989 home show.

In 1989, Hanover lost one of its
major distributors in Wentworth,
Ontario to a giant U.S. Merillet com-
pany. It had a significant impact on
the number of orders received by
Hanover.

Other U.S. competitors which have
appeared on the scene are Schrock,
Goldcrest, and Crystal Kitchens
which have further hindered Cana-
dian producers.

Mr. Ellig says that Hanover Kitch-
ens plans to ride out the recession and
try to endure the declining tariffs
which will, under the free trade deal,
disappear completely in two years
time.

“There are lot of people who still
insist on buying Canadian, and we're
counting on that market,” says Ellig.

Hanover produces custom cut kit-
chens that cater to the “upper end” of
the market. The high quality and
trusted company name along with
reputable servicing ability will hope-
fully preserve an edge over some
cheaper competitors.

Mr. Ellig says the service and qual-
ity provided by exclusive Hanover
distributors should see the company
through the downturn in the Cana-
dian market.

Major competitors for Hanover
include Canac of Toronto, a huge man-
ufacturer with over 600 workers, and
peer Kitchens of Kitchener Water-
00.

Only one major Canadian competi-
tor, Paris Kitchens, is organized, rep-
resented by the United Brotherhood
of Carpenters and Joiners.

Many other smaller, custom shops
in southern Ontario also produce cab-
inets for the custom market.

Local 1-500 secretary-treasurer
Irvin Baetz, who works in the ship-
ping and packing department at Han-
overs, says it is going to be a tough
winter for many union members now
that the work sharing program has
ended. It won't be until October of
this year that the workers can reapply
to Canada Manpower for work sharing.

Currently there are less than 120
IWA members on the seniority list,
down from over 140 at the beginning
of 1990. In early December 9 workers
were added to the layoff list.

Brother Baetz says Hanover is hes-
itant on cutting back on the work
force too much due to the risk of
losing skilled workers.

The workers work on an hourly
wage scale and avoid piece-work sys-
tems which are in much of the furni-
ture industry.

Paul Heimbecker, quality control
officer, says that more care is put into
work when the employees are not
rushing to make quotas.

The company produces cabinetry
on particle board which comes from
Levesque Plywood Limited in Hearst,
Ontario, a union operation certified to
IWA Local 1-2995.

© Spraying sealer on a cabinet is Local 1-500 member Joanne Gross.

© Larry Breautigam at work fitting a cabinet at the Hanover plant.

Veneer or a thin layer of melamine is
applied to the particle board, while
the counter legs are made of particle
board with a thick arborite material
on top.

The manufacturing operation uses
two types of doors; a low pressure
paper thin material on the particle
core, or a laminated high pressure
door.

Hanover also has European doors
made with plastic or melamine ex-
teriors.

Basically, the company produces
universal standard kitchens which are
a wood construction cabinet with
wood or veneer doors.

Its wood doors are mostly made of
birch or maple. Much of its birch
blanks come from another I WA opera-
tion, Thomson-Heyland Ltd. in Burk
Falls, Ontario (Local 1-1000).

Many of the doors, which are
routed, consist of a hardwood veneer
on a birch core. Birch is also used in
the cabinets hardwood frame and rail
construction.

Mr. Ellig says technological change
during the last 4 years has helped the
company stay competitive.

But the competition from larger
US. competitors like Merillet is a
threat to the entire Canadian industry.

“Plants in the southern states are
huge, they can just eat you up,” says
Mr. Ellig.

He said that a U.S. cabinet manu-
facturer produces their own plate core,
which gives them an added competi-
tive advantage.

“But I don’t see, at least at the
present time, how U.S. companies can
service the customers like we do,”

- says the plant manager.

Local wins long
battle for severance

SMOOTH ROCK FALLS, ONTARIO
— It took over 4 years to get things
straightened out, but finally union
members layed off at Abitibi-Price
Inc. bush and mill operators in Octo-
ber, 1986 have received a severance
pay settlement from Abitibi-Price Inc.

At that time four years ago Abitibi,
sold its pulp mill in Smooth Rock
Falls to Malette Lumber Inc. Malette
closed its stud mill operation attached
to the mill and layed off 75 workers in
its woodland operations.

The bush workers received a sever-
ance package, however about 75 work-
ers who were attached to Abitibi pulp
operations at Smooth Rock Falls, who
had been layed off for over 6 months
received no compensation after the
Malette takeover.

IWA-CANADA Local 1-2995 went to
bat on behalf of the disadvantaged
workers before the Ontario Employ-
ment Standards Branch and received
a decision in favour of the workers.

Abitibi then took the decision to
judicial review which upheld the origi-
nal decision. Then the local union
went back to the Employment Stan-
dard Branch to get an elaboration on
the decision.

In early September last year, as the
union was preparing for a long series
of hearings, Abitibi contacted the
local to reach a settlement, which was

affected.

Abitibi has agreed to pay out a
proper settlement package to its for-
mer Smooth Rock employees.

The settlement varies from $2,000
per individual at the low end to over
$23,000 at the high end.

Marcel Lacroix, secretary-treasurer
at Local 1-2995 says the lengthy bat-
tle was worth it.

“Hopefully this decision will pre-
vent other companies from running
away from their responsibilities when
they sell their assets,” says Brother
Lacroix.

eventually accepted by 95% of thos.

10/LUMBERWORKER/FEBRUARY, 1991