Connors lays off 30 plant workers

Connors Bros. Ltd. laid off 30 of its 880 workers at its Blacks Harbour sardine plant on February 1 as a cost-saving measure in the face of increased global competition.
According to Ron Schindler, executive vice president and managing director of Connors Bros.' Clover Leaf Seafood Company, the company took the step because of significant competition from Asian companies with low labor costs. In addition, he notes, "Fish supply has always been a critical factor to the success of the sardine business. Both the 2009 and 2010 seasons were extremely challenging, both in terms of catches and fish size." He points out that changing environmental conditions have affected fish behavior in many fisheries, including the herring fishery. "Alternative sources of supply from outside the Bay of Fundy have diminished in recent years as demand has grown. This makes our valuable but relatively short Bay of Fundy fishing season even more important to our success."
Schindler, however, affirms the company's commitment to the region, stating, "This decision is in no way a reflection on the outstanding history at Blacks Harbour. With approximately 850 positions remaining, our priority is to work through operational and production efficiencies to protect our future in Blacks Harbour and assure the long‑term viability of the plant. We have a great leadership and workforce remaining in whom we have great confidence in managing and maximizing our future long‑term plans for Blacks Harbour."
Connors is providing employment transition support to those who have been laid off, including severance, and outplacement counseling.
To limit any further cuts in the workforce, Schindler says the company has been undertaking a restructuring plan "to retain the Blacks Harbour facility and position it as an efficient, low-cost operator. A critical component of the company's business strategy is to be the leader in shelf stable seafood. Sardine products are synergistic with this business strategy. We are now competing in a global environment, and we must source products that can be competitive in the marketplace. We are confident we can manage the cost structure to enable the plant to compete with overseas alternative sardine sources."
Because the cost structure of the plant is significantly higher than that of overseas competitors, more changes are needed to make the plant viable, he says. "Additional steps needed to ensure the long-term viability of the plant include changes to the employee association agreement, shift flexibility and significant process changes within the plant to increase efficiency of current processes."
Concerning the plant's long-term outlook, Schindler says, "We expect that the process improvements that will be implemented in 2011 will improve the plant performance regardless of fish supply. A strong fishing season will help; however, given the magnitude of change required, we expect this process to take several years. Our modernization project, which began in 2010, will need to continue, and automation will need to replace some of the older packing formats for cost and safety reasons. The modernization project will take at least two years to fully implement."
Over the past two decades, Connors has taken significant steps to cut its costs, including consolidating all of its operations to the one plant at Blacks Harbour. The company closed all of its other sardine factories over the 20-year period: Campobello in 1990, Deer Island in 1991, Back Bay in 1999, and Grand Manan at the end of 2004. After acquiring Stinson Seafood Company's four Maine sardine plants in 2000, the company, which merged with Bumble Bee Seafoods in 2004, closed the Lubec and Belfast plants in 2001, the Bath plant in 2005 and the Prospect Harbor plant, the last one in Maine, in 2010.