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Caterpillar Trying to Cut Wags & Benefits by 50% when Profitable


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the 'registered gun to the head', in this case, should have been imposed Harper Conservative guarantees, ala the Canada Investment Act decision... quite clearly, in the overall scheme of it, the difference in wages/benefits is mice-nuts to Caterpillar's bottom line.

That's not your call....CAT is a very profitable corporation that doesn't have to bow down to pampered union labor, not even in Canada. Go back and read WB's post...CAT has a long history of "labor strife" with spoiled union labor, and didn't get where it is by caving in to unionized labor "demands".

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thanks for your interesting personal insights; however, if one takes Caterpillar at it's word, they would carry on in Canada... just so long as the workers are prepared to slash their existing wages/benefits to match those of Caterpillar's like American workforce. So, 'pulling the plug' is a relative term. I recently read an article that showcased how U.S. corporations were now beginning to pull-back "some" offshore manufacturing... in several cited cases, this was expansion to existing U.S. factories that had earlier been partially outsourced overseas. In the cited cases, wage/benefit provisions were agreed to by labour such that new employees were to receive less than half the wage and reduced benefits of existing U.S. employees doing the same work, in the same plants... for the U.S. unions it seems to be more about getting the jobs back then concerns over wage/benefit parity - at least for now. Caterpillar seems to be trying for it's own wrinkle on this theme by "forcing" existing London workers to lower wages/benefits to the now considerably lowered U.S. wages/benefits.

Oh, I think you're quite correct Waldo when you say that this is a move to force concessions from the Canadian workers. We've seen this before, after all.

I just wanted to point out that when you're working for a plant that is a dinosaur and should be shut down anyway a worker doesn't have a lot of clout...

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....I just wanted to point out that when you're working for a plant that is a dinosaur and should be shut down anyway a worker doesn't have a lot of clout...

Right...Ford just closed a light truck (Ranger) plant in St. Paul that was in continuous production for over 80 years. It was not economical to retool for another vehicle, and it was closed down after several years notice. Union employees were given the opportunity to transfer or hit the road (severance). That's all ya get folks, and a lot of people would be happy to get that.

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Don't be so narrow and simplistic...decades old and now unsustainable wages and benefits are off the table. If the "long serving" employees don't like it, they can go be "long serving" someplace else. Nobody is holding a registered gun to their heads.

The new owners get do do what they want within labor law limits....look up the meaning of owner.

Exsctly. That's what I don't understand from these people. It's almost as though they have no understanding that businesses are private property. For some reason they view them and the jobs they provide as public property.

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Exsctly. That's what I don't understand from these people. It's almost as though they have no understanding that businesses are private property. For some reason they view them and the jobs they provide as public property.

Agreed...I don't know where that comes from. It sounds like a whining divorcee who claims he/she gave their ex the best years of their life. Entitlement mentality....

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Oh, I think you're quite correct Waldo when you say that this is a move to force concessions from the Canadian workers. We've seen this before, after all.

I just wanted to point out that when you're working for a plant that is a dinosaur and should be shut down anyway a worker doesn't have a lot of clout...

you've seen the plant first-hand... that counts; however, I'm in turn confused about the many claims touting the technological advantage EM held over Caterpillar... that one of the key reasons for the purchase was to allow Caterpillar to reap the rewards of the technology gain (and, of course, shutter one of its key competitors).

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you've seen the plant first-hand... that counts; however, I'm in turn confused about the many claims touting the technological advantage EM held over Caterpillar... that one of the key reasons for the purchase was to allow Caterpillar to reap the rewards of the technology gain (and, of course, shutter one of its key competitors).
So you are saying Canadian enterpreneurs should not be allowed to build up a company and sell to the highest bidder? You are saying that the owners of the technology should be forced to keep they capital tied up in a business in order to "protect the jobs" of the workers? A perverse way of looking at business and a good way to ensure that there are fewer Canadian startups in the future.
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So you are saying Canadian enterpreneurs should not be allowed to build up a company and sell to the highest bidder? You are saying that the owners of the technology should be forced to keep they capital tied up in a business in order to "protect the jobs" of the workers? A perverse way of looking at business and a good way to ensure that there are fewer Canadian startups in the future.

And what you're arguing for is a good way to ensure that there are less and less jobs for Canadians in the future...

Uncle Sam loves ignorance...

Buy Canadian companies...shut them down and move production to the U.S. to give Americans jobs...

You think that's a good idea?

I think it's traitorous for a Canadian to support that.

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And what you're arguing for is a good way to ensure that there are less and less jobs for Canadians in the future...

Uncle Sam loves ignorance...

