MRO Magazine

Ontario premier in skirmish over Caterpillar plant closing

Oakville, ON - Premier Dalton McGuinty is accusing Ottawa of being complicit in the loss of hundreds of jobs at a London, ON, locomotive plant.

Human Resources

February 6, 2012
By MRO Magazine


Oakville, ON – Premier Dalton McGuinty is accusing Ottawa of being complicit in the loss of hundreds of jobs at a London, ON, locomotive plant.

Foreign companies shouldn’t be allowed to take over Canadian factories, then shut them down and strip them of their equipment, McGuinty said this afternoon in a speech at the Oakville Chamber of Commerce in Oakville, ON.

His comments come in the wake of US-based Caterpillar’s announcement last week that it plans to close the Electro-Motive plant, putting about 800 unionized and non-unionized workers out of a job, following what the company called a labour dispute. “It’s terrible news for the men and women who work at that plant,” McGuinty said.

“Eighteen months ago, when Caterpillar bought that plant, they had to get the approval of the federal government under an outdated law called the Investment Canada Act,” McGuinty said. For the record, the Electro-Motive plant had previously been owned by General Motors, also a US-based company.


“I believe there’s something fundamentally wrong with a federal law when it allows a Canadian plant to be bought and stripped clean in short order, throwing Canadian families out of work.

“We are eager to compete and succeed in the global economy. But if your intention is to buy an Ontario business so you can shut it down and strip out the jobs and the intellectual property, that’s not on,” McGuinty said to loud applause. “Canadians deserve a new law.”

McGuinty said the federal Tories have acknowledged the act is outdated but failed to do anything about it. He called on Prime Minister Stephen Harper to review the act.

The 450 unionized Electro-Motive employees had been asked to take a 50% pay cut to help keep the plant open, and to make other concessions. The Canadian Auto Workers (CAW) union members rejected the proposal, prompting the company to lock them out Jan. 1, 2012.

Caterpillar subsidiary Progress Rail Services, which operated the plant, said the cost structure at the London facility was unsustainable, even though Caterpillar last week reported a 58% increase in its quarterly earnings, and a record profit for 2011 of US$4.9 billion – an 83% increase over its profit in 2010.

The province now has staff in London helping the workers get back on their feet in finding new jobs or second-career training.

McGuinty told reporters the province is responsible for labour relations issues but that was not the situation in London. “This company … had no sincere interest in a long-term presence in that community,” he said. “In 21 years I have never heard of a business, domestic or international, that said to an employee group, ‘We’re going to cut your wages in half, this is a take-it-or-leave-it offer’.

“That’s a ‘We’re getting out of town’ kind of an offer to me. So it’s not a labour relations issue,” he said.

Last week, in a speech in London, ON, McGuinty said Caterpillar needs to return to the bargaining table and strike a deal with its locked out workers at Electro-Motive. Ontario has fair labour laws and a history of respect between employers and workers that usually works well, but isn’t working in this case, he said.

“It’s not working because the balanced, made-in-Ontario approach requires that unions and management sit down and talk to try to work out their differences, and so far the owners of Electro-Motive have failed to live up to Ontarians expectations,” he said.

“We understand they are both free to determine their own tactics, but we also expect both sides to show some flexibility to try to land an agreement that acknowledges that the company needs skilled workers and those workers deserve a fair wage.”

The New Democrats said it was a “little discouraging” that McGuinty would travel to London, mention the lockout in his speech, and yet fail to visit the workers on the picket line at Electro-Motive. “Those workers deserve to have his presence on the line,” said New Democrat Teresa Armstrong.

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 has so far declined to get involved in the lockout.

McGuinty said Ottawa, the province and municipality should all be working together to help save the Electro-Motive jobs, but admitted so far that wasn’t really happening. “Well, we’re going to do more,” he insisted.

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1 Comment » for Ontario premier in skirmish over Caterpillar plant closing
  1. Dave says:

    Typical American company. Buy the company, operate it for a few years, close it down, strip the mechinarey, ship it and all its interlectrical property to the State.
    Now, they, the company, set it all up with cheap labor and then say, “We created jobs in American” and look good doing it. However, the American public do not realize, that the company stripped thouse good paying jobs from another company.
    Basicly, an American corporation raped and piliged a company outside of their country.
    Well, enough is enough, the fedural Government needs to get involved and save Canadian Jobs.
    Here is what the Government needs to do.
    1. Impoise a tax of 50% on all Catipiller parts and equipment entering Canada.
    2. Ban Catipiller from advertizing its company in Canada.
    3. Delist Catipiller trading security from all stock exchanges in Canada.
    4. Ban any Catipiller clothing from being sold in any Canadian stores.

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