Caterpillar announces closoure of EMD London plant

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jmt Assistant Commissioner

It will not come as a surprise, the London, Ont., plant of Cat/PR/EMD was closed on Friday

PR's CEO's letter to employees

"Dear Employee:  

Earlier today, we had the very unfortunate
task of announcing the decision to cease production at Electro-Motive Canada’s
London, Ontario facility. Our efforts – spanning about 9 months – to
negotiate a competitive labor agreement with the Canadian Auto Workers
union were not successful.  

As you know, we compete in a global marketplace
where orders for locomotives are won or lost based on extremely competitive
pricing and the ability to meet short turnaround times. All facilities
within EMC, Electro-Motive Diesel and Progress Rail Services must achieve
and maintain competitive costs, quality and operating flexibility to win
in the global marketplace. The London plant, primarily because of an antiquated
labor contract, faced serious competitive disadvantages.  


Even though EMC’s final offer addressed
these competitive disadvantages, the union would not accept our offer.
 The gulf between the company and the union was simply too wide to
resolve.  Market conditions made today’s regrettable decision unavoidable.

 
We will now start the process of conducting
an orderly closure of the London production operations, including the transfer
of locomotive assembly operations to our competitive facilities in North
and South America. We are confident these facilities will distinguish themselves
to our customers in quality and service.


We appreciate your hard work on behalf
of our customers, and your commitment to see our company become the leader
in the global rail industry. Over the past year, we have made large capital
investments to position our company to achieve this goal. We know we can
count on your help as we realign our operations and show our customers
that we are the company they can trust for all of their rail equipment
needs.


Sincerely,
Billy Ainsworth
President and CEO"

http://www.cbc.ca/news/canada/story/2012/02/03/electro-motive-plant-london-close.html

http://www.washingtonpost.com/business/ontario-government-says-caterpillar-will-close-locked-out-electro-motive-plant-in-canada/2012/02/03/gIQAJ0uxmQ_story.html

http://online.wsj.com/article/SB10001424052970203889904577200953014575964.html



 
alcoworldseries Deputy Commissioner

Location: Auburn
True to form the Yanks bashing unions yet again, I bet the CEO didn't have to take a pay cut. The yank system has MUCH to answer for.
 
Draffa Chief Commissioner

And people wonder why the Occupy movement has such broad general support in the US.
 
BDA Chief Commissioner

Location: Sydney
Yes the rabid socialists want you to believe that , aside from London Ontario being in Canada rather than America and the Canadians saying bash your C02 tax up ya scooper .

Manufacturing all around the western world is taking a beating and one day Joe average moron is going to wake up to the fact that isn't it luvly and geen to have C02 taxes/no manufacturing/no coal fired power stations/solar and wind farms everywhere/watch the very few ruling rich driving around in their hybrid Poous/Clamry - actually probably a Europen exotic because they represent greater personal wealth .
He's going to realise that living in his Ghetto and with no job and living on stale potatoes and sauerkraut and sweating/shivering through the climatic spectrum is no life .
He has to remember that his job and millions of others were sold offshore because others in third world countries could do it cheaper - and his governments let it happen . He loves big brother as much as he loves free trade and the lack of protectionism .
There are ways to stop the rot thats destroying each and everyones standard of living and thats to cut the socialists off at the polling booth , they won't engineer themselves to be poor at the top but they'd love for the vast masses to be trapped in a poor cycle thats virtually impossible to escape from .

I want the socialists gone and protectionism reinstated in all the western nations because nothing else can save them from third world living standards . Redistribution of wealth isn't going to improve the plight of the masses in third world countries because you can't force their "rulers" to distribute wealth given to them from the west .

Protect you local industries and price imports out of the market , value add raw materials and let the market set pricing .
Carbon dioxide and mining taxes are not the way to grow a population and its economy nor is self imposing fines and stupidly giving away many billions to the UN to waste .
Some of you socialists want to argue the fairness of rich capitalists but just think for a moment how they got/stay rich and the HR needed to keep them successful . They need a consumer market and a work force just as badly as the workers need wages .

