Caterpillar to close London, Ont. locomotive plant

Cameron · February 3, 2012

I saw this coming from a distance. CAT wanted to get the concessions and they didn't, so they will now close the plant and move it.

There is a lot of venom being spewed towards Harper, but I think we have to break this problem down. I find big unions (CUPE, CAW) do not have a relationship with an executive branch of a company. In the London Ont. case, I don't know what was said when EMD was being taken over by CAT. Did the union stop and say, "is this the best idea, what will CAT do, what are they after?".

We have to go back to the laws that govern international take-overs and what provisions are in place to keep jobs in Canada.

Was the EMD plant a poor performer compared to other divisions of CAT?

Was CAT being offered incentives by US states to move the plant or set up a similar operation?

You obviously can't make a company stay in Canada if they want to move.

The tax breaks were offered by the government to companies buying locomotives from EMD as well as a general tax break. This was either not enough to keep them around or as I said before, CAT had other intentions.

Edited February 3, 2012 by Cameron

Boges · February 3, 2012

Article

I saw this coming from a distance. CAT wanted to get the concessions and they didn't, so they will now close the plant and move it.

I'm sure those Union members are thrilled with the CAW. I wonder if Electro-motive has a "Re-deployment" provision. :lol:

Cameron · February 3, 2012

Here is what Ken Lewenza has to say about it.

Lewenza also pointed the finger at government inaction in allowing the closure. He said that 465 workers and another 1,700 workers employed in spin-off jobs are now the casualties of an outdated and dysfunctional Investment Canada Act, that attaches no commitment to Canadian jobs to corporate take-overs.

The Investment Canada Act should maybe looked at to see if more protection to Canadian workers could be offered.

The Stephen Harper government is entirely in the pocket of the corporate elite and has shown absolute disregard for Canadian workers and their families," said Lewenza. "I am disgusted at this government and its indifference towards the suffering of workers and the unemployed. The Harper government was elected by Canadians, but only seems able to represent multi-national corporations."

Now, this is what angers me the most. Being a member of this useless union (their Airlines divsion), they are always beating the war drums. Always. On one had Mr. Lewenza wants changes to the Act, then on the other he berates the Prime Minister. Why would the government ever want to listen to what the CAW has to say if they are going to do nothing but criticize and talk down to them.

I find that far too often it's a one-way street with unions.

Link

The big point about this release, is that the CAW suspected CAT wanted to close down the plant anyways. So what did they actively do to try and avert that decision?

Edited February 3, 2012 by Cameron

fellowtraveller · February 3, 2012

The reality of unions is that they exist to further the interests of their members, by negotiating deals for more money, benefits, job security. The rest of the noble fluff about advancing the cause of the working man or helping build the country is just self serving bullshit. It is business, and big business with serious outcomes.

They go head to head with corporations for the money, and the corps have similar ambitions for their shareholders.

When you play the game, you win some and lose some.

When you play the game poorly, like CAW did here- you lose. Now Lewenza is scrambling for scapegoats.

If Lewenza doubted CATs sincerity and likely outcome, all he had to do was pay just a little bit of attention to what happened with Finning/OEM a few years back in Edmonton. That resulted in zero union jobs, and about double non-union jobs, though the jobs did not leave town in that case.

CAW better look carefully at their operations, because this is just the first, they can expect US carmakers to be moving operations south too.

Topaz · February 3, 2012

Since world leaders and corporations have created this global economy that we now have I don't think ANY worker is safe having a job. The Unions are the target of the companies and they are doing a good job leaving both the US and Canada and going to Third World countries to produce their products, but is the quality there, no. The CAT situation, from I heard on the news was that CAT was told by the state or US Feds. if you want to sell it in the US, you have to make it in the US. So, the Buy US is going strong and we have both a provincial and federal governments, that give money away to US companies without strings attached and so they leave. I hope the workers can get more than one week of severance pay and I'm not sure about any pensions, and many them will be hit with in penalty of CPP at 60 and OAS at 67, if that's the way Harper goes. London unemployment is starting to rise with the Ford plant closed, Windsor has high unemployment as does Chatham-Kent, which has the highest out the three areas, so SW Ontario has been hit hard. If Harris had kept the Auto Pact, then Ontario wouldn't have so many unemployed, so unless Ontario can find a large area of oil, the only help from Ottawa will be EI.

Shady · February 3, 2012

Since world leaders and corporations have created this global economy that we now have I don't think ANY worker is safe having a job.

