Protest in support of 'locked out' Ontario workers

It would be interesting to know when and how the Indiana Workers accepted this crappy deal and what if any contact was made at the time with Canadian Workers. Extending the dispute back to indiana now might prove difficult in the circumstances but not impossible.

Caterpillar has states that if the workers refuse to accept the new terms, then they will shift all production to Indiana, were they have already imposed the new terms and conditions.

Technically, this is incorrect. As far as I know (from talking to workers at the picket line), the plant in Indiana was started with the conditions. And production can't simply be shifted to Indiana because the workforce there is unskilled. The workers at the London plant, however, is very skilled. The plant builds custom-order locomotives, which requires all kinds of engineers (welders, electricians, plumbers etc.). In Indiana there is no such workforce, but the state did actually subsidize training programs so that Caterpillar built the plant. Part of the problem with that training program is that as soon as workers get skilled they very often refuse to continue working for $16 an hour and simply go where they can get a higher wage.

On top of that, the plant in London has apparently a lot of raw material, finished and semi-finished goods. Some workers are talking of occupying the plant/taking it hostage to at least get a severance package. Short story is: it won't be that easy for CAT to move to Indiana.

I've been meaning to write something up about this, but I've just got no time at the moment.

London Free Press

Electro-Motive Diesel has more than $7 billion in orders on the books during the next three years, a Canadian Auto Workers official says.

The question is, where will the locomotives be made?

Electro-Motive is owned by Caterpillar Inc. and has orders for more than 300 locomotives this year, said Bob Scott, chairperson of Canadian Auto Workers Local 27, which represents local Electro-Motive workers.

The company has orders for more than 700 locomotives in 2013 and 800 the following year, Scott said.

Each locomotive is worth as much as $4 million, meaning the 1,800 locomotives will be a massive payday for Cat and its Progress Rail Services Corp. subsidiary that operates Electro-Motive.

Workers at the company’s plant in London were locked out Jan. 1 after they refused to accept a contract that would slash their wages by more than half in some cases.

“We were told about the (production) schedule before the lockout and they have very high volumes coming up. They are anticipating a lot of orders,” Scott said.

Progress Rail’s plant in Muncie, Ind., is not producing locomotives.

A Bombardier-operated plant in Sahagun, Mexico, has a contract with EMD, but only builds locomotives part-time, begging the question how will Caterpillar meet the growing demand?

Caterpillar declined comment.

“I lie awake at night trying to figure out what their plan is. I have no idea how they will do it,” Scott said.

The Bombardier plant in Mexico has about 125 workers. Locomotive production is limited to about three a week because the plant also makes rail cars, Scott said.

The Muncie plant has about 150 workers. The facility can’t retain staff because of low pay and unskilled labour, according to numerous reports. It has not yet produced a locomotive.

“There is a real risk now Caterpillar will lose market share to GE,” Scott said.

For Caterpillar, the hard line in bargaining with so much at risk is a case of ideology trumping economics, said Ken Hardy, business professor at the Richard Ivey School of Business at the University of Western Ontario. Caterpillar has always taken a hard line on low pay and won’t budge, he said.

“We don’t see this very often. It is principle driven, almost like a religion, that ‘we have got to have costs down,’ ” he said.

Electro-Motive is at a “very crucial juncture” in its development and needs to deliver quality goods on time or risk losing business, said Kumar Saha, analyst with Frost and Sullivan, a research and consulting firm in Toronto.

“EMD has not been doing well, and Caterpillar and Progress Rail were supposed to make them more efficient . . . The lockout could hurt business. It’s anyone’s guess what Caterpillar intends to do,” he said.

“They need to assure customers their production capacity and quality are up to snuff.”

It takes about five months from the time an order for a locomotive comes in for the work to be completed. Once work begins, the London plant can complete a locomotive in about 70 days, Scott said.

That means a labour settlement, and a start in production, must come soon if Electro-Motive is to meet its orders.

The locomotive order board is busy for the next three years because in 2015 new emission standards kick in for locomotives, pushing up the cost, so rail companies are looking to upgrade fleets now, Scott said.

http://www.lfpress.com/news/london/2012/01/23/19284006.html