Versatile Tractor Plant to Be Sold or Closed

The Versatile tractor manufacturing plant in Winnipeg must be sold or closed by April 1, 2000 as a result of an anti-trust suit filed by the U.S. government against its parent company, Fiat. The suit was filed in response to a merger between a Fiat subsidiary, Ford-New Holland, and the U.S. tractor manufacturer, Case-International Harvester.

The US anti-trust suit claims that the merger would give the new company such a dominant position in the farm machinery market, especially in relation to four-wheel-drive and large two-wheel-drive tractors and haying equipment, that it could increase prices to farmers and decrease quality while maintaining market share. The ruling by the U.S. court specifies that Fiat must divest itself of its Winnipeg plant and the specific lines of tractors assembled there. It essentially requires that the plant be sold to another large farm equipment manufacturer with an existing dealership network in order to preserve the present level of competition.

The Winnipeg Versatile plant was a pioneer in the development of four-wheel-drive tractors in the 1960s. By the early 1980s it employed over 1100 workers. In 1981 it was taken over by New Holland, a Dutch farm equipment manufacturer. New Holland removed the manufacturing equipment and converted the plant into an assembly-only plant. New Holland was subsequently bought by Fiat. With the acquisition of first Ford and now Case-IH, Fiat has emerged as the largest farm equipment manufacturer in the world.

Employment at the Winnipeg plant has dropped over the years to the current level of less than 700 employees, of whom all but about 220 are presently on indefinite layoff. Another 2000 jobs in the Winnipeg area are largely dependent on the Versatile plant. If a buyer cannot be found by April 1, the U.S. Anti-Trust Agency can order that the plant and its equipment be sold off piecemeal. It is generally believed that the U.S. courts ordered the divestment of the Winnipeg plant rather than a U.S. plant due to political pressure from the US government.

The Versatile workers, represented by the Canadian Auto Workers (CAW), are demanding action from the provincial and federal governments to protect their jobs. They point out that the federal government has handed over tens of millions of dollars to the owners of the plant over the past two decades in the form of loans and research and development grants. To date there has been no indication from the Federal government on whether or not it will require Fiat to refund grants it received in the name of creating jobs in Canada.