You're safe, as long as you don't demand artifically high wages and benefits of which can't be supported by the work that you do. It's just common sense. Which I realized hasn't been part of unions for a long time.

Boges · February 3, 2012

You're safe, as long as you don't demand artifically high wages and benefits of which can't be supported by the work that you do. It's just common sense. Which I realized hasn't been part of unions for a long time.

Well even then, if your job can be done cheaper in Southeast Asia your job isn't safe.

It's a tough world out there. The realities of the middle-class are changing and adaptations have to be made.

Scotty · February 3, 2012

My take on this was that Caterpillar bought the London plant with the expressed intention of closing it down. Caterpillar is like Wal-Mart, absolutely opposed to any form of unions and willing to be as cutthroat as it can get away with to eliminate unions and make sure employees tow the company line. Buy buying this company it gets to keep the orders Electro-Motive had, including its longstanding arrangement with Bombardier, and its client base, and eliminates it as competition. It will now shift production to third world countries, and non-union states where it can pay workers less, give them fewer, or no benefits, and fire anyone who doesn't show sufficient enthusiasm.

Caterpillar and Wal-Mart are examples of 21st century capitalism at its most ruthless. These are people who could not care less about the communities they operate in or their own employees. They feel no obligation to anything but the bottom line, and as their stock options and bonuses depend on maximizing profit, they'll do it at all costs. Really, the writing was on the wall the instant Caterpillar bought this company. If the union had actually accepted the demand for a 50% wage cut plus cuts to benefits the company would have come up with something more outrageous to make sure there was no agreement. For some reason, some of these guys in five thousand dollar suits seem to feel the need to justify their actions on some other basis than maximizing their bonuses. So they provoke a fight then throw up their hands in helpless resignation at the union's intransigence, then do what they were going to do anyway.

Edited February 3, 2012 by Scotty

Scotty · February 3, 2012

Well even then, if your job can be done cheaper in Southeast Asia your job isn't safe.

It's a tough world out there. The realities of the middle-class are changing and adaptations have to be made.

Whose job CAN'T be done cheaper in Southeast Asia? People in the service industry, I suppose, but that's about it.

Recall that Nokia plant in Romania which closed down. The workers there, non-union, were only making about $300 a month, but even that was too much, so production of cell phones was moved to Asia. So just what kind of accommodation do you think will help?

I wonder if it's time to re-think the idea that free trade benefits all parties.

LonJowett · February 3, 2012

This is just another example of how Ontario's manufacturing sector is going down quickly and will never recover. The days of jobs with livable wages are over. It's a have-not province now and it's just going to get worse and worse in its reliance on transfer payments.

And there's no signs of any resource-based recovery on the horizon like we have enjoyed in Saskatchewan.

Boges · February 3, 2012

This is just another example of how Ontario's manufacturing sector is going down quickly and will never recover. The days of jobs with livable wages are over. It's a have-not province now and it's just going to get worse and worse in its reliance on transfer payments.

And there's no signs of any resource-based recovery on the horizon like we have enjoyed in Saskatchewan.

What's a livable wage? Were these workers being offered unlivable wages by the CAT?

Saskatchewan has a boom because of natural resources. Too bad God didn't bless Ontario with Potash, Natural Gas or Tar Sands. :rolleyes:

Edited February 3, 2012 by Boges

fellowtraveller · February 3, 2012

The Unions are the target of the companies

and the companies are most definitely targets of unions.

Topaz · February 3, 2012

So now it closed, gone... what are the governments going to do for these workers. First of all, no one knows how long it was take the CAW to get an agree with this company for the workers. I've been told the CAW still can't get anything out of Navistar for the Chatham workers they closed 2-3 years ago. So now they only EI and the lucky ones with a spouse working to make ends meet. The stress level with be unbelievable high in the families. The news said workers are blaming the Feds, the Tory MP's are blaming Toronto. So when corporations have successfully gotten rid of the unions, who will they come after next....highly paid workers, make workers work longer for less pay?

Boges · February 3, 2012

Whose job CAN'T be done cheaper in Southeast Asia? People in the service industry, I suppose, but that's about it.

Recall that Nokia plant in Romania which closed down. The workers there, non-union, were only making about $300 a month, but even that was too much, so production of cell phones was moved to Asia. So just what kind of accommodation do you think will help?

I wonder if it's time to re-think the idea that free trade benefits all parties.

