Ontario Caterpillar Plant Shut Down After Cuts

[AusKanada]

Following a rejection of accepting a 50% wage cut, Caterpillar has closed one of his Ontario plants, bringing forth a debate whether corporate tax cuts should be re-worked (e.g., like Layton via a hiring credit insisted in 2008) or is working fine as is. Your take?

[ron Young]

The Caterpiller coprporation like most other big corporations put money and profits above and before human life. With that knowledge I support nothing they do to those ends. If it were up to me I'd make them pay dearly for every life or home that has been destroyed with their products before they could even operate in this country.

[Moonbox]

The Caterpiller coprporation like most other big corporations put money and profits above and before human life.

Well I'm not how many people out there invest their life savings into starting/growing a company so that they can provide well-paying jobs for people they don't know. I think it's pretty fair for them to expect to want to make money, although in this case it doesn't seem like Caterpillar was negotiating in good faith. I mean...how many people out there would accept a 50% wage cut?

Fact of the matter is that in a world of global trade, unions supporting low-skill monkey work just aren't going to survive. The CAW in particular has had its head in the sand for the last 20 years and still hasn't figured out how precarious their position is.

[Topaz]

As I said before, the news reported that CAT had to come back to the US to sell their wares, and to proof that, they are already had job fair to hire people in Peoria Ill., which really needs the jobs and I understand that. The only way out for CAT was to offer a really crazy offer they they knew would be turned down, just like Navistar did to the Chatham-Kent workers 3 years ago. and those workers are still waiting for a closure agreement and some may die and never see one. The problem has become when the governments let one US company leave after getting grants or loans then other US companies saw the way to exit and are doing so. In my view, Ontario is still in a recession and as manfacturing companies leave, its only a matter of time before we have a very open depression in this province. Workers in C-K, travel to either Windsor or London to find jobs, and crime has soared with Break ins, domestic disputes, drunk driving the usual when there's no work. Food Bank is up and so is welfare. London being a much larger city, but with Ford gone, unemployment is going up there too. Really sad for anyone who has to experience this and no help by any level of government, they just blame each other as usual.

[bush_cheney2004]

....If it were up to me I'd make them pay dearly for every life or home that has been destroyed with their products before they could even operate in this country.

Does CAT get any offsets for the roads and home developments that their products have helped to create ?

[scribblet]

I don't see how a change of tax laws that effects many companies could be tied to creating jobs etc. If it's an actual cash bailout, no problem, there should be strings attached.

I saw a comment somewhere that maybe the gov't could put a tariff on Caterpillar's goods making them unacceptable to buyers here.

[bush_cheney2004]

...I saw a comment somewhere that maybe the gov't could put a tariff on Caterpillar's goods making them unacceptable to buyers here.

Even if such a move survived a WTO challenge, the repercussions would be far greater. Canada cannot win a trade war with the United States. Alberta is not going to give up CAT heavy equipment just because union jobs are at risk in Ontario.

[Shady]

Anybody that suggests tax cuts should be attached to hiring has absolutely no clue about economics and running a business. It's sad that our education system has failed so many people in that regard.

[Sandy MacNab]

Even if such a move survived a WTO challenge, the repercussions would be far greater. Canada cannot win a trade war with the United States. Alberta is not going to give up CAT heavy equipment just because union jobs are at risk in Ontario.

Do Ontario's unions give a crap about Alberta? (that was a rhetorical qn)

[YEGmann]

As I said before, the news reported that CAT had to come back to the US to sell their wares, and to proof that, they are already had job fair to hire people in Peoria Ill., which really needs the jobs and I understand that. The only way out for CAT was to offer a really crazy offer they they knew would be turned down, just like Navistar did to the Chatham-Kent workers 3 years ago. and those workers are still waiting for a closure agreement and some may die and never see one.

In reality, the CAT offered EMD workers higher wages than in the US plant where they are moving to.

The problem has become when the governments let one US company leave after getting grants or loans...