Socialism is the pathetic practise of allowing the idealists to engineer their level of wealth and power , its not all about everyone being equal and getting a fair deal . If you could get an honest answer from the masses in the one time Soviet Union and present China they'd tell you their lot is pretty grim .

Here it will come down to a few things  , the failings of workchoices can be addressed but the failings of left wing socialism cannot .
It remains to be seen if we can turn iron ore and bauxite into Iron and aluminium and with a manufacturing industry we can . Changing it from a raw state to a usable one isn't going to be squeeky clean but selling it for realistically SFA per tonne and allowing someone else to do it doesn't make it any cleaner does it ? If you give Gillie Goose and Gwano their way they'll think a clean face and a dirty smeg is the way to keep up appearances while the smeg goes on out of sight .
I'm not saying Rabbit and co are ideal by any means but anything that reverses the power swing to the extreme left is a good thing - lesser of two evils if you like .    

Its your lifestyles and your calls . How bad do you want it to be ?
 
bingley hall Minister for Railways

Location: On a freight train to crazy town
You really are one confused puppy BDA.

Globalisation is all a socialist plot - I almost choked on me Weetbix.

As if the Mad Monk is going to bring in a new era of protectionism and save our souls Laughing
 
BDA Chief Commissioner

Location: Sydney
What - based on the fact that the world is a fair place ?
I don't think world governance and banking is the answer and the majority of plebs won't either .
Globalisation , yep . A good way to price your work force out of the market by being undercut by slave workers in other countries with no morals or standards . You want equality world wide then enforce safety standards and a sensible wage structure .
Whats that , they can't afford to ? Well we can't afford unemployment either ... Yet business after business goes out the door backwards and sacks their workforce , several hundred more on the dole , and moves offshore leaving skills to die in Australian graves .
Thanks Julie , thanks Wayn , thanks Ross , thanks Bob . Thanks for a lot of hardship and grief . Worse than thanks for nothing  ...
 
jakar Chief Train Controller

Location: Melbourne
True to form the Yanks bashing unions yet again, I bet the CEO didn't have to take a pay cut. The yank system has MUCH to answer for.
- alcoworldseries


Leaving aside the fact that the plant is Canada and not in America as BDA has pointed out, I wonder how many of the workers in hindsight would rather have taken a small pay cut or pay freeze than lose their jobs all together? I know which option I would've preferred.

As I'm in a management position (up until March anyway as I'm changing roles) my perspective is probably different than a general employee. When I get into discussions with my employees about pay, conditions, spending etc, I always ask a simple question - What would you do if you were in my position? When all the facts and reasons behind decisions are explained, 99% of the time the employee ends up in agreeance with me.

This isn't union bashing as I am still a member of one and they definitely have their role, but sometimes unions need to learn that there isn't a bottomless pit of money and sometimes paycuts are necessary to remain viable particularly in a global market. It can and does get to a point where if the business doesn't make x amount of profit then you might as well shut the place down, as appears to be what has happened here.

I am also a believer that if you want to earn more money than the company is willing to offer, show some initiative and do some courses and look for work elsewhere at a company that will meet your expectations. The issue of CEO pay is a bit different and tricky at times, and is usually up to the board and shareholders to decide upon. Are CEO's pay justified? Quite often not in my opinion, but along with the pay and perks they're also under incredible pressure, a fact that is often overlooked in these discussions.

Jakar
 
UP9372 Assistant Commissioner

Location: Banned
BDA. From your rantings I am beginning to wonder if you have the mental stability to remain a train driver.
 
jakar Chief Train Controller

Location: Melbourne
Poor old CEO's, nobody told them they had to do their "terrible" jobs, why they can always do some courses and go and get a different job?
But, then again, they wouldn't want to miss their bonuses would they?
Cheers
- WayneTedrow


Wayne, it may be that i'm still not exactly 'with it' after just competing in a triathlon, but i'm not sure I follow your post or even if it was in response to mine?

