Politicians keeping quiet on issue
Damm expects life to be tight on $200 a week in lockout pay from the Canadian Auto Workers union.
After extending the previous contract by six months to New Year’s Eve, the company issued a final offer last week to halve wages, along with significant reductions in benefits. When the CAW said no, the 465 workers it represents at the plant were locked out Sunday.
“I expect this to be long and drawn-out struggle,” said CAW president Ken Lewenza. “How do we find some space to negotiate?”
From Caterpillar’s perspective, it’s offering roughly what Electro-motive workers are paid at a plant in Lagrange, Ill. It charges the CAW has “antiquated” work rules that make the London plant inefficient.
“EMC is not sufficiently flexible and cost-competitive in the global marketplace, and the London plant is at a competitive disadvantage,” said Anne Marie Quinn of the Toronto public relations firm Fleishman-hillard, which is handling questions for the company.
“EMC is seeking the assurance of a prompt ratification of the company’s last offer and has instituted a lockout at the London facility until a ratified contract is in place.”
Quinn denied that there are plans to use replacement workers or to close the plant.
Politicians at Queen’s Park and on Parliament Hill are taking a handsoff approach to the stalemate, even after Prime Minister Stephen Harper’s government gave the factory’s previous owner $5 million in tax breaks. Progress Rail, a Caterpillar subsidiary, bought it in 2010.
A spokesman for federal Industry Minister Christian Paradis said Progress Rail was not required to make any undertakings about how its takeover of EMC would impact the economy, jobs or business com- petition, the Star’s Les Whittington reports from Ottawa.
The industry minister is required to review such matters to determine if a foreign takeover is of “net benefit” to Canada but Richard Walker said the value of the company’s assets in this case was below the $299 million threshhold.
The federal government will not intervene in the standoff at EMC because “these are disputes between a private company and a union,” Walker said.
That type of attitude is not playing well in London, said Mike Moffatt, an economist who teaches international trade and labour relations at the University of Western Ontario’s Ivey School of Business.
“There’s a lot of backlash against Caterpillar over the $5 million in tax breaks . . . the details of that deal were not made public. Will they have to pay back any money?” Moffatt asked. “This by all accounts is a profitable plant in a profitable corporation. I don’t recall it ever happening where a company in that situation came at workers to cut their wages in half.”
It could also be politically tricky for Premier Dalton Mcguinty’s minority Liberal government, which has two high-profile cabinet ministers in London: Deb Matthews in health and Chris Bentley in energy.
“I don’t know why we don’t have them up in arms over this,” said NDP Leader Andrea Horwath, calling the lockout “another blow” to the area after the closing of Ford’s Talbotville plant last year.
“This is a very profitable corporation and yet they’re turning around and putting the boots to their workers.”
Ontario Labour Minister Linda Jeffrey is on vacation and was not available for comment. Her office issued a statement urging both the company and union to get back to the bargaining table “for the sake of the community and the families of local workers.” “Bargaining in good faith behind closed doors is the best way to resolve these labour issues,” said the statement, offering mediators to assist “immediately” with any talks. Although Ontario’s government is proposing a new economic development fund to help hard-hit southwestern Ontario, it would not be used in this EMC situation, said Brianna Ames, a spokeswoman for Economic Development Minister Brad Duguid, who could not be reached for comment. Tim Carrie, president of CAW Local 27, said he’s surprised he has not received phone calls from Mcguinty’s two London cabinet ministers. “It’s very disappointing. I thought we had a good relationship,” said Carrie, noting he has talked with rookie New Democrat MPP Teresa Armstrong, who last fall won the riding of London-fanshawe, where the factory is located. The local federal riding is also held by the NDP, which may explain why the lockout and the circumstances leading to it may not be getting the political attention that critics think it deserves, said Moffatt.
“We’re not expecting a federal election any time soon, but London is a very important city for the provincial Liberals,” he said.
Moffatt said he is not confident about the future of the London plant, given the lower wages at EMC’S U.S. plants, and wonders why Caterpillar is “going through the motions” instead of shutting down. “The CAW, I think, sees the writing on the wall.”