The closing came eight days after Caterpillar reported record revenue of $60.1-billion (U.S.), a profit surge of 83 per cent to $4.9-billion, results that it said it hasn’t seen since the days of U.S. President Harry Truman, who presided over the first years of a postwar economic boom when he occupied the Oval Office from 1945 to 1952.
Progress Rail has announced it is closing its London locomotive operation.
The company, a subsidiary of Caterpillar, locked out its 450 London workers on Jan. 1.
In a statement released on Canada News Wire, Progress Rail said it is regrettable but it has become necessary to close the London facility
“The cost structure of the operation was not sustainable and efforts to negotiate a new, competitive collective agreement were not successful.
“Progress Rail’s global manufacturing network assures its customers that delivery schedules will not be impacted by this decision.”
Progress Rail said it is in the process of notifying the workers of their decision.
The lockout of the London workers had been a lightning rod for protests with the company asking employees to take as much as a 50% wage cut. A rally on Jan. 21 drew more than 5,000 people.
The announcement of the London plant closure comes one day before the company holds a job fair in Muncie, Indiana where it has a lower-cost factory.
CAW executive Jim Kennedy told workers the union will seek the best possible severance from Caterpillar.
“They have money,” he said.
The news was a devastating blow to the EMD workers who have kept up a 24-hour picket line at the plant since they were locked out Jan. 1.
A few sombre workers huddled in the picket line shack dubbed “The Cottage” Most were too upset and angry to comment.
Bob Pharand, a 23 year veteran of the plant stood dejected, while his wife weeped beside him.
The threat of an outright plant closure was a nightmare he tried to push to the back of his mind.
“You see it, but you don’t want to see it.”
He said the workers could never have accepted the company’s contract offer which would have slashed their wages in half.
“Not $16 an hour. No! How do you start your life? How do you buy a house?” he said.
Now he faces the grim prospect of retraining or finding another job in a city with 9% unemployment.
“I’m 55 - going back to school is going to be hard.”
Bob Scott, chairperson CAW Local 27 representing EMD workers, does not regret the tough stand taken by the union, even if it has resulted in the loss of 465 union jobs.
“What we did was right. It took us forever to get these wages, I will not look back at what we did. We held out for what was right.”
He also believes the stance sends a strong notice to other employers they cannot come in and intimidate London workers in an effort to slash wages, so it will bear long term benefits, he added.
“It is a shock, it is devastating. for these workers, it is unbelievable,” he said this morning at the Oxford Street picket line.
“I do not think this company ever had the intention of negotiating a collective agreement.”
Scott believes the company made the decision because public support, and international media coverage, was hurting the company’s image and dragging it out longer, would hurt more, he said.
“They knew we were not going to back down and I think was really hurting Cat’s image. Everyone realized how wrong they are and there was pressure. If not for that it would have dragged on a lot longer.”
The union bargaining committee is meeting this afternoon to discuss dates to bargain a closure agreement, where a closing date as well as severance will be settled.
At noon there were about 60 workers on the line.
Many passing motorists honked in support, but there was laughter coming from one vehicle.
“I just hope it never happens to him,” said Bill Watson, a CAW picket captain.
Watson said workers on the line were notified the plant was closing when an anonymous person in a van dropped off notices.
“That is indicative of the way the company works . . . That is the lowest way to tell people are losing their jobs,” Watson said.
Andrew Stolarski, a worker at the plant for 22 years, said the closure shows there is a need for a policy change about the type of businesses allowed into the country.
“Now it seems the way the world is running it is cut and run. If I don’t get my way, I’ll just close and leave and go somewhere else, but sooner or later there won’t be any place for these companies to go,” Stolarski said.
Energy Minister and London West MP Chris Bentley called Caterpillar’s decision to close the plant “deeply disappointing” although many will not be surprised by what they’ve done.
“I am deeply concerned about the workers and their families. For decades the workers at this plant have produced high quality locomotives, sold them around the world. Caterpillar comes in, takes over, effectively takes the expertise and closes the plant, leaving hundreds of workers out of work,” Bentley said.
Bentley said the Ontario government will do everything it can to support the workers in their time of need.”
The plant closure was raised in the House of Commons by both the Liberals and NDP. Deputy Liberal leader Ralph Goodale said the government approved the deal and now owes the workers. Prime Minister Stephen Harper obviously put all his bets on the company’s side, Goodale said. “That’s gone sour. It has not worked and he needs to stand and fight for these workers to make sure that they get the best out of what is now a very bad situation,” he said.
NDP deputy finance critic Robert Chisholm said taxpayers funded the growth of Caterpillar in Canada and is now funding the move of Caterpillar to the United State.
“I think Canadians would agree, that this government has a responsibility to hold that company accountable. You know, whether they decide that it’s a provincial jurisdiction or it’s this or it’s that, Canadian taxpayers have put millions of dollars into this company. This government has a responsibility to step up.”