Recession-ravaged London, Ont., needn’t lose its status as one of the world’s leading locomotive manufacturing centres.
Yes, that is the plan revealed Friday by U.S.-based Caterpillar Inc., owner of London’s 90-year-old Electro-Motive Diesel Inc. (EMD). Caterpillar has abruptly shut down the firm just 18 months after buying it. Cat is poised to ship EMD’s specialized equipment and technology — intellectual property developed in London over several generations — to low-wage jurisdictions outside Canada.
Naturally, Caterpillar presents this outrage as a fait accompli.
Already there are calls for a government inquiry to determine how such industrial rape can be prevented in future. A good idea. But we also should and can quash Cat’s plans for EMD.
When it paid a bargain $820 million for EMD in 2010, Caterpillar appeared to be getting a mere factory. What it actually got its hands on is one of the global industry’s few major locomotive manufacturers. (EMD’s sole major North American rival is General Electric Co.) EMD is richly endowed with made-in-Canada technology and boasts the largest customer base in the world.
At every turn in this humbling saga for Canada, Caterpillar has acted in bad faith.
It stretches credulity to imagine that Caterpillar acquired EMD less than two years ago with no thought of ending locomotive manufacturing in Canada.
After all, the Peoria, Ill.-based Caterpillar, the world’s largest maker of construction and mining equipment, has for years been shifting jobs to lower-cost jurisdictions. That’s precisely its intention with EMD.
But if Caterpillar had even hinted at using that playbook with EMD, its planned purchase would have been rejected for lacking “net benefit” to Canada. Ottawa blocked the planned foreign takeover of Potash Corp. and a proposed U.S. acquisition of the aerospace division of MacDonald Dettwiler and Associates Ltd., maker of the iconic Canadarm.
Creating what it hoped would be a plausible excuse to kill one of London’s few remaining large private-sector employers, Cat soon after taking possession of EMD presented its London workers with a proposed new contract. EMD workers were asked to accept a 50 per cent cut in pay, to an average $16.50 an hour, and their benefits would be eviscerated.
To put this in perspective, when governments bailed out General Motors Corp. and Chrysler Corp, they also demanded workers accept pay cuts of roughly 50 per cent. Employees of the Detroit Three automakers are now paid about $42 an hour, or what Toyota Motor Corp. and Honda Motor Co. Ltd. pay their North American and Japanese workers.
By contrast, the relocated EMD jobs will pay $15 to $19 an hour for high-skill work akin to auto-making.
When EMD employees predictably balked at being stripped of a decent living wage, Cat made clear that its offer was take-it-or-leave-it. On New Year’s Day it locked out workers. Five weeks later, it fired them. Which meant that previous months of “bargaining” with the employees’ union, the Canadian Auto Workers, had been a farce.
In shutting down EMD, Cat didn’t tender the customary warning to the union or to local government, Queen’s Park or Ottawa — from which a Cat-owned EMD only last year received a $5 million federal subsidy hand-delivered by Stephen Harper during a factory visit.
We could let EMD join the long list of trophies we’ve auctioned off to foreign interests, including Alcan Inc., Inco Ltd., Nortel Networks Corp.’s multibillion-dollar trove of patents, and Stelco Inc., whose new owner, U.S. Steel Corp., promptly reneged on its vow to maintain Stelco’s Hamilton workforce.
Or we could take a tad more control of our economic destiny.
We could nationalize EMD, for which there is abundant precedent across the continent. America’s third-largest bank, biggest insurer and dominant home-mortgage guarantors are now wards of the state.
Short of nationalization, Ottawa could impose prohibitive tariffs on all Cat products. That might eventually bring Athabasca tarsands production, heavily reliant on Caterpillar equipment, to a halt. Which would be a useful topic of discussion between Barack Obama and Caterpillar CEO Doug Oberhelman, since Athabasca is America’s largest source of imported oil.
Yes, the tariffs could be contested as an alleged violation of World Trade Organization rules. But then, it’s Cat alone that has consistently acted in bad faith.
On January 27, 2009, Caterpillar laid off 20,000 employees, which is some kind of record. The ostensible reason was to gird for the global recession. But in the short time since, Cat’s revenues have doubled, profits have quadrupled and its stock price has soared by 270 per cent. The recession has provided cover for countless firms squeezing more revenue from fewer and lower-paid workers.
Caterpillar likes to play hardball. So let’s play hardball.
We pay a stiff price as the world’s biggest branch-plant economy, having to ask how our economic ambitions will play in Peoria. And Stuttgart.
And London. The one in England.