Well I think we've moved beyond the idea that any job is sacrosanct to be outsourced.

My Nokia phone was made in Mexico. Is that any better?

At this point aren't you surprised to find a product that was actually made in Canada or the USA?

Scotty · February 3, 2012

and the companies are most definitely targets of unions.

No, they're not. That's silly. The unions and their need the companies. The companies most certainly do NOT need the unions.

Boges · February 3, 2012

No, they're not. That's silly. The unions and their need the companies. The companies most certainly do NOT need the unions.

Apparently these workers made $34/hour. In London, Ontario that pretty close to rich.

http://www.thestar.com/news/canada/politics/article/1125718--caterpillar-closes-electro-motive-plant-in-london

Companies certainly don't need Unions.

Scotty · February 4, 2012

Apparently these workers made $34/hour. In London, Ontario that pretty close to rich.

http://www.thestar.com/news/canada/politics/article/1125718--caterpillar-closes-electro-motive-plant-in-london

Companies certainly don't need Unions.

The company was demanding they cut that to $16hr. That is not an honest attempt to bring wages to a lower level. Further, the company managed to thrive and be profitable right up until Caterpillar took over. Nor has Caterpillar made any effort to demonstrate that it is incapable of turning a profit under the current wage agreement. And of course, Caterpillar itself is an immensely profitable company which just reported record profits.

Scotty · February 4, 2012

You're safe, as long as you don't demand artifically high wages and benefits of which can't be supported by the work that you do. It's just common sense. Which I realized hasn't been part of unions for a long time.

What do you consider 'artificially high' wages? Would that be wages high enough to buy a house with?

Or more than the $2hr the workers in China get?

Boges · February 4, 2012

And of course, Caterpillar itself is an immensely profitable company which just reported record profits.

Probably by paying their workers $16/hour.

$16/hour in Indiana where I read the work for this plant is going is a livable wage. Check how much real estate is in that state.

However I do understand that a 50% wage cut isn't something ideal for the Union to bend to. I can see that they'd rather lose those jobs than allow their members to work for wages reduced to that extent.

Cameron · February 4, 2012

For all the hot air opposition members are spewing, I'm waiting for a private members bill that would amend the Investment Canada Act.

Lets wait and see.

Wild Bill · February 4, 2012

If Harris had kept the Auto Pact, then Ontario wouldn't have so many unemployed, so unless Ontario can find a large area of oil, the only help from Ottawa will be EI.

Topaz, I thought the Auto Pact was long because of the World Trade Organization declared it illegal.

Here's a link:

http://en.wikipedia.org/wiki/Canada%E2%80%93United_States_Automotive_Products_Agreement

"The Auto Pact was abolished in 2001 after a World Trade Organization ruling declared it illegal, though by that time the North American Free Trade Agreement had effectively superseded it."

Now as far as I knew, Harris did not run the World Trade Organization. I also always thought that NAFTA was a federal agreement between Ottawa and the USA.

Still, I could be all wrong. Wiki too! They've been criticized before for being inaccurate sometimes.

Perhaps you could explain to me in more detail how Harris is at fault.

If things get too tiring you can checkout this youtube clip:

Edited February 4, 2012 by Wild Bill

bush_cheney2004 · February 4, 2012

.... And of course, Caterpillar itself is an immensely profitable company which just reported record profits.

Gee..I wonder how it got that way? Certainly not by paying bloated wages and benefits to coddled union labor.

Workers in Muncie, Indiana (and Brazil) are more than happy to take on this work at much lower wages. Indiana is a Right to Work state now...the UAW can take lower wages or take a hike.

EMD was never a Canadian company.

August1991 · February 4, 2012

The reality of unions is that they exist to further the interests of their members, by negotiating deals for more money, benefits, job security.

FT, you say a hidden truth.

These CAT employees in London are no longer union members - or at least, they no longer pay union dues.

msj · February 4, 2012

What do you consider 'artificially high' wages? Would that be wages high enough to buy a house with?

If companies are going to be paying their employees based on how much real estate is then Canada is in big trouble: Average Canadian Home Price Twice That of U.S.

Boges · February 4, 2012

If companies are going to be paying their employees based on how much real estate is then Canada is in big trouble: Average Canadian Home Price Twice That of U.S.

It's interesting, when you consider how much the prices of products have dropped in recent years. You can make a decent living on a lot less.

It's a lot to have a decent life in the US as opposed to Canada.