No one has said CEO's have terrible jobs have they? I also said that quite often I don't agree with the amount that some are paid. Having said that though, every time there is a pay dispute it inevitably gets around to 'The CEO gets paid X, why can't we get X because of that', yet the amount of pressure and responsibility of a worker is normally a fraction of that on a CEO.

These days everyone seems to think that they're owed a significant pay rise without doing anything for it, hence my comment that if you want to earn more money than whats offered, upskill yourself by any means possible to be accepted for a position that pays what you want. If you want to earn the big bucks and get the bonuses of a CEO, be smart about it and get some training in the areas that will help you rise up the ranks in your company. It ain't rocket science.

At some stage everyone needs to realize that no matter how much you are getting paid, there will always be someone getting paid more.

Jakar
 
BDA Chief Commissioner

Location: Sydney
BDA. From your rantings I am beginning to wonder if you have the mental stability to remain a train driver.
- UP9372


Really ? Since when did a persons political views affect their ability to do their job ? I can also question the stability of someone that goes by the name of a locomotive used on the other side of the world .
I don't think politics as I go about my work but it does get mentioned - only a lot . You'd have get a bulk booking at a shrinks establishment because it seems that 75 to 80% of us think similar things yet the wheels keep turning .     
 
raymond Deputy Commissioner

Location: Gladstone, Queensland
Small pay cut,it was about 50% cut,could you aford a 50% paycut.
I believe it is all about moving the production to Mexico where they will not have to pay the workers much and the safty will be almost non existant.



   RAYMOND
 
SPSD40T2 Chief Commissioner

Location: Platform 9-3/4 and still waiting !!
Its pretty obvious it was a set job from the get- go to shut down a heavily unionised and expensive operation ( in Cat's eyes).

London was always going to be closed. Only a  matter of time and method.

Sympathy to the workers.  There was never going to be a middle ground in all this.
 
arctic Assistant Commissioner

Location: Zurich
Small pay cut,it was about 50% cut,could you aford a 50% paycut.
I believe it is all about moving the production to Mexico where they will not have to pay the workers much and the safty will be almost non existant.



   RAYMOND
- raymond



Unless I am missing something - EMD dont have a plant in Mexico. Their parent, twice removed, does but would unlikely be set-up for locomotives. EMD have subcontracted locomotive production to Bombardier in Mexico in the past as an "overflow" shop but they don't own it. A little research shows they will be producing locomotives at Muncie, Illinois, USA.

In 1992 EMD moved production from La Grange USA to London Canada. In 2012 it looks like they will move it back to the USA. Both times was for competitive pressure. Other than for the local Canadian workers, whats the big deal?  

cheers
 
raymond Deputy Commissioner

Location: Gladstone, Queensland
One of the US forums was talking about them moving to mexico in the near future to protect the bottom line(not the worker).



     RAYMOND
 
arctic Assistant Commissioner

Location: Zurich
BDA. From your rantings I am beginning to wonder if you have the mental stability to remain a train driver.
- UP9372


Really ? Since when did a persons political views affect their ability to do their job ? I can also question the stability of someone that goes by the name of a locomotive used on the other side of the world .
I don't think politics as I go about my work but it does get mentioned - only a lot . You'd have get a bulk booking at a shrinks establishment because it seems that 75 to 80% of us think similar things yet the wheels keep turning .     
- BDA


Well, for me its just that it reads not like a political view but more like the preamble to the Unabomber manifesto. It just seems mixed up and internally contradictory. I've read it five times today, drunk and sober and still don't get it. Might be just me though.

cheers
 
arctic Assistant Commissioner

Location: Zurich
One of the US forums was talking about them moving to mexico in the near future to protect the bottom line(not the worker).



     RAYMOND
- raymond


Which one? Was there a reference that's reliable? Frankly it's easy to jump to that conclusion, write it on a website and have repeated and beleived because it sounds right. Maybe it is but I cant find reliable reference. The one I did read on Trainorders.net was pure speculation at the keyboard.


