Caterpillar to close London, Ont. locomotive plant

[mentalfloss]

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

Caterpillar has been around for a long time.

The fact that it is so profitable in light of these "bloated wages" just goes to show that they aren't bloated at all.

But now, because of Caterpillar's stubbornness, we've lost 450 manufacturing jobs and all those tax breaks the corporation was granted are going to be used to fuel their business in the U.S. So, basically, the taxpayer gets screwed because corporate tax cuts had no influence whatsoever on Caterpillar's decision.

Edited February 4, 2012 by mentalfloss

[Scotty]

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.

Ah, the joy in Republican circles, the rubbing of hands in glee at the prospect of the America they're building. All the rich will live in massive, walled fortresses. All the rest will live a gray existence, working from dusk to dawn and going back to their tiny shacks while the corporations pump untaxed money into the pockets of the rich. "Push those wages down more, boys! They're still half again as high as the Chinese!"

[Scotty]

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.

Perhaps we too will learn the error of our ways and someday enjoy the great living of the people of Mississippi, and Arkansas, and other great 'right to work' states.

Heck, medical care? Pensions? Livable wages? Who needs em! They just get in the way of profit!

[cybercoma]

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

Many people just lost their jobs and you're laughing about it? I think you need to take a hard look at your value system.

[bush_cheney2004]

...But now, because of Caterpillar's stubbornness, we've lost 450 manufacturing jobs and all those tax breaks the corporation was granted are going to be used to fuel their business in the U.S. So, basically, the taxpayer gets screwed because corporate tax cuts had no influence whatsoever on Caterpillar's decision.

Stupid is as stupid does. I say again...EMD was never a Canadian company.

[bush_cheney2004]

Many people just lost their jobs and you're laughing about it? I think you need to take a hard look at your value system.

I think they needed to start looking for new jobs instead of whining about it.

[Boges]

Many people just lost their jobs and you're laughing about it? I think you need to take a hard look at your value system.

Actually I'm laughing at the idea of a Re-deployment provision. (see the Toronto Labour situation)

I made that post before I realized what was being proposed. You can't expect people making $34/hour which I do think is a bloated wage to go down to $16. I don't blame the union for not bending to these demands.

It's clear CAT's motive was to close the plant in the first place.

[bush_cheney2004]

...It's clear CAT's motive was to close the plant in the first place.

Right...so why so much CAW drama? Plants open and close all the time. Some union members become insulated from reality by their contracts.

[PIK]

Actually I'm laughing at the idea of a Re-deployment provision. (see the Toronto Labour situation)

I made that post before I realized what was being proposed. You can't expect people making $34/hour which I do think is a bloated wage to go down to $16. I don't blame the union for not bending to these demands.

It's clear CAT's motive was to close the plant in the first place.

The unions knew that when they vote against the contract, is was over. So now instead of making 16.50 a hour, untill they found something else, they are now making 0.

[Boges]

The unions knew that when they vote against the contract, is was over. So now instead of making 16.50 a hour, untill they found something else, they are now making 0.

There's a difference between giving back a few dollars an hour and a few of the generous bennies you were used to and cutting your salary in half. The morale for even the best workers would have been horrible.

[punked]

The unions knew that when they vote against the contract, is was over. So now instead of making 16.50 a hour, untill they found something else, they are now making 0.

Wrong they will get EI and make more then they would have if they took salary cut, until they all find new jobs which pay more then Caterpillar was going to pay them. You only wish we lived in a system where if an employer decides to leave the employees starve.

[Boges]

Wrong they will get EI and make more then they would have if they took salary cut, until they all find new jobs which pay more then Caterpillar was going to pay them. You only wish we lived in a system where if an employer decides to leave the employees starve.

One would hope they'll get a decent package as well.

I seriously doubt that, unless they have some specialized trade skills, they'd get similar paying jobs. In Ontario anyway.

[waldo]

The unions knew that when they vote against the contract, is was over. So now instead of making 16.50 a hour, untill they found something else, they are now making 0.

rubbish! The "offer" to cut wages... and benefits... in half was an effective move by Caterpillar to close the plant.

[waldo]

Right...so why so much CAW drama? Plants open and close all the time. Some union members become insulated from reality by their contracts.

what you call drama is back-dropped against the failed ICA handling by Harper Conservatives. Caterpillar could have saved the real drama, it's drama, by refusing to accept ICA worker protection constraints upon it's purchase of the plant... they could have shut the plant down right then and there. Of course, that would have meant Harper Conservatives actually stepped up for workers protection... as opposed to giving Caterpillar tax breaks and a direct $5 million subsidy.

alternatively, the prevailing view of many is that to capture the ultimate sale, the equity firms selling to Caterpillar would simply have absorbed the relatively "mice nuts" costs impact that ICA worker protection would have meant. Caterpillar would have proceeded with the purchase, equity firms would have absorbed the additional costs associated with an ICA decision that included worker protection measures, and London would have a plant and London workers would have jobs with decent representative wages/benefits. Yes, thank you Harper Conservatives... thank you very much.

[scribblet]

Article

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?".

------------------------------------------------------------.

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.

Agree about the venom being spewed towards Harper when in fact, the tax breaks where on industrial capital investment which would affect numerous companies, not just EMD, how would the gov't single out and exempt one company, or demand breaks be given back !! The '$5 million they go on about was a tax break for purchasers, not EMD itself, so for those demanding the money be given back, how would they do that, under what law, what legislation. And it really is a provincial problem, not federal.

