9 January, 2012
A mass rally is scheduled for Saturday, 21 January, in London, Ontario, to support locked out members of a bargaining unit of Canadian Auto Workers (CAW) Local 27. Sponsored by the Ontario Federation of Labour (OFL), the Day of Action against Caterpillar Inc. will begin at 11h in the southwestern Ontario city of 40,000.
CAW Local 27 members were locked out late in the evening on New Year’s Eve by Caterpillar’s Electro-Motive Diesel (EMD) in a callous display of corporate might. The 650 CAW members voted by 98% on 30 December for strike action and 24 hours later – just as they were returning to jobs following a holiday shutdown – they were locked out.
“We see this fight as being central to the entire labour movement and we are going to dig in our heels and fight Caterpillar with everything we’ve got,” said OFL President Sid Ryan.
Caterpillar’s EMD – run as part of the company’s Progress Rail Services Corp. – lockout followed workers’ total rejection of unreasonable wage and benefit concessions sought by the US-based company. There is little doubt that the company is trying to knock back wage and benefit levels of Canadian workers as a ploy to shift production of electric-powered diesel engines and associated railroad components to a start-up and lower wage plant in Muncie, Indiana, in the US.
EMD began operations in Muncie in October 2011. Until the New Year’s Eve lockout, CAW and EMD had bargained under a seven-month contract extension. However, EMD never once wavered from an initial, hostile and family-wrecking proposal that demanded wage cuts from C$35-per hour to C$16.50, health benefits cut in half, and elimination of a pension scheme.
CAW President Ken Lewenza
At the same time, EMD was advertising for a Human Resources manager in Muncie with the stipulation that he/she have “experience with providing union-free culture and union avoidance.”
EMD is paying average salaries between US$12-16-per hour in Muncie. Caterpillar and its wholly-owned Progress Rail Services is seeking to dislodge General Electric’s (GE) Transportation Division as the US’s premiere supplier of train locomotives at a time when government stimulus funds are available for infrastructure and transport needs. GE operates three major rail division plants that are unionised and it pays average salaries of US$30-per hour or more.
EMD’s London, Ontario, plant was purchased by Caterpillar in August 2010 for US$820 million from Greenbriar Equity Group and Berkshire Partners. The two capital companies in turn bought the manufacturing plant in 2005 for a quarter of that amount from General Motors when GM was shedding its non-auto making businesses.
Then, Caterpillar was interested in buying the southwestern Ontario plant but CAW opposed the deal because of Caterpillar’s horrid labour relations record in the US. Now, with Caterpillar in control and the company displaying obvious whipsawing of CAW members against non-union Muncie workers that will swell to 650 this year, Unit 2 of CAW Local 27 is forced to blockade the London plant to prevent equipment from leaving for the Indiana city 350 miles to the south.
CAW President Ken Lewenza called the lockout “a serious attack on working people, their families and the greater community of London.
“If (Caterpillar) is not going to do business in Canada, this wage cut is designed as a mechanism to blame workers,” said Lewenza, referring to production flight and a possible plant closing. In mid-December, the CAW lodged a formal complaint with the government over Caterpillar’s violation of the Investment Canada Act.
The company has benefitted by tax breaks given the predecessor equity firms in 2008. In fact, Canadian Prime Minister Stephen Harper used the plant as a backdrop in March 2008 to tout the federal government’s corporate tax breaks. The enterprise’s buyers received a C$5 million tax break then and a wider C$1 billion tax break on industrial capital investment.
EMD has other railroad manufacturing facilities in Sete Lagoas, Minas Gerais state, Brazil, and Sahagún, Hidalgo state, Mexico, a facility it operates jointly with Bombardier. It also operates a unionised facility in LaGrange, US state of Illinois. EMD sells locomotives, replacement parts, and diesel powered engines for marine propulsion, oil drilling and power generation in 130 countries, and currently has major contracts with companies providing equipment for state railways in Egypt, Saudi Arabia, and South Africa.
Caterpillar’s deep contract concession proposals, the lockout, matched with lucrative incentives from Indiana’s anti-union state government for the Muncie start-up are a cause of great concern, particularly for two countries that each lack worker-friendly industrial policies in the wake of a financial crisis.