Many knew it was coming, but that didn’t make it easier.
Saskatchewan Wheat Pool delegates say they are disappointed that 55 more elevators will close.
The announcement came during the company’s annual meeting in Regina last week. The latest news puts the closures announced over the last two years at more than 350.
“We’ve been prepared for it in the southeast for a couple of years,” said Kipling delegate Lorne Rygh. “But when they announce that yours is the one today, it’s hard.”
Kipling is among the facilities that will close by July 31, 2001. The closures include traditional elevators, specialty locations that handle one commodity, and local service outlets. Some traditional and specialty facilities will be converted to local service outlets, which don’t handle grain but buy it and sell inputs.
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The rationalization affects 250 employees, including 215 Grain Services Union jobs – 145 in country operations, 35 in maintenance, 18 at the Regina head office and 17 at AgPro Grain.
As well, sources said several senior managers will be leaving the company shortly. Sask Wheat Pool would not confirm the management layoffs.
GSU general secretary Hugh Wagner called the union cuts devastating.
“We firmly believe there is a significant mistake being made here,” he said. “This will not assist in retention of market share or grain migrating to a central location.”
The cuts come on top of 270 union and management positions eliminated in March. Wagner said last week’s announcement seems to come from panic about the low share price and pressure from banks.
Pool president Marvin Wiens said the board has been discussing the closures, upon management’s recommendation, for some time. A special, intense meeting began last Wednesday evening and lasted until nearly 1 a.m. That’s when the board made the final decision.
Wiens said the facilities had to be closed to reduce operating costs. He said the reaction from delegates was expected.
Most recognize the company needs to be strong in the long term, but at the same time they are disappointed things are changing so dramatically.
Donald Blocka, a Prince Albert delegate, said many left the annual meeting disgruntled. He didn’t know if his elevator was on the closure list, but he said it wouldn’t surprise him if it was.
“Our local point was the largest handler in the province when there was no concretes,” he said.
“We didn’t have much left. People are bypassing the smaller ones.”
The rationalization is expected to save the company $6 million in pre-tax savings this fiscal year and $11 million each year thereafter. The pool will record a restructuring charge of $13 million against second-quarter earnings.
Chief executive officer Mayo Schmidt said the move will let the company concentrate on its core business.
“The commitment of the pool is to continue its focus on maximizing value for all shareholders by increasing cash flow, reducing debt, improving return on invested capital and divesting of assets that are not fundamental to the company’s core strengths,” he said.
The list of facilities affected by the announcement was not made public by Sask Pool. However, other sources said Nov. 20 the list includes:
- Traditional elevators in Avonlea, Briercrest, Cabri (converting to local service outlet), Kipling, Mossbank, Prince Albert D (converting to LSO), Perdue and Rosthern.
- Specialty facilities in Balgonie, Delisle, Englefeld, Fiske, Hamlin, Bruno (converting to LSO), Milestone, Midale, Saltcoats, St. Brieux, Watrous A and Asquith.
- Local service outlets in Archerwill, Bengough, Birsay, Brooksby, Consul, Fox Valley, Frontier, Grenfell, Hanley, Harris, Hyas, Invermay, Kerrobert, Kyle, Lashburn, Leroy, Meota, Nipawin, Prairie River, St. Brieux, Tramping Lake, Radville, Minton, Creelman, Francis and Rocanville.
