TORONTO - About 550 employees at the Siemens Energy gas turbine plant in Hamilton are set to lose their jobs as the German industrial conglomerate relocates the facility to North Carolina.

The jobs will be eliminated over the next 12 to 18 months and the facility, which manufactures large-scale gas turbines and components used in their assembly and repair, will be closed in July 2011.

Siemens Canada energy sector vice-president Bill Smith said in an interview with The Canadian Press that the decision was strategic and not a reflection of the performance of its Hamilton employees.

"Because of the great reputation that the employees and the workforce has (in Hamilton) we were able to secure another 15 months out of the facility," Smith said.

The company is relocating production from the Hamilton plant to a revamped unit in Charlotte, N.C., which will become a global production hub for a type of gas-powered turbine for electric utility plants.

"There's a pretty significant Siemens campus there already in Charlotte,..." Smith said. "The generators are all manufactured in Charlotte now and it's a large service centre, so it makes sense to twin them up."

He added that 90 per cent of production at the Hamilton plant was exported, with more than 75 per cent going to the United States.

"Strategically, we wanted to combine engineering and procurement and total manufacturing for gas turbine machines closer to the customers, which are predominately located in the United States."

Smith said some employees will be offered jobs in Charlotte, while others will be eligible for opportunities within Siemens Canada.

"The renewables business in Ontario is a growing concern...and there probably will be additional investments in renewable energy on behalf of Siemens... and we would certainly look internally first," he said.

Smith hinted there could be an announcement about additional Siemens investments in Ontario within the next 90 days.

Canadian Auto Workers union president Ken Lewenza said the announcement affects three shifts at the factory and will put 350 employees represented by CAW Local 504 out of work.

"Only two years ago, I toured this plant with the upper management of Siemens where I heard all about how productive and valuable our members were to the Siemens operations," Lewenza said.

'"Now it seems the company has performed a brash about-face and plans to dump a plant that has been in the city of Hamilton for more than 100 years."

"This is entirely unacceptable," the union leader added. "Instead of keeping the work in Canada, where the facility is equipped to produce the turbines, the company is choosing to send it to Charlotte, N.C., where it will put $130 million into an expansion. That expansion should happen here in the city of Hamilton."

"Do not expect the CAW to take this lightly," Lewenza said, pledging that the union would fight the closure.

Hamilton Mayor Fred Eisenberger said the news came as an unpleasant surprise, but that the job losses won't impact the city as much as they would have 20 years ago, when manufacturing jobs were the heart of the economy.

"It's certainly not a happy day, but I think we can continue to move forward and certainly it doesn't devastate our economy," he said.

Smith said the company understands the impact the decision will have on employees at the Hamilton facility and the local community and said it will offer comprehensive severance packages and outplacement services to affected employees.

About 200 service-oriented employees at an office tower in Hamilton are not affected by the decision.

The company said that new unit production work will be split between the company's gas turbine manufacturing facility in Berlin, Germany, and Hamilton.

Meanwhile, related service work will continue at the Hamilton facility until mid-2011, when it will be transferred to Charlotte and other facilities in their North American gas turbine repair network.

The company plans to invest $135 million and create more than 1,000 new jobs in Charlotte over five years, bringing the total in that city to 1,800. Production in Charlotte is scheduled to start in the fall of 2011.

In return, the state has promised Munich-based Siemens up to US$22.75 million in tax breaks and grants. County and city governments have promised millions more. A county development entity is also prepared to lend Siemens up to $120 million in low-interest loans available through last year's U.S. government stimulus package.

Siemens currently employs about 780 in Charlotte, already one of the company's largest U.S. plants, which manufactures and rebuilds gas turbines.

The company said last spring it would add more than 200 jobs in the city to increase the energy division's offerings of climate protecting technology for power plants. The plans included building a 75,000-square-foot office next to its manufacturing facility there.

-With files from The Associated Press

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