AJAX, Ont.  Automodular Corp. has received a short-term contract extension from Ford Motor Company of Canada, which plans to stop outsourcing work to the manufacturing company.

Under the new agreement, announced Monday, Ford is providing certain price and production assurances and Automodular will continue to provide sub-assembly and sequencing services to Ford until Dec. 23, 2014.

Automodular said it expects to close its two remaining factories in Oakville, Ont., after the extension expires. The two plants employ about 525 people.

The company also announced a one-year extension to its labour agreement with Oakville-area workers represented by Unifor, formerly the Canadian Auto Workers unio. The current contract had been set to expire June 30, 2014.

In August, the company announced it had booked a $4-million charge related to the expected closure and said it expected the total cost would be $8 million.

It announced on Monday that Ford has agreed to fund some of the closure costs.