Second shoe drops at Lakeport
Three years after buying brewery, Labatt closes it
Meredith Macleod
The Hamilton Spectator
(Mar 31, 2010)
When Labatt bought the Burlington Street "little brewery that could," many inside and outside the plant wondered when this day would come.
Not if, but when.
Labatt had been trying for years to shake the pesky "buck-a-beer" upstart that was gulping a bigger share of sales.
Then they swooped in and bought the company in February 2007, paying $201.4 million to shareholders.
There was instant talk about the possible loss of a Hamilton icon. Everyone from analysts to workers speculated that Labatt would close the plant.
Neither Lakeport CEO Teresa Cascioli nor Labatt officials offered comforting promises to employees.
There was talk that Cascioli, long viewed as a Hamilton hero, would be cast as a sellout if her $43-million payoff meant the loss of the plant.
It took three years for that to happen.
Yesterday morning, the company's 143 workers were summoned to a downtown hotel and given the news that their jobs are gone.
"Really, this is no big surprise," said worker Kim Norgate, of Dundas, who has worked at the brewery 18 years.
Other workers said the closure is a "stab in the back," adding they long suspected Labatt bought the brewery in 2007 to acquire its market share and shut it down.
"Teresa sold us out" echoed on the sidewalk outside the hotel.
Labatt says the decision is final and the equipment in the building will be hauled away as Labatt seeks to "improve its operating efficiency in a demanding market."
Production of Lakeport products will shift to Labatt's London, Ont., plant.
Employees -- 99 hourly workers, another 22 on layoff and 22 salaried staff -- have been told not to come back to work until Monday.
Craig McInnes, president of Teamsters Local 938, which represents the workers, said the union will now begin to negotiate with Labatt to try to improve the severance packages and work out how the company's assistance to workers for retraining or job placement will be handled.
Ward 2 Councillor Bob Bratina said he was dismayed to learn Labatt plans to remove the equipment from the building it rents from the Hamilton Port Authority.
"That means no one else can buy it, rehire maybe a hundred workers and brew beer in Hamilton," Bratina said, adding he thinks the province should step in and stop Labatt moving the equipment.
If the beer-making equipment were left, Bratina suggested, a craft brewer could start in Hamilton, maybe saving 50 jobs.
"Instead, they're intent on destroying an industry that has been functioning here for years and they need to be challenged on that," he said. "For them to remove the production equipment is draconian. It's almost evil to remove the possibility of a competitor moving in."
Bratina also backed consumer calls for a boycott of Labatt products in Hamilton -- noting the company currently has about 45 per cent of the local beer market.
"That's something we can use," he said. "We need to meet with this company and ask how much of that market they expect to hang on to if they go through with this plan."
Norm Cooper, Lakeport chair of Local 938, said the announcement hit the workers and all of Hamilton hard.
He said the older workforce has many years of service -- he has 28 years since Amstel owned the brewery -- and it will be tough for them to find jobs.
"Where will they go next? Not in Hamilton. There is nothing in Hamilton."
Jeff Ryan, Labatt's director of corporate affairs, said the workers will be paid in full for the eight-week notice period but won't be required to work the last four weeks. The company has also set aside funds to help with job searches or retraining.
As well, Labatt will actively contact area employers, asking them to consider the highly trained brewery employees for any job opportunities.
Labatt will also leave behind $500,000 for charitable and community support programs.
Charlie Angelakos, Labatt vice-president of corporate affairs, said in a statement that closing Lakeport is the "only rational business decision available to us."
He said Hamilton is among the brewer's highest-cost plants.
London is its most efficient.
But union president McInnes said he couldn't understand why the company would not seek a buyer. When Labatt bought the plant, Lakeport had between 10 and 14 per cent of the market in Canada and the plant won efficiency awards.
"If they sold it, the same people who could do that are still there, only the owners change and the jobs stay.
"That market share speaks volumes. It all comes down to money."
George Croft, Lakeport's former president and chief operating officer and a beer industry veteran, called yesterday's news "sad (and) disappointing."
"Workers at the Hamilton facility were some of the finest folks I've ever worked with. They saw it at the brink of disaster and saw it come back. They worked very hard.
"I'm not sure where those folks go now to find jobs."
Croft, now CEO of Brick Brewing Company in Waterloo, says the timing of the announcement is "bit of a shock" as the beer industry gears up for summer sales. "This has played out faster than I ever thought it would."
Despite ongoing fears, many workers appeared to be wary but lighthearted heading into yesterday's meeting. It appeared few believed Labatt would shut down Lakeport at the beginning of the beer-drinking season.
"For heaven's sake, the temperature is going to be 24 C on Friday ... summer's coming and people are going to buy beer," said one man.
Prev
Linear Mode