Caterpillar is moving because the U.S. is replacing their rail engines and their American First policy requires that they be built in the U.S., plus there are tax incentives from the State which gave Caterpillar the motivation to move. Did Caterpillar know this when they bought EMD, not sure but I think the new policy came after.

[MiddleClassCentrist]

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.

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.

Solution: Force the sale of the plant, not the closure

It's ridiculous that we allow corporations to operate on a scorched earth policy, closing plants rather than risking more competition and innovation.

[MiddleClassCentrist]

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.

GE Workers make similar for the same job.

Just saying

[MiddleClassCentrist]

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.

GE, Caterpillar's main competitor in the field, pay's it's workers similar wages (average $30/hour) for the same tasks.

But, continue on with your quest to destroy the working middle class. You are just a wannabe 1% and it'll come around to you eventually.

[MiddleClassCentrist]

I think they needed to start looking for new jobs instead of whining about it.

I didn't know that you were incapable of performing two tasks at once.

The more you know.

[Topaz]

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:

My answer that Harris cancelled it because, I remember it being mentioned on the new back when Harris was Premier and it said he let the Auto Pact go and did not renew it. IF I'm wrong blame the news.

[Topaz]

There's a couple thing you guys aren't concerning. One, $30 per hour isn't that much money these days. Consider a mortgage, or even rent which could be as high as 600-1000.00 monthly, all the other bills for keeping a home, plus education fees for the kids. I think many of these workers are in the age bracket of 45-59. Some of them may NOT find other jobs, some will lose their homes and families, just like other workers in Ontario and the forestry. EI may get them about 1600 monthly, maybe pay rent or mortgage and some bills but nothing for food and then the Food Banks will get hit and in London they are already have more than 3500 families in need now. Why do people always come down on someone who makes $30.00, when we should try to bring everyone up to a better way of life. I can understand businesses doing it, but other workers, this could only be jealousy on their part. Union bashing is the normal for many people who Don't belong to one, you don't know what you are talking about half the time. There's another US company in London in talks right now and talk around the coffee shops is they will be the next one to leave Canada and take the jobs back to the US for their people just like CAT has done.

[Scotty]

Why do people always come down on someone who makes $30.00, when we should try to bring everyone up to a better way of life. I can understand businesses doing it, but other workers, this could only be jealousy on their part. Union bashing is the normal for many people who Don't belong to one, you don't know what you are talking about half the time. There's another US company in London in talks right now and talk around the coffee shops is they will be the next one to leave Canada and take the jobs back to the US for their people just like CAT has done.

I think it generally is jealousy and resentment. $30hr is about $60,000 a year. That's a decent living but not exactly rich. City bus drivers make a lot more than that. But you've got a whole lot of people who resent not making much, and instead of wishing they had more skills or had a better job they resent the workers who are better compensated. We see this all the time in the campaigning corporate America is doing on behalf of 'right to work' which is such a hypocritical term. Corporate America bribes politicians (mostly Republicans) to bring up these bills, and campaigns for them by trying to tell everyone that those making more are 'greedy' and somehow responsible in some way for those other people getting less. Those 'greedy' unionsts are responsible for there not being more jobs too! It's all their fault! Nothing to do with corporate America shifting work overseas, of course.

Such is the poor nature of education and the poor nature of the news 'infotainment' business that their message seems to be working, especially in the south and midwest, where you've got a lot of hicks, a lot of ignorant, gullible people.

Still, it's not like we don't see the same attitude here, especially towards public service workers.

Edited February 5, 2012 by Scotty

[waldo]

Agree about the venom being spewed towards Harper when in fact, the tax breaks where on industrial capital investment which would affect numerous companies, not just EMD, how would the gov't single out and exempt one company, or demand breaks be given back !! The '$5 million they go on about was a tax break for purchasers, not EMD itself, so for those demanding the money be given back, how would they do that, under what law, what legislation. And it really is a provincial problem, not federal.

Caterpillar is moving because the U.S. is replacing their rail engines and their American First policy requires that they be built in the U.S., plus there are tax incentives from the State which gave Caterpillar the motivation to move. Did Caterpillar know this when they bought EMD, not sure but I think the new policy came after.

Harper apologists aside..... no, that particular $5 million was a direct subsidy/break to Electro-Motive as announced by Harper on the floor of the London plant... this was over and above the other wider tax breaks.

that "American First" policy talking point is also false... there is no requires element, nothing forcing the policy on Caterpillar... it is to Cat's advantage to do so, but there is no requirement. It's simply another example that shows the corporate greed element at play.

[bush_cheney2004]

... The '$5 million they go on about was a tax break for purchasers, not EMD itself, so for those demanding the money be given back, how would they do that, under what law, what legislation. And it really is a provincial problem, not federal.

Indeed...that makes the measely $5 million even more so. Maybe it is worth more in an alternate reality.

Caterpillar is moving because the U.S. is replacing their rail engines and their American First policy requires that they be built in the U.S., plus there are tax incentives from the State which gave Caterpillar the motivation to move. Did Caterpillar know this when they bought EMD, not sure but I think the new policy came after.

Agreed..it is a no brainer. EMD was never a Canadian company.

[bush_cheney2004]

...that "American First" policy talking point is also false... there is no requires element, nothing forcing the policy on Caterpillar... it is to Cat's advantage to do so, but there is no requirement. It's simply another example that shows the corporate greed element at play.

That's right....it is CAT's prerogative...they are very profitable right now and got that way by kicking union ass in "the states" too. Why the hell would it be any different in Canada?

American corporations do not owe Canadians cushy-for-life jobs, union or otherwise. Don't like it? Grow your own.