It's lefty BS. EMD never received any CDN taxpayer's money.

[Cameron]

This entire thread is irrelevant. CAT didn't want to keep the plant open. This was a move to close it down. This whole ordeal goes back to the Investment Canada Act.

So, stop wasting your breath on tax breaks and write your MP about making changes to the ICA.

[bush_cheney2004]

...So, stop wasting your breath on tax breaks and write your MP about making changes to the ICA.

Agreed...did they think CAT/EMD was going to keep a locomotive plant with expensive CAW labor in Ontario for a measley $5 million dollars?

[Cameron]

A good background article by Andrew Coyne Article

Points to ponder from the article:

1 - EMD is not a Canadian company, and never was. Caterpillar bought it from a pair of American private equity firms in 2010; they bought it from General Motors in 2005, who bought it from its Ohio-based founders in 1930. Since 1935 it has been headquartered in La Grange, Illinois. The London branch plant was opened in 1950.

2 - Caterpillar didn’t buy the London plant. It bought the whole company, including its La Grange operations, which is where EMD does its design and engineering work, as well as making parts. Incidentally, as the economist Michael Moffatt points out, GM moved all final assembly work to London from La Grange shortly after the Free Trade Agreement went into effect. The jobs we’re worried about losing to the States are jobs we took from them.

3 - EMD never received any subsidies from the federal government; certainly not since Caterpillar bought it. The Harper visit to which Olive refers was to promote a tax break for the purchasers of locomotives, not the manufacturers. The visit occurred in 2008, two years before the Caterpillar purchase.

And to amend my past argument in regards to the Investment Canada Act: It’s not clear how the foreign investment laws could have been invoked to cover a purchase of an American company by another American company

Interesting points to ponder going forward.

Here is EMD's final offer to their employees: Link

Their wages were in four categories: $16.50/18.00/20.00/22.00 and skilled trades were at $34.00

So they were not ALL going to be reduced to $16/hour.

Edited February 7, 2012 by Cameron

[bush_cheney2004]

...And to amend my past argument in regards to the Investment Canada Act: It’s not clear how the foreign investment laws could have been invoked to cover a purchase of an American company by another American company

Bravo! Surely the long knives will now come out to assail such impeccable logic.

[Cameron]

Wages before (and after)

General/assembly all products: $34.64 ($18)

Machinist/production/ special: $34.98 ($18)

Burning/hand and machine: $34.84 ($18)

Machinist/special setup: $36.17 ($20)

Fabrication machine operator/special: $34.84 ($18)

Painter, locomotive: $34.98 ($18)

Welder, locomotive: $34.98 ($20)

Governor and injector repair and inspection: $34.98 ($18)

Inspection process layout: $37.96 ($20)

Quality audit, all vehicles: $35.28 ($20)

Test and repair/locomotive: $37.78 ($22)

Crane operator: $34.98 ($18)

Crane operator mobile (licensed): $35.25 ($22)

Material control utility: $34.85 ($18)

Oiler: $34.75 ($18)

Cleaning, production parts: $34.47 ($16.50)

Machine operator, tool room: $34.62 ($16.50)

Labourer: $34.62 ($16.50)

Stationary engineer, second class: $40.70 ($34)

Plumber: $40.70 ($34)

Electrician: $41.01 ($34)

Industrial truck repair/gas, electrical and diesel: $41.01 ($34)

Machine repair machinist: $40.89 ($34)

Welder, tool and die maintenance: $40.93 ($34)

I'll admit some of those cuts are brutal. Very brutal. But there was an article from Muncie Indiana that stated 4000 people showed up for about 450 jobs that were being offered (where the EMD plan it being moved to)

Source Link

Edited February 7, 2012 by Cameron

[scribblet]

In reality, the CAT offered EMD workers higher wages than in the US plant where they are moving to.

It's lefty BS. EMD never received any CDN taxpayer's money.

Exactly, and the 5 million was a tax break for purchasers not the company.