Not all workshops in the third world are "unsafe". If its run by a company based in the first world it is much more likely to have a decent safety culture. I've seen and experienced this, first hand.

cheers
 
Big J Chief Train Controller

Location: In Paradise
Thanks Julie , thanks Wayn , thanks Ross , thanks Bob . Thanks for a lot of hardship and grief . Worse than thanks for nothing  ...
- BDA


Yep John Howard, Peter Costello and the LNP were really strong advocates for protectionism...Not

Yep it is not the LNP that is currently debating the removal of subsidies for the domedtic car manufacturing industry.

So if you believe that globalisation is socialism then the libs must those commie bastards that are under our beds that Menzies warned us about. 


Despite this I agree with you that full free trade is dangerous as it means whoever is trading you are chosing to go with the country with the lowest standard be it wages, environmental control, safety and welfare  mMaybe instead of blaming the pollies maybe you should shift it to extreme economists and socialologists that believe in uptopia.  


 
 
BDA Chief Commissioner

Location: Sydney
I am quite well aware of Agenda 21 and "sustainability" . And a small number of very wealthy families who wish to create their own "utopia" .
 
Draffa Chief Commissioner


Never let it be said that BDA misses any percieved opportunity to have a go at anyone politically to the left of Tony Abbott.

It's a strange world when Globalisation is a left-wing Socialist commo plot, and Protectionism is right-wing policy. Laughing
 
SPSD40T2 Chief Commissioner

Location: Platform 9-3/4 and still waiting !!
Way back in 1992 the US dollar was almighty... The Yanks had pesos to the south and to the north. There was a great saving to  be had builkding in Canada.  Now the Canucks have all but parity and the USD isnt what it used to be. It makes sense to bring production back, especially to a less combatant locale. EMD is likely to sub out  much of its 2nd tier production to best tenders from within a short list of approved sites/contractors...and why wouldnt you..Its called business.

Muncie will be the mainstay...all other locales picking up slack etc as required..London was always closinig..just a matter of how and when.
 
jmt Assistant Commissioner

Way back in 1992 the US dollar was almighty... The Yanks had pesos to the south and to the north. There was a great saving to be had builkding in Canada. Now the Canucks have all but parity and the USD isnt what it used to be. It makes sense to bring production back, especially to a less combatant locale. EMD is likely to sub out much of its 2nd tier production to best tenders from within a short list of approved sites/contractors...and why wouldnt you..Its called business. Muncie will be the mainstay...all other locales picking up slack etc as required..London was always closinig..just a matter of how and when.
- SPSD40T2


Now that they have quit the London, will Le Grange be next, with prime mover and alternator/traction motor build transferred to other Cat plants?

 Caterpillar needs to be highly profitable. Recent expansion and acquisitions have been with borrowed capital. Cat's total debt-to-equity ratio is 258%. It needs to continuously boost margins and ensure cash flow is strong enough to cover interest and debt re-payments. 25% of Cat's sales are into Europe, and this market is rapidly flattening.

At the point where Cat stops expanding, it is dead in the water, and will be overtaken by competitors like Joy or Komatsu, and will then become a takeover target itself.

 
UP9372 Assistant Commissioner

Location: Banned
I am quite well aware of Agenda 21 and "sustainability" . And a small number of very wealthy families who wish to create their own "utopia" .
- BDA


You believe that stuff and you really need an aluminium hat. There is a world of difference between holding political views that may not be to my liking and just being barking raving mad. There is no political legitimacy in your diatribes. If you claim all our manufacturing is going offshore, how come there are any number of savvy Australian companies who are manufacturing high quality products and selling them overseas, despite our high dollar. Sure, old smoke stack industries are disappearing, but so what, workers need to become better educated so they can find employment in the high tech end of the market.

