The London Electro-Motive Diesel workers, locked out by Caterpillar Inc., have ratified a severance deal. The 465 unionized workers are receiving three weeks pay for every year at the plant, plus $1500. And Caterpillar is kicking in $350,000 for a transitional centre to help workers find employment.
In print, the local paper is continuing to spread the myth that a profitable company, Caterpillar, is shutting down an efficient plant simply because American workers will work for less. If only this were true, but it's not.
It is complex world and it should come as no surprise the decision to close the London plant, a plant with a history going back to the middle of the last century, was not made just to save a few dollars. Although, I am sure that was a bonus appreciated by CAT.
The London locomotive plant is a remnant of the steadily shrinking branch plant economy that once powered Ontario. Before there was Mexico, there was Canada, and for Americans Canada was Ontario.
I'm old enough to recall when the Canadian dollar was worth more than the American dollar --- about six percent more at one point. The high value of the Canadian dollar was said to be killing Canadian competitiveness. In the early '60s I can recall hearing that the Canadian government was undermining the value of the Canadian dollar.
In June 1961 the Canadian and American dollars were about at par. By May of the following year, the Canadian dollar ceased to float and was pegged at 92.5 American cents. It stayed there until mid-1970. Canadians called the depreciated buck the Diefendollar. It may have inflated the cost of imported products bought by Canadians but it encouraged manufacturing in Ontario.
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| Currency Risk: a reason for business to relocate outside of Canada. |
It is a different world today. This should come as no surprise. It is now 2012. Fifty years have past. A lot happens in fifty years and for Canada, for Ontario, what has happened is not good.
The cheap Canadian dollar is a feature of the past. The post war boom is now but a distant echo. The United States is pulling in its horns and its branch plants. Think: Ford (St. Thomas/London), Sterling (St. Thomas), Navistar (Chatham), Westinghouse (London) and now EMD. And this is just a short portion of a very long list.
There are advantages to pulling manufacturing out of Canada and sadly it is not just American businesses that are being closed and pulled out of the country. EMD was an American branch plant. It always was. Its closure was no big surprise. This is a story that has been repeated time and time again right across the province.
It was not the refusal of the workers to accept a pay cut of approximately 50 percent that chased EMD from Canada. The London Free Press is reporting that CAW president Ken Lewenza said:
"A union member found a document indicating Progress Rail, a subsidiary of heavy equipment giant Caterpillar Inc. and parent company of Electro-Motive, always intended to close the plant, and had no intention of reaching a negotiated settlement.
"The letter on the Progress Rail website from company president Billy Ainsworth advised employees the London plant was closing and was dated May 23, 2011, more than eight months before the closing was announced.
"Lewenza said the company didn't refute the date or authenticity of the letter when confronted at the bargaining table."
While the closing of a branch plant is not surprising, what does come as a surprise is the closing of all the Canadian plants, like the Bick's pickle plant. Bick's was a Canadian operation started during the Second World War in Toronto. It was recently bought and closed by Smuckers out of the States, moving production to the States.
Back in the '70s, my first range was a McClary made in London. McClary closed its London plant and moved to Hamilton, merged with other appliance makers under the Camco banner. But Camco was bought out by Mabe, possibly the largest Mexican appliance maker. There is no production, that I know of, left in Canada.
The Canadian middle class is in trouble. Serious trouble. When I worked at the local paper, The London Free Press, many of the reporters and editors worried that one day Quebecor would decide to play hardball with them, with their union. They were concerned about their wages, their benefits, their retirements. Quebecor, like CAT, does not recoil from locking out its workers. Quebecor, like CAT, hates unions and has a reputation for union busting.
If the newspaper was searching for "an example of unconscionable greed that undermines every middle-class worker" the newspaper shouldn't have looked to EMD. It didn't have to look past its front doors.
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One note: Quebecor in London, like CAT, has made leaving easy for its workers. When the CAT worker said that the severance deal was "Better than a kick in the teeth," I could not agree more. I took a severance package and left the paper after more than three decades at the place.
I took a hit on my pension and my CPP; Both suffered cuts of about 24 percent because I had to start drawing years early. Still, I cannot knock the deal. I thank Quebecor, my union and my co-workers who toiled for me as my union reps hammering out my severance package. Thank you Shelley, et al.
I pray the EMD workers nearing retirement do as well as I have done. I wish them all, "Good Luck!"
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