Buy Canadian companies...shut them down and move production to the U.S. to give Americans jobs...

You think that's a good idea?

I think it's traitorous for a Canadian to support that.

Google US Steel federal law suit settlement. Another example to prove your point.

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...Buy Canadian companies...shut them down and move production to the U.S. to give Americans jobs...

You think that's a good idea?

I think it's traitorous for a Canadian to support that.

Yes..it is "traitorous" that Canada lacks sufficient domestic capital to sustain such industries without foreign investment. But WOW, such a great banking system, eh?

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you've seen the plant first-hand... that counts; however, I'm in turn confused about the many claims touting the technological advantage EM held over Caterpillar... that one of the key reasons for the purchase was to allow Caterpillar to reap the rewards of the technology gain (and, of course, shutter one of its key competitors).

Well, who says that EM is modern and productive in the States? When I worked for Westinghouse the Canadian operations were the first to be closed down. Still, that didn't mean that things were growing in the US! It was just that they closed Canadian plants first!

Once there were no more plants to sell or close in Canada the same events began to accelerate down south.

We should be patient and wait for a few years to see what happens. A large dinosaur can take a long time to die!

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you've seen the plant first-hand... that counts; however, I'm in turn confused about the many claims touting the technological advantage EM held over Caterpillar... that one of the key reasons for the purchase was to allow Caterpillar to reap the rewards of the technology gain (and, of course, shutter one of its key competitors).

So you are saying Canadian enterpreneurs should not be allowed to build up a company and sell to the highest bidder? You are saying that the owners of the technology should be forced to keep they capital tied up in a business in order to "protect the jobs" of the workers? A perverse way of looking at business and a good way to ensure that there are fewer Canadian startups in the future.

no - what's perverse is the leap you've taken... one that has nothing to do with this scenario being discussed. EM Canada was no Canadian entrepreneurial start-up - it's a division (historically across multiple companies), that's been established and continued through multiple Investment Canada Act decisions, relative to foreign ownership. In this particular case, consensus reviews I read state Caterpillar sought out the technological advantage U.S./Canada Electro-Motive held. It's also not surprising to read the MLW wannabe 1%er's all rallying to the corporate cause in support of the rights of Caterpillar to cut existing EM workers wages/benefits by over 50%. Apparently, none of these same wannabe 1%'s think the Investment Canada Act could have been leveraged by Harper Conservatives to attempt to protect EM Canada workers wages/benefits - go figure!

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Oh no...if the EM plant closes, it will effect the local Timmy's too!!! The capitalist bastards must be stopped....Captain, we can't take much more....it's gonna blow!

thanks for posting the video - in any case, after the worker being interviewed speaks to the impact of closing the plant on 650 workers, on 200+ management, on local suppliers... he also offers a somewhat anecdotal reference to an example of affecting adjacent retailers. It's quite telling to see how your framed your drivel comment.

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The truth

Electro-Motive: Unplugged

Posted 1/4/2012 5:02:00 PM

It’s not often a labor dispute in London, Ontario draws attention from the Wall Street Journal, the New York Times and other international media outlets. Then again, it’s not often an employer asks its workforce to accept an immediate 55% cut in wages, along with numerous rollbacks in benefits and pensions.

That’s what’s happening at Electro-Motive where more than 500 London workers were locked out on January 1st. Thousands of others, who supply the company with parts, are left in limbo wondering how long this work stoppage will last – or, if the company might make good on implied threats to close the facility and move all work to a plant in the U.S.

London’s unemployment rate is currently one of the highest among major Canadian cities, something not lost on those who argue Electro-Motive workers should be happy they even have a job, regardless of what it pays. If workers are to be satisfied with simply having a job, why shouldn’t companies be satisfied with simply breaking even?

Electro-Motive’s parent company isn’t, but Electro-Motive’s employees are.

The company recently posted a record $1.14-billion dollar profit - not revenue, but profit - in its latest quarter. Despite this unprecedented success, Electro-Motive workers (perhaps in recognition of the economy?) are not demanding a 44% increase in wages. They’re not holding out for a 4% increase, or even a 0.4% hike. They’re willing to accept a wage freeze.

Caterpillar, on the other hand, wants to cut wages from $35 an hour to $16.50.

The company says, at least publicly, the reason for such a dramatic rollback is the time honored “need to remain competitive.” Who are they competing against? Their main competitor, General Electric, agreed in 2010 to a four-year deal that pays most of its American workers $30 an hour plus benefits.

In reality, Caterpillar is competing against itself.