[Jerry J. Fortin]

I hope the former employees occupy the place in protest. They should lay claim to the assets as severance, let the company fold up, roll over and die. Give the corporation the tax breaks they want and say good riddance. Let the employees run the place and earn their pay and keep.

This can be turned into a blessing in disguise. Call it designed destiny, but when you act in the interests of other, karma applies!

[bush_cheney2004]

I hope the former employees occupy the place in protest. They should lay claim to the assets as severance, let the company fold up, roll over and die. Give the corporation the tax breaks they want and say good riddance. Let the employees run the place and earn their pay and keep.

Huh? Not sure what you mean...the employees cannot fund plant operations by themselves. It is private property and all current labor contracts have been honoured to date. Canada is not Cuba...yet.

EMD was never a Canadian company.

[AusKanada]

I think hiring tax credits, or small business tax incentives are the best idea to encourage job growth quickly. Corporations like Caterpillar are modern day pirates, they'll sell their goods to Canadians no matter what, but they won't think twice before closing down their plants here when they can make more money in the U.S., or Mexico or wherever.

It would be nice if the "Made in Canada" label actually meant the good was produced in Canada, not that just 51% of the costs of production were paid in Canada. That way consumers could actually decide to shop for Canadian goods if they so wish.

[fellowtraveller]

Andrew Coyne with some factoids:

link

It’s a compelling story — foreigners buy “our” plant, steal “our” technology, and all with our money! Except:

EMD is not a Canadian company, and never was. Caterpillar bought it from a pair of American private equity firms in 2010; they bought it from General Motors in 2005, who bought it from its Ohio-based founders in 1930. Since 1935 it has been headquartered in La Grange, Illinois. The London branch plant was opened in 1950.

Caterpillar didn’t buy the London plant. It bought the whole company, including its La Grange operations, which is where EMD does its design and engineering work, as well as making parts. It seems unlikely it would have stashed its most valuable intellectual property at a far-off final assembly plant. (Incidentally, as the economist Michael Moffatt points out, GM moved all final assembly work to London from La Grange shortly after the Free Trade Agreement went into effect. The jobs we’re worried about losing to the States are jobs we took from them.)

Even if it were a Canadian company, and even if it possessed a Valhallah of patents, it still wouldn’t belong to “us.” It would belong to them: its Canadian owners, who shelled out good money for it, presumably in anticipation of selling it one day. Caterpillar didn’t steal the company: it paid for it. If its proprietary technology had any value, its previous owners would be just as capable of realizing this, I’m guessing, as any Toronto columnist, and of charging accordingly.

EMD never received any subsidies from the federal government; certainly not since Caterpillar bought it. Indeed, looking through the hundreds of pages of “grants and contribution” in the Public Accounts, it may be the only company in the country that didn’t. The Harper visit to which Olive refers was to promote a tax break for the purchasers of locomotives, not the manufacturers. The visit occurred in 2008, two years before the Caterpillar purchase.

It’s not clear how the foreign investment laws could have been invoked to cover a purchase of an American company by another American company, or if they could, why this should be the pretext for “demanding job guarantees.” Presumably if it is wrong for a firm to close a plant or lay off workers, it is just as wrong whether it has recently been the object of a foreign takeover bid or not. Perhaps you will say we should bar all companies from closing a plant. Okay: why would they ever open one? If workers, once hired, cannot ever be laid off, why would they ever be hired?

[AusKanada]

Andrew Coyne with some factoids:

link

Good article, but I am not sure if the closure itself is the real centre of the outcry. This was a company that gleefully took millions in tax cuts before throwing a great number of workers out into the cold. That's capitalism, but I think tax cuts are a privilege that a corporation or business receives from we, the people. If they want tax cuts, they should also be accepting them in good faith. Caterpillar clearly didn't, it's ruthless capitalism at its best. Sharks in suits.

[bush_cheney2004]

... If they want tax cuts, they should also be accepting them in good faith. Caterpillar clearly didn't, it's ruthless capitalism at its best. Sharks in suits.

