TORONTO — The Canadian Auto Workers said it was not surprised by word Friday that American-based heavy equipment maker Caterpillar Inc. would close its Electro-Motive plant in London, Ont., a month after it locked out about 450 workers.
The closure was a “callous” move, but not unexpected because Caterpillar had no intention of keeping the London plant open, said CAW president Ken Lewenza, whose union estimates the move will impact about 2,100 jobs.
“From day one, we believed that Caterpillar was trying to provoke a crisis, by forcing deep cuts that were not possible,” said Lewenza.
“Another 1,700 workers employed in spin-off jobs are now the casualties of an outdated and dysfunctional Investment Canada Act, that attaches no commitment to Canadian jobs to corporate take-overs.”
Caterpillar (NYSE:CAT) subsidiary Progress Rail Services said Friday the cost structure at the locomotive plant was unsustainable, even though Caterpillar last week reported a 58 per cent increase in its quarterly earnings with a record profit of nearly $5 billion.
The company had asked the employees to take a 50 per cent pay cut to help keep Electro-Motive going, but locked them out Jan. 1 when the CAW union members rejected the proposal.
The Ontario Federation of Labour also lashed out at the federal government for not protecting the jobs at Electro-Motive.
“Job loss like this is going to continue to decimate towns across the country as long as Prime Minister Harper continues to allow corporate greed to drive incredible profits at the expense of the livelihood of Canadians,” said OFL President Sid Ryan.
“The Harper government is allowing multi-national corporations to gobble up Canadian manufacturing, strip our innovation and technology and then ship jobs and production to low-wage states.”
Ontario Economic Development Minister Brad Duguid confirmed the Electro-Motive closure Friday morning, but had no details.
“It’s too soon for me to be able to speculate on the reasons for their moving,” said Duguid. “I haven’t heard any rationale for it.”
The announcement of the plant closure came just days after Premier Dalton McGuinty criticized the company during a speech in London, and after the province’s Ministry of Labour tried to get the employer back to the bargaining table.
“So far the owners of Electro-Motive have failed to live up to Ontarians expectations,” McGuinty told the London Chamber of Commerce Tuesday.
The New Democrats said McGuinty should not have waited a full month before speaking out about the Electro-Motive lockout.
“The writing was on the wall, they were asking to cut salaries by 50 per cent, and this government, this cabinet was absent without leave,” complained Ontario NDP critic Cheri DiNovo.
“Premier McGuinty should have stepped in. He should have intervened, he should have done everything possible to save those jobs.”
McGuinty was missing in action on the Electro-Motive file, said the Progressive Conservatives.
“Now we’re finding out he didn’t even make a phone call to Caterpillar executives,” said Tory critic Monte McNaughton.
“I think it’s disgraceful, and it shows that since the (Oct. 6) election, Dalton McGuinty has done nothing to create jobs in Ontario.”
Prime Minister Stephen Harper used Electro-Motive as a backdrop in 2008 to promote big tax breaks for industrial capital investments, but the federal government declined to get involved in the labour dispute.
In Ottawa Friday, the Liberals said millions of taxpayers’ dollars have gone into Caterpillar and mocked Harper’s use of Electro-Motive for his announcement.
“I am looking at a picture of the prime minister in a locomotive down in London, Ont., and he is waving,” said Liberal MP Rodger Cuzner.
“He must be waving to the 450 employees that they just let go when they shut down the plant there.”
The union has called Caterpillar greedy and immoral after the company reaped record high sales last year and chief executive Doug Oberhelman received a $10.5-million annual paycheque.