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CAW Local 4005 members out of work as Scanwood Canada Ltd. is placed in receivership
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Approximately 235 CAW Council 4000/Local 4005 members at Scanwood Canada Ltd. are out of work as the Supreme Court
refused the company’s plea for more time for protection from its creditors, thus placing the company into receivership.
Scanwood has been operating under court protection since February 2011 through the Companies’ Creditors Arrangement Act
(CCA). That protection ran out on April 18, 2011, at which time Scanwood asked the court for another extension.
A bid from a new group of investors - SBA Furniture Group of Lithuania - fell through and the workers at the company refused to
accept further concessions.
CAW National Representative Carla Bryden said the past few months have been tough on workers at Scanwood, saying that they
didn’t know from one day to the next if they would have a job or not. Following a Union meeting held on April 3rd, Scanwood
members expressed their frustration with their employer and said that they had nothing left to give the failing furniture maker,
realizing what could be in store for them in rejecting further wage and benefit concessions.
Due to its ongoing financial problems, Scanwood laid off the majority of its workforce for what it said at the time would be for
two to four weeks. It scaled down its operations to a skeleton crew.
Scanwood made nearly one million chests of drawers yearly for IKEA, its only customer. The recession hurt sales, and the
company owed nearly $24 million.
Scanwood’s creditor protection was originally granted by a judge in early February. At that time, the company owed secured
creditors about $14.8 million; unsecured creditors were owed about $9 million, and it has since borrowed another $1 million from
TCE Capital.
Scanwood’s secured creditors include the Royal Bank of Canada, which called in a $2.1-million company line of credit earlier this
year; the province of Nova Scotia, which is owed almost $4.6 million after loaning Scanwood money last fall to buy automated
equipment to boost productivity; the Business Development Bank, which is owed $4.92 million; and IKEA Supply AG, which is owed
about $3 million.
RBC wants to be paid out on its operating line of credit, while the Business Development Bank lost confidence in Scanwood, which
meant the company was required to find a new term lender.
The CAW is attempting to arrange meetings for its Scanwood membership with Green Hunt Wedlake, the company appointed as
receiver for Scanwood, to explain the process moving forward and to provide information related to the Wage Earner Protection
Program and Employment Insurance Benefits.
Wage Earner Protection Program information:
http://www.ic.gc.ca/eic/site/cilp-pdci.nsf/eng/cl00783.html
Employment Insurance information:
http://www.servicecanada.gc.ca/eng/sc/ei/index.shtml
The CAW is attempting to arrange meetings for its Scanwood membership with Green Hunt Wedlake, the company appointed as
receiver for Scanwood, to explain the process moving forward and to provide information related to the Wage Earner Protection
Program and Employment Insurance Benefits.
Wage Earner Protection Program information:
http://www.ic.gc.ca/eic/site/cilp-pdci.nsf/eng/cl00783.html
Employment Insurance information:
http://www.servicecanada.gc.ca/eng/sc/ei/index.shtml
Related:
April 11, 2011 - CAW Local 4005 members at Scanwood reject company concessions
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This video was posted on
YouTube by a
Scanwood employee >
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