The dramatic move at the Electro-Motive Canada factory, owned by Caterpillar subsidiary Progress Rail, confirmed the worst suspicions of the Canadian Auto Workers union before the lockout began.
“We said it had all the markings of a closure,” CAW president Ken Lewenza said Friday after the closure was announced by the company.
“They denied it at the time . . . but they did exactly what they planned to do. I’m pissed.”
Electro-Motive said labour costs were too high in London and sought to get them on par with its operations at a new plant in Muncie, Ind., where industry analysts have said the company could take advantage of “Buy American” policies.
“It is regrettable that it has become necessary to close production operations at the London facility,” Electro-Motive said in a statement, declining to answer further questions.
“The cost structure of the operation was not sustainable and efforts to negotiate a new, competitive collective agreement were not successful.”
The wage concessions the company was seeking from CAW members earning up to $34 hourly would have put pay levels on par with its American operations.
Last month, Caterpillar reported annual profits rose 83 per cent to a record $4.9 billion.
Electro-Motive Diesel employee Ralf Zapke was on the picket line with his fellow workers when they heard about the closure, wondering what kind of severance they will get from a company playing hardball.
“There are lots of people who are just terrified . . . they have families, kids, mortgages, car payments. They are afraid they’ll lose it all,” he said. “No one knows what will happen. We’ll try to work out closure language but will they try to treat us the same way?”
Closing the plant had immediate political reverberations on Parliament Hill and at Queen’s Park.
Electro-Motive received $5 million in federal tax breaks announced on the factory floor by Prime Minister Stephen Harper in 2008. That was before the plant was sold to its current owners in 2010, prompting questions from the union as to whether there were any strings attached to the money.
“I don’t know how we can hand these guys money like that with no job guarantees. It’s unconscionable,” said Lewenza, who rushed to London to meet with workers Friday after being informed of the closure by a senior Caterpillar official.
In Ottawa, Liberal MP and human resources critic Rodger Cuzner criticized the government for allowing the plant to shut down and poked fun at Prime Minister Stephen Harper for personally handing out the tax incentives, which went to buyers of the company’s locomotives.
“I am looking at a picture of the Prime Minister in a locomotive down in London, Ont., and he is waving. He must be waving to the 450 employees that they just let go when they shut down the plant there,” Cuzner said in the Commons during question period.
Conservative MP Shelly Glover defended the government’s approach, saying the Conservatives had been given a strong mandate help Canadians put the recession behind them. “We do sympathize with those who have lost their jobs, but we are creating jobs,” she told MPs, citing measures like the hiring credit for small business.
Premier Dalton McGuinty took the rare step earlier this week of wading into a labour dispute, urging Electro-Motive to make a “reasonable” offer to the staff but acknowledged he had not called company executives.
“Our thoughts are with the workers,” Ontario Economic Development Minister Brad Duguid said Friday, minutes after being officially informed of the decision.
“This is a volatile time in the global economy.”
Duguid insisted “we will replace those jobs” with the government’s new economic development fund for southern Ontario and defended McGuinty’s intervention.
“I don’t think it’s ever inappropriate for a premier to stand up for workers in a situation that is not in keeping with the balance and fairness that we’ve built in this province,” he told reporters at Queen’s Park.
The effort was too little too late, said New Democrat MPP Cheri DiNovo, calling the closure “awful news.”
She blasted the minority Liberal government for inaction in London, where the party lost two seats in the Oct. 6 provincial election — one to the NDP and another to the Progressive Conservatives.
“We’re not seeing any real response to this latest kick,” said DiNovo. “The premier is not living up to the expectations of Ontarians. Did they do anything to try to salvage these jobs?”
DiNovo said the plant shuttering is proof that corporate tax cuts don’t work and the rate should remain at 11.5 per cent instead of being cut to 10 per cent by July 2013 as is currently planned.
“What they should be doing is tying any corporate tax giveaways to job creation,” she said.
“Remember, there’s another round of tax cuts coming with again no strings attached.”
Progressive Conservative MPP Monte McNaughton (Lambton—Kent—Middlesex) called it a difficult day for families in southwestern Ontario and said McGuinty should have been more proactive with Caterpillar.
“We had a lot of workers at that plant from my riding,” he said. “Obviously this is a sad day.”
It’s likely that Electro-Motive bought the plant with an eye to shutting it down and moving the equipment and technology to its Indiana operations, where lower wages are paid, said Mike Moffatt, an economist at the University of Western Ontario’s Ivey School of Business.
Friday’s announcement to close the plant came just days after Indiana passed legislation to become a right-to-work state, meaning workers in unions do not have to pay mandatory dues.
“I don’t think that’s a coincidence at all,” said Moffatt, who predicted CAW workers in London will remain vigilant around the plant to block any efforts to move the equipment out.
“It’s going to be hard because the workers are going to be there 24/7. It’s going to be an ugly situation.”
London is already reeling with a regional unemployment rate approaching 10 per cent and the closure last year of the Ford auto assembly plant in nearby Talbotville, south of the city.
Original Article
Source: Star
Author: Rob Ferguson, Robert Benzie, Tanya Talaga
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