The other day, the $60 billion heavy equipment manufacturer Caterpillar announced that it would be shutting a locomotive plant in London, Ont and moving production to a plant in Muncie, Indiana. The 450 workers in London belong to the Canadian Auto Workers Union, and they had been locked out since January 1 after they balked at taking a substantial pay cut that would have reduced hourly wages from the $34 an hour range to $16 an hour. Here’s a link to a report in The Star.
A few things of note: in 2008 the London plant received a $5 million tax break from the federal government to help it upgrade equipment and remain competitive in the global economy. Four months after Caterpillar purchased the plant in June 2010 it purchased an abandoned manufacturing facility in Muncie. According to this Globe & Mail report, the move to shift production to Muncie was made just 36 hours after Indiana’s governor signed into law “right to work” legislation that will make it hard for any prospective union to organize a workplace in the state which has been hit hard by the ongoing U.S. recession. Workers in Muncie will receive wages in the $12-$14.50 an hour range. Finally, once the London plant is closed, Caterpillar will be free transfer all its equipment and intellectual property (which was paritally paid for by Canadian taxpayers) to Muncie.
So all in all, not a bad bit of corporate bull-dozing. In response to the London closure, Mark’s Work Wearhouse has apparently said it will be pulling Caterpillar’s line of workboots from
it’s its London-area stores.