..and this is bad because? Sharks are part of the food chain, and play a very important role in and out of the water.

[fellowtraveller]

Good article, but I am not sure if the closure itself is the real centre of the outcry. This was a company that gleefully took millions in tax cuts before throwing a great number of workers out into the cold. That's capitalism, but I think tax cuts are a privilege that a corporation or business receives from we, the people. If they want tax cuts, they should also be accepting them in good faith. Caterpillar clearly didn't, it's ruthless capitalism at its best. Sharks in suits.

They took advantage of tax laws available to all and sundry corporations, and that is actually more socialist than capitalist. In a capitalist regime, govts would not offer anythig to anybody, sink or swim, on your own merits. As noted CAT recived no federal subsidy money at all. Every corporation and every citizen 'gleefully' takes tax breaks within the law, law they do not control.

[Shady]

Corporations like Caterpillar are modern day pirates

Nonsense and hyperbole.

Andrew Coyne with some factoids:

link

Great post. It illustrates just how ridiculous some of the anti-Caterpillar venom has been. Completely void of logic and reason, and any understanding of business and economics in general.

This was a company that gleefully took millions in tax cuts before throwing a great number of workers out into the cold.

More hyperbole. You don't take a tax cut. Tax rates are what they are, and you pay what the law dictates you owe. Sometimes you're able to keep more of what you earn, sometimes you don't. Also, I have no idea what they're emotional state was when they followed the current tax law. Gleeful doesn't come to mind.

That's capitalism, but I think tax cuts are a privilege that a corporation or business receives from we, the people

Just another fundamental misunderstanding of private property rights, business and economics. A business keeping more of the money they earn isn't getting anything from so-called we the people. I'm part of we the people. And I completely disagree with your fundamental misunderstanding of the economy and taxes. Please don't lump me in with your way of thinking. People like you don't represent me. You never will.

it's ruthless capitalism at its best.

There's no such thing as ruthless or non-ruthless capitalism. However, there is such a thing as pricing yourself out of a labour market, and costing yourself a job.

[AusKanada]

Nonsense and hyperbole.

Great post. It illustrates just how ridiculous some of the anti-Caterpillar venom has been. Completely void of logic and reason, and any understanding of business and economics in general.

More hyperbole. You don't take a tax cut. Tax rates are what they are, and you pay what the law dictates you owe. Sometimes you're able to keep more of what you earn, sometimes you don't. Also, I have no idea what they're emotional state was when they followed the current tax law. Gleeful doesn't come to mind.

Just another fundamental misunderstanding of private property rights, business and economics. A business keeping more of the money they earn isn't getting anything from so-called we the people. I'm part of we the people. And I completely disagree with your fundamental misunderstanding of the economy and taxes. Please don't lump me in with your way of thinking. People like you don't represent me. You never will.

There's no such thing as ruthless or non-ruthless capitalism. However, there is such a thing as pricing yourself out of a labour market, and costing yourself a job.

Right, completely devoid of any economic rationale, like your arguments whose origin, this Bush dogma actually created this great recession. Keep playing that tune buddy.

I apologize,I worded it properly. They gleefully paid far less than their due to society, while reaping billions in profits. I am sure they were crying about getting a multi-million tax cut from the feds...

I am glad people like you are going to get voted out of the U.S. House in 2012 and the House of Commons next sweep. And quit with the personal attacks, can you not point out the actual problems? You just fling mud. A business doesn't "earn" money, they hire workers, the workers produce the product and they gain profit. You're totally overlooking, like most rightists, the fact that business is a relationship. It shouldn't be run like a dictatorship simply because the CEO and Board of Directors legally can do so. That's not justifiable.

Wow, complete rubbish. So the workers "priced themselves out" by not accepting a 50% pay cut??!! I'd love for you to have your job sent to Vietnam unless your current wage was split in half, maybe then you could talk all about "non-ruthless" capitalism.

Typical garbage from Neo-Cons.