There was plenty of work for peasants in the middle age, but they soon became surplus to requirements with the coming of the industrial revolution. Sure, I feel really bad when I see people losing their jobs, however, I spent 6 years going to uni part time so I could stay competitive in the market place. And you know what, a degree is no longer adequate, post grad quals are now required. So people ought to wake up that their children are not going to find jobs in the primary industries any more doing really miserable work the same as the old man did. Invest in their future by seeing they are educated as much as they are capable of.  
 
BDA Chief Commissioner

Location: Sydney
This is going around in circles C40-8 , surely you remember last time me quoting that my ole man was livid because educated idiots from universities with years studying chemistry couldn't load a slide and mount them in basic microscopes . That is the trouble with extra years of classroom schooling - it doesn't teach practical experience and a lot of people see it as long term syllabus parroting .
Its quite remarkable actually seeing people who don't get their hands dirty looking down on those that do , remarkable because the clean palms are often useless at doing anything practical . They can't make anything or fix anything when it stops so end up helpless without those with real skills .
So C40 what to do when everyone that makes and fixes things ages retires and dies , psst the skill sets die with them .
Bit of a problem when others over the oceans hold the country full of paper waving but practically useless geniuses to randsome because - you guessed it - they can .
People like you want to hope this country never has to fight a war and defend itself because in a generation there won't be anyone that can make the resources to defend themselves with . No steel making or copper or rubber and none sailing in over those same seas . No food because the crops orchards and livestock became imported staples . Country starves before becomming a huge slave laboUr camp digging raw materials out of the ground to feed the victors .

You may think its crazy but ask youself if it's truly impossible , it isn't is it ?
 
Big J Chief Train Controller

Location: In Paradise

You may think its crazy but ask youself if it's truly impossible , it isn't is it ?
- BDA


Possible - yes. Probable - no.

Since WW2 it was possible that USofA and CCCP would have a go at each other wipe mankind from this planet. Hasn't happen thou.

That does not mean that it won't happen in the future, however you cannot ignore people are no matter how tyrannical they are, usually want to live.

I don't understand people that worry and then espouse the world is nigh and the take over by commie bastards (or substitute the 7 bankers, depending on the political leaning). Life is too short, enjoy it.

Despite the problems of the world, as a generalisation we have come a long way in the last 500 years. Serfdom is gone and the majority of the world do have freedom to say what they personally believe (The minority is still significant).

Going back to the orginal posting, it is a sad day that Canada has lost this capacity. The reality is that they need to be competitive and the corproate world is ruthless. However this was going to change the day that GM divested itself of EMD at the time.

EMC (whatever the moniker) have lost significant market share and have not reigned in their costs. Something has to give.

I do feel empathy for these workers and the impacts. As a child of a mechanic that was retrenched without notice in the 80s, I know the hardship that they will face. All they can do is reskill and follow the work.

All you can hope is that Cat/EMD/PR do get their act together and become more competitive. Just hope that the pain stops now.

 
dougg Beginner

BDA. From your rantings I am beginning to wonder if you have the mental stability to remain a train driver.
- UP9372


Really ? Since when did a persons political views affect their ability to do their job ? I can also question the stability of someone that goes by the name of a locomotive used on the other side of the world .
I don't think politics as I go about my work but it does get mentioned - only a lot . You'd have get a bulk booking at a shrinks establishment because it seems that 75 to 80% of us think similar things yet the wheels keep turning .     
- BDA


To summarize the excellent CBC article linked at the top of this thread: Caterpillar offered their workers in London, Ontario a 50% pay cut. Welders and electricians were going from roughly $34 to $17 per hour. Unsurprisingly the workers baulked at this generous offer and were locked out from 1 January. Meanwhile, last week,  Caterpillar got the Indiana state lawmakers to pass "right-to-work" legislation that effectively bans mandatory union membership. The reward for Indiana was to transfer the work formerly done in London, Ontario to Muncie, Indiana. I wonder what Caterpillar will be paying their welders and electricians in Muncie?

So BDA, how would you react if your employer did that to you?
 

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