Original Article
Source: Star
Author: David Olive
Yes, that is the plan revealed Friday by U.S.-based Caterpillar Inc., owner of London’s 90-year-old Electro-Motive Diesel Inc. (EMD). Caterpillar has abruptly shut down the firm just 18 months after buying it. Cat is poised to ship EMD’s specialized equipment and technology — intellectual property developed in London over several generations — to low-wage jurisdictions outside Canada.
Naturally, Caterpillar presents this outrage as a fait accompli.
Already there are calls for a government inquiry to determine how such industrial rape can be prevented in future. A good idea. But we also should and can quash Cat’s plans for EMD.
When it paid a bargain $820 million for EMD in 2010, Caterpillar appeared to be getting a mere factory. What it actually got its hands on is one of the global industry’s few major locomotive manufacturers. (EMD’s sole major North American rival is General Electric Co.) EMD is richly endowed with made-in-Canada technology and boasts the largest customer base in the world.
At every turn in this humbling saga for Canada, Caterpillar has acted in bad faith.
It stretches credulity to imagine that Caterpillar acquired EMD less than two years ago with no thought of ending locomotive manufacturing in Canada.
After all, the Peoria, Ill.-based Caterpillar, the world’s largest maker of construction and mining equipment, has for years been shifting jobs to lower-cost jurisdictions. That’s precisely its intention with EMD.
But if Caterpillar had even hinted at using that playbook with EMD, its planned purchase would have been rejected for lacking “net benefit” to Canada. Ottawa blocked the planned foreign takeover of Potash Corp. and a proposed U.S. acquisition of the aerospace division of MacDonald Dettwiler and Associates Ltd., maker of the iconic Canadarm.
Creating what it hoped would be a plausible excuse to kill one of London’s few remaining large private-sector employers, Cat soon after taking possession of EMD presented its London workers with a proposed new contract. EMD workers were asked to accept a 50 per cent cut in pay, to an average $16.50 an hour, and their benefits would be eviscerated.
To put this in perspective, when governments bailed out General Motors Corp. and Chrysler Corp, they also demanded workers accept pay cuts of roughly 50 per cent. Employees of the Detroit Three automakers are now paid about $42 an hour, or what Toyota Motor Corp. and Honda Motor Co. Ltd. pay their North American and Japanese workers.
By contrast, the relocated EMD jobs will pay $15 to $19 an hour for high-skill work akin to auto-making.
When EMD employees predictably balked at being stripped of a decent living wage, Cat made clear that its offer was take-it-or-leave-it. On New Year’s Day it locked out workers. Five weeks later, it fired them. Which meant that previous months of “bargaining” with the employees’ union, the Canadian Auto Workers, had been a farce.
In shutting down EMD, Cat didn’t tender the customary warning to the union or to local government, Queen’s Park or Ottawa — from which a Cat-owned EMD only last year received a $5 million federal subsidy hand-delivered by Stephen Harper during a factory visit.
We could let EMD join the long list of trophies we’ve auctioned off to foreign interests, including Alcan Inc., Inco Ltd., Nortel Networks Corp.’s multibillion-dollar trove of patents, and Stelco Inc., whose new owner, U.S. Steel Corp., promptly reneged on its vow to maintain Stelco’s Hamilton workforce.
Or we could take a tad more control of our economic destiny.
We could nationalize EMD, for which there is abundant precedent across the continent. America’s third-largest bank, biggest insurer and dominant home-mortgage guarantors are now wards of the state.
Short of nationalization, Ottawa could impose prohibitive tariffs on all Cat products. That might eventually bring Athabasca tarsands production, heavily reliant on Caterpillar equipment, to a halt. Which would be a useful topic of discussion between Barack Obama and Caterpillar CEO Doug Oberhelman, since Athabasca is America’s largest source of imported oil.
Yes, the tariffs could be contested as an alleged violation of World Trade Organization rules. But then, it’s Cat alone that has consistently acted in bad faith.
On January 27, 2009, Caterpillar laid off 20,000 employees, which is some kind of record. The ostensible reason was to gird for the global recession. But in the short time since, Cat’s revenues have doubled, profits have quadrupled and its stock price has soared by 270 per cent. The recession has provided cover for countless firms squeezing more revenue from fewer and lower-paid workers.
Caterpillar likes to play hardball. So let’s play hardball.
We pay a stiff price as the world’s biggest branch-plant economy, having to ask how our economic ambitions will play in Peoria. And Stuttgart.
And London. The one in England.
Original Article
Source: Star
Author: David Olive
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