INDUSTRIAL HAMILTON: A TRAIL TO THE
FUTURE
International Harvester Company of Canada, Limited
Location: North side of Burlington Street, between Harvey Lane and Sherman
Avenue, Hamilton, Ontario
International
Harvester's existence in Hamilton was set into motion in 1902 by a man named
Alexander Dunn. A member of the finance committee of the city council in Hamilton,
Dunn had heard through a friend that the Deering Harvester Company of Illinois
was looking to build a branch factory in Canada. Realizing that this company
could bring many jobs to Hamilton, he promptly went to Chicago and managed to
convince the company to consider Hamilton as its Canadian location. Deering
sent an expert to examine the city after which the company proposed to build
there. However, the proposition was dependent on a $50,000 bonus from the city
to aid with construction costs. A by-law to authorize the bonus was prepared,
but local labour unions campaigned against it claiming the company (due to its
open shop policy in the U.S.) would not let labour unions manage employee affairs.
Consequently, a large majority rejected the bylaw. Nonetheless, city officials
were determined to bring Deering to Hamilton and so they annexed the waterfront
property that the company had selected as their building site. 
They
offered the company the farmland tax rate as opposed to the industrial tax rate
that was significantly higher. Though the offer was only good for 15 years,
Deering recognized that it was worth substantially more than the original bonus
and therefore they decided to locate there.
The
citizens of Hamilton knew that they would be getting a large industry but they
did not realize how large it would be. Deering had only constructed a few buildings
before it was amalgamated with four other harvesting companies: McCormick Harvesting
Machine Company, Plano Harvester Company, Warder, Bushnell & Glessner Company,
and Milwaukee Harvester Company. Together, the five businesses formed the International
Harvester Company. Plans for the new plant were expanded and construction resumed.
Upon
the plant's completion in 1903, 1,400 (union and non-union) workers were employed.
One of the International Harvester Company of Canada's (I.H.C.) first actions
was to create a council, composed of managers and employees. To this council
differences and problems could be submitted, helping to prevent employee unrest.
In 1905 two docks were constructed, one was devoted to the harvester works,
the other to the binder twine industry. Though I.H.C. originally imported twine,
it would create a mill for its manufacture in 1925. Initially I.H.C. prospered,
with employment reaching 4,000 in 1912. Part of the company's success can be
attributed to the fact that vast quantities of food were needed to support the
Allies in World War I. In order to meet the demands, farms became increasingly
mechanized, thus providing I.H.C. with an expanded market.
The company had four products at the outset: harvesting machines, seeding machines,
tillage implements, and threshers. By 1919 however, the lineup had expanded
to include cultivators, harrows, land rollers, and (with the purchase of the
Oliver Chilled Plow Works plow factory) plows. The first major industry to locate
in Hamilton, I.H.C. was now the largest farm implement plant in the British
Empire. In 1929 it occupied 199 acres: 123 for the harvester works, and 67 for
the twine mill.
I.H.C. knew that without a satisfied workforce it could not prosper. With this
in mind, in 1939 the company's Employees' Benefit association adopted a hospitalization
plan where workers would receive benefits of $4.50 per day for up to 31 days
when hospitalized. Similarly, in 1940 the Employees' Savings and Extra Compensation
plan was introduced, allowing employees to save for retirement or unemployment.
In this plan the company matched 50% of the employee's investments into their
savings fund.
During World War II, I.H.C. produced a restricted amount of farm machinery.
This
was due to the fact that it was simultaneously manufacturing equipment for the
war, including all the Canadian universal carrier hulls. 1944 marked the transition
of I.H.C. to a completely autonomous Canadian company (though it was still owned
by I.H.). In 1945 a $2.5 million modernization plan was announced by I.H.C.
It was completed in 1948 and included a drill plant and a new plant for the
manufacture of seeding machines. Additionally, a plant was built in Chatham,
Ontario for the exclusive production of I.H.C. trucks (a new market for them).
I.H.C. now provided all the seeding machines for its parent company's world
market. By 1952, I.H.C had expanded its product line to include over 40 types
of farm implements. That same year I.H.C. employees threatened to strike for
the first time due to delays in contract negotiations and wage disputes. However,
they were able to reach a settlement with a 17-cent per hour pay increase (among
other things). In 1953 I.H.C. constructed a $750,000 advanced engineering and
product engineering building for research into new agricultural apparatuses.
This investment soon paid off since that very year a new fast-hitch coupler
was introduced which allowed a farmer to change the equipment hooked up to his
tractor in a matter of seconds. In 1954, 150 workers were hired to aid in the
manufacture of hay balers, a new product for I.H.C.
1956
signaled the start of major expansions for I.H.C. Beginning with a $650,000
district building as the headquarters of its motor truck and farm equipment
sales and service operations, I.H.C. would spend $1 million in 1958 to improve
its docks for seaway shipping. That same year a production expansion program
was launched, dividing the plant into three operations. The first division,
the Hamilton Works, designed and produced farm equipment. The second division,
the Hamilton Heavy-duty Equipment Works, manufactured diesel transport trucks
and construction equipment. The last division, the Hamilton Tractor Works, was
responsible for the first crawler tractors to be made in Canada. Additionally,
the work schedule was increased from 10 months per year to a full 12 months
(though the company frequently shutdown during the summer). The total cost of
the expansion was $8.5 million and it boosted the number of employees from 1,815
to 2,895. In 1960 another $8.5 million expansion commenced and included a $3.5
million plant which increased farm equipment production.
In 1965 1,500 workers staged a lunch-hour walkout, which was followed by a
two-day shutdown caused by a "wildcat" strike involving 2,300 unionized
workers. A full-on strike was averted with the acceptance of a three year contract
that included higher wages, longer vacations, and bigger pensions. The following
year, a $5 million addition to the assembly building replaced older multi-storey
buildings which were deemed inefficient. In 1968, despite having the highest
sales in its history, I.H.C.'s profits dropped 40%. More advancements in 1969
included the $200,000 conversion of I.H.C.'s power house to natural gas operation,
which increased operating efficiency and allowed the company to conform to Ontario's
Air Pollution Act.
With
the arrival of the 1970's, I.H.C. saw a return to increased profitability. This
was accomplished through plant-wide restructuring, which involved the closing
of its grey iron foundry and twine mill. In 1971 the plant shut down in April
for what was supposed to be three months. However, a strike by the skeleton
crew and office workers in July prevented the recall of employees. The strike
lasted until November with the workers' acceptance of a 20% wage increase over
three years. Despite the strike, profits rose in 1971 by $6 million. The next
year I.H.C.'s financial rebound continued with profits of almost $18 million.
However, due to a declining market in North America for construction and agricultural
equipment commencing in 1977, I.H.C. began to concentrate on exports to developing
countries. The next year the company centralized its national agricultural and
truck marketing offices in Burlington, eliminating smaller offices in Quebec,
Manitoba, and British Columbia. Also in 1978, I.H.C. was able to avoid its traditional
summer shutdown due to increased business.
Fortune would not favour I.H.C. for much longer though. 1980 saw a $53.4 million
drop in profits due to a five-and-a-half month strike by I.H.C.'s parent company,
International Harvester, as well as a weak dollar and high interest rates. This
signaled the beginning of the end for I.H.C. Two years later I.H.C.'s engineering
section was shut down as part of its parent company's restructuring efforts
to save money in the face of a $4.2 billion debt. Further cutbacks in 1982 included
the elimination of I.H.C.'s construction division as well as its truck service
centers. Despite these reductions, for the first time since 1934 I.H.C. lost
money; $39.5 million to be exact. In 1984, International Harvester's farm equipment
operations were sold to Tenneco Incorporated for $430 million in cash and stock
and from that point on would be operated by Tenneco's affiliate J.I. Case Company.
Although I.H.C. still retained its truck operations in Chatham, its long life
in Hamilton had come to a conclusion.
J.I. Case Company
One of J.I. Case Company's (J.I.) first actions upon obtaining
ownership of I.H.C.'s farming operations was to close down 15% of J.I. and I.H.C.
dealerships. This occurred in 1985 along with the acceptance of a three year
contract by the former I.H.C. employees, restoring some of the concessions they
gave up in an attempt to save I.H.C two years earlier. Furthermore, J.I. invested
in new equipment and product lines at the Hamilton plant. Under new ownership,
the plant was successful once again. In the second quarter of 1986 it had an
operating profit of $18 million, compared to an operating loss of $22 million
during the same time in the previous year. Despite earning profits, in 1988
J.I. eliminated 30 full-time jobs in Hamilton as part of a company-wide corporate
restructuring. However, workers at the plant accepted a new contract with pension
increases convincing some senior members to retire early, thus allowing some
of the laid-off workers to return. In 1990 $12.5 million was invested in a modernization
program. It included an electrostatic paint system, as well as the reorganization
of sheet metal fabricating, welding, and assembly operations into manufacturing
cells to increase efficiency. The following year, the material handling and
crop harvesting product lines were phased out to make way for new product lines:
disc harrows and plows. Apparently, further streamlining was required as employment
at the Hamilton plant was reduced to 930, compared to 1,600 in 1990.
These statistics foreshadowed the announcement by J.I. of the plant's closing
in 1992. Fortunately for the workers, the plant was saved by its managers through
various cost-cutting measures. A year later, a $14 million survival plan was
approved. Product lines were rationalized, production facilities were consolidated,
obsolete buildings were demolished, excess land was sold off, and computer controlled
punching and cutting machines were installed. After all this reorganization
the plant occupied 60 acres, less than one third of the total acreage during
I.H.C. control. In 1995, production of planting equipment was transferred to
Hamilton necessitating a $6 million investment. In addition, the overall restructuring
of the plant was successful seeing that J.I. more than doubled its profits with
a net income of $346 million for that year. In spite of those profits, the Hamilton
workforce was reduced by half in 1998. Similar to the situation in 1989, the
closing of the plant was soon to be announced. In 1999, the J.I. plant in Hamilton
closed due to declining dealer orders.
References:
- International Harvester Annual Reports 1958-1984.
- International Harvester Scrapbook vol. 1, 2, 3. Special Collections, HPL.
- J.I. Case Company Scrapbook vol. 1. Special Collections, HPL.
- Our Heritage Scrapbook vol. 4. Special Collections, HPL.
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