Surprise closure of Ericsson’s Vaudreuil-Dorion facility after less than a year
YLJ FILE PHOTO/JOHN JANTAK
Vaudreuil-Dorion Mayor Guy Pilon said he’s confident another player in the telecommunications industry will be interested in the 40,000 square-metre facility, shown here under construction in 2014, and that the departure will not result in a taxation loss for the city.
Only 10 months after the ribbon-cutting and inauguration of Ericsson’s $1.3 billion global Information and Communication Technology (ICT) in Vaudreuil-Dorion, the telecommunications giant announced it was closing the specialized facility leading to the loss of approximately 50 jobs.
“I’m very disappointed with the situation,” read a communiqué issued by Mayor Guy Pilon October 20. After speaking with Ericsson Canada President and CEO Mark Henderson, Pilon said he’s confident another organization will express interest in occupying a data centre of this size.
Pilon said there was never a guarantee that the Swedish-based organization would commit to a minimum amount of time in the city.
“The only guarantee was a tax reduction over a five-year period,” Pilon said. “For the first $100 million (taxation on the value of the building) there was no tax, for the rest, around $150 million, there was a reduction of 50 per cent decreasing over five years.” Even with the deal in place, Pilon said the town recouped $1.2 million in taxation revenue last year. With the announcement that Ericsson is leaving, the tax reduction guarantee will be nullified and the company must now pay the full tax rate until the structure is sold to a new owner.
As reported in Your Local Journal in June 2013, the 40,000 square-metre research and development complex was the largest investment ever made in Quebec’s high-tech sector, and was one of three facilities Ericsson built at the same time, the other two in Sweden.
“An (interested group) has already contacted Ericsson,” said Pilon of the highly-secured facility located in the industrial sector north of Highway 40 and west of Saint-Charles Avenue. Pilon would not name the company or divulge if they were in the telecommunications field.
When asked why Ericsson was leaving so soon after opening the facility, Pilon said, “Bad planning,” citing competition and changes in technology that resulted in much less than expected growth.
Though the closure will result in job losses, very few of them were Vaudreuil-Dorion residents. Pilon said given the highly specialized nature of the jobs, the employees are not likely to be unemployed for an extended period.
The company used to rent facilities on Decarie Boulevard but had recently located its 1200 employees to Pointe-Claire.
Pilon described the Vaudreuil-Dorion facility as a Tier III level building conforming to established building codes set by the ANSI (American National Standards Institute). The highest code is Tier IV.
“It meets standards for issues including environmental water recuperation and electrical requirements,” said Pilon adding it has the capacity to be used as a data collection centre for corporations comparatively sized to retail giant Amazon. “That’s just an example. It could be Google, it could be government, or it could be the army. There’s someone in the world who needs a building like that, that’s for sure.”
“We’re more surprised than sad,” said Pilon. “It’s a $3 billion investment in the world and they’re closing it after only 10 months.”