Their workers in Muncie, Indiana currently build locomotives for $18 an hour. Ignore the fact the minimum wage in the United States is lower, the unemployment rate higher, the pool of highly skilled workers more shallow. Forget all of that. The company sees a chance to further increase record profits, no matter how marginally or how recklessly, and it’s issued a take it or leave it offer:

Give up half your salary, or else…

Give up many of your benefits, or else…

Give up a portion of your pension, or else…

Or else, what?

The CAW, to its credit, seems willing to find out.

In so doing, they’ve won respect and support from many who usually have no time for unions. They’ve also been chastised by others who say they’re being greedy, foolish, or downright stupid.

None of those labels apply, and certainly not the latter.

These are not high-school drop outs, nor juvenile delinquents. The vast majority of these workers went to College for years to become skilled tradesmen, others went to University to become engineers. It’s true, in a city with 9.8% unemployment, there are many who would gladly work for $16.50 an hour. Unfortunately, those same people don’t have the necessary skills required to perform these jobs. Caterpillar executives know this first hand. It’s why they’ve only been able to find 180 individuals with the necessary qualifications to work at their plant in Muncie, Indiana. They were hoping to have hired three times that number by now.

These are not jobs anyone can walk in off the street and perform. Oddly enough, those who can – at least in London – remain on the streets, collecting a few hundred dollars a week in strike pay. It hurts their families, but it also hurts our economy. They have less money to spend on services your company provides, or things you produce.

This impacts everyone.

The impact will be even greater if more than 500 workers give back half their salaries with no questions asked. The millions in ‘savings’ won’t be spent in our community. The money will vanish into the pockets of Caterpillar executives - none of whom live, work, or play in London, Ontario.

Electro-Motive workers have refused to blink.

It’s time the rest of us opened our eyes.

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thanks for posting the video - in any case, after the worker being interviewed speaks to the impact of closing the plant on 650 workers, on 200+ management, on local suppliers... he also offers a somewhat anecdotal reference to an example of affecting adjacent retailers. It's quite telling to see how your framed your drivel comment.

No problem...I like to help out in any way I can. My "drivel comment" was for those of us who are old enough to recognize the remarkable similarity to the plaintiff wail of Chief Engineer Scott (Scotty) from the video. As for the larger issue, do you really think that CAT would be or should be responsible for all the impacted businesses in the area? If so, then you have no idea what CAT has done in the past (see Peoria, Illinois).

Good luck CAW....

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The company recently posted a record $1.14-billion dollar profit - not revenue, but profit - in its latest quarter.

yup... damn those London EM workers for trying to keep the corporateMan down! Of course, note the latest wannabe 1%er rushing in - trust it mixes well with his other yankee wannabe-self.

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Is it me? I just can't get worked up over this caterpiller thing. Mayber if they were fuzzier...

Back in the fall a neigbour tried to tell me that it was going to be a cold winter 'cuz the fuzz on some caterpillars was thicker.

I was back at my BBQ before it hit me - caterpillars aren't alive in the winter! :lol:

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Thank you, WB. A welcome voice of reason in an otherwise empty-minded thread (despite B-C's attempts to respond).

Frankly, I'm surprised they stayed in business this long! This plant, along with virtually all Westinghouse, General Electric and other "old names" was woefully mired in the past. They were stuck in 1965!

...

The only reason they lasted as long as they did was because there was a clause in the Defence Agreements that said the companies had to keep some capacity in Canada. So they would give their Canadian branches the older, becoming obsolete stuff. In the 90's when I was there GM was beginning to face hard competition on locomotive engines from China. I would imagine that has increased, not gone away!

The simple fact is that Canada (and the US) have lost more jobs to technological change in the past 30 years or so than we have to "out-sourcing".

Reading the posts of Leftists on this board in this thread (Waldo, MCC, Rick, Waldo, Topaz, punked), I have the impression that if they had lived in 1900, they would have defended the right of the Horse-Breeders Union to forbid the sale of these new-fangled (imported) automobiles. Imagine if such people had won the argument. Internet? We would be having this discussion by pony express!

When we discover new technology, or we open to trade, the effect is the same. We have the opportunity to do something at lower cost, with fewer resources. Society is better off.

It is truly sad that the mainstream Left has not embraced this obvious point.

Edited by August1991
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yup... damn those London EM workers for trying to keep the corporateMan down! Of course, note the latest wannabe 1%er rushing in - trust it mixes well with his other yankee wannabe-self.

Why should CAT shareholders have to subsidize such inflated wages and benefits for a few hundred pampered union workers? Is profit sharing in their contract? Did union workers voluntarily take a cut in pay during the recession? CAT's corporate profits come from many sales channels, not some run down plant in London